All Leisure Group winter losses deepened by more than £2 million to £13.4 million in a “tough trading environment”.
However, the company said the loss to April 30 included £1.3 million of restructuring costs mainly related to the closure of an office in Burgess Hill and £2.4 million in seasonal tour operating losses at Page & Moy.
The group result improved on a like-to-like basis to a £9.7 million loss, reflecting a year-on-year improvement in its cruise division aided by a full season for Swan Hellenic ship Minerva sailing in the Far East following a 100-day upgrade in the same period a year earlier.
“This is further improved by net £1.1 million if the group’s results are assessed prior to the year-on-year impact of gains and losses on certain derivative contracts which would result in an £8.6 million loss,” the company said.
“The improvement in cruise performance is due in no small part to the success of the strategy to de-risk the business.” This involved a joint venture with Cruise & Maritime Voyages.
Looking forward, the company said: “Although the first half of 2013 has proved challenging due to a continued tough trading environment, the successful integration of the tour operating division (previously Page & Moy) and subsequent restructuring programme have placed the group in a stronger position to maximise the benefits of the increase in year-on-year bookings that we are seeing for 2014.”
All Leisure has sold 95.6% of forecast escorted tour revenue and 97.8% of forecast cruise revenue for 2013.
But it has been forced to cancel its Discover Egypt’s Nile cruise programme from the beginning of the month following Foreign & Commonwealth Office advice on travel to parts of Egypt.
The ship MV Voyager suffered major mechanical problems in May and June resulting in the curtailment of one cruise and cancellation of two others.
“There have been significant headwinds in cruise bookings together with the unrest in Egypt,” the company said.
Executive chairman Roger Allard (pictured) said: “It is regrettable that the recent mechanical problems with MV Voyager, tough trading conditions and unfavourable political events in Egypt will impact performance for the second half of 2013.
“However, despite this, I am extremely pleased to report that we are enjoying the benefits of introducing the tour operating division into the group, complementing our existing products and creating encouraging cross-selling opportunities.
“Furthermore, I am excited for the future of the group following the recent successful integration of Page & Moy and am confident of achieving in the region of £1.5m in full year overhead savings in 2014 following the closure of the Burgess Hill office and rationalisation of senior management within the group.
“We believe that we have laid solid foundations for future growth which can be enjoyed once the wider economic environment and trading conditions improve.”
He added: “Looking forwards there are some positive signs for future trading.
“Where previously the company had experienced later bookings, trading at this early stage of the financial year 2013/14 has started well across all brands, with the exception of Discover Egypt, which has limited forward capacity. Sales remain well ahead of last year.
“In summary, the UK cruise market continues to be challenging with the continuing themes of political unrest and economic uncertainty impacting trade.
“The unforeseen technical problems with MV Voyager presented another unwelcome obstacle to the full year’s cruise result.
“However, the group as a whole is now starting to see the benefits of the acquisition of Page & Moy with new cross-selling initiatives and significant synergy savings identified, especially since the closure of the Burgess Hill office.
“We expect these savings to continue into future years and provide the basis of a significant improvement in shareholder returns.”