All Leisure expects modest rise in full year profit

Cruise operator All Leisure Group has cheered investors after telling them that it now expects to post a 'modest' increase in pre-tax profit for the year ended October 31st.

Cruise operator All Leisure Group has cheered investors after telling them that it now expects to post a 'modest' increase in pre-tax profit for the year ended October 31st.

The firm said that the purchase of PMTG during the period further enhancerd its portfolio by adding two new brands, namely Travelsphere and Just You. The acquisition has also enabled the enlarged group to strengthen the senior management team with the appointment of Ian Smith as Group Chief Executive Officer and Chris Gadsby as Group Finance Director.

In addition, the move have given the company scope to maximise synergies, something that continues to be a main focus, which the group said "should in part counteract the negative impacts from unprecedented natural disasters and geo-political events, double dip recession, reduced discretionary customer spending, persistent low interest rates, increased oil prices and weak sterling all of which are further exacerbated by increased Air Passenger Duty".

The company added: "Whilst the industry in general and our business in particular will continue to encounter many challenges over the next 12 months, we will be focusing on opportunities to integrate our tour operating and cruise businesses even more closely thereby partly mitigating the significant trading headwinds.

"The strategic importance of the acquisition of PMTG cannot be underestimated. Whilst restructuring costs will be incurred in the short term, the board is confident that the synergy benefits that it has identified will deliver a strong contribution to the bottom line in future years.

"Both the "Travelsphere" and "Just You" brands, based at our freehold property in Market Harborough, have performed exceptionally well since acquisition and have made a better than expected contribution to the bottom line. Discover Egypt continues to face challenging times but has contributed profit nonetheless."

Individual brandsThe Swan Hellenic brand saw the Minerva ship undergo a major refit and substantial upgrade over the winter period, which were in large part-funded by the ship's owner. The ship re-entered service on schedule on March 2nd and following completion of the summer season in Europe, is now cruising towards the Far East where it will spend the winter.

In the Voyages of Discovery brand successfully completed a "very challenging" summer trading season, but was forced to lay up the Alexander von Humboldt, which is currently going through a significant upgrade on the back of customer feedback. The ship enters into service next week, having been renamed Voyager, and will operate as the flagship for the Voyages of Discovery brand. Voyager's maiden cruise is scheduled to begin on December 4th to the Caribbean and circumnavigate South America for the winter, before returning to European waters in Spring 2013.

The Hebridean Island Cruises said its Hebridean Princess ship completed another "satisfactory" summer and does not suffer a lot of the negative headwinds that its industry has. The introduction of river cruises in Summer 2012 was extremely successful, the firm said, and plans to expand this over the next few years.

Currency & FuelThe group added: "Foreign exchange and the price of fuel continue to be two of the many headwinds that we have to contend with. The majority of our currency requirements for the financial year 2012/13 have been hedged at or above budgeted levels. In addition, in line with the year ended October 31st 2012, approximately 30% of our fuel requirements have been hedged for the new financial year."

The share price rose 7.53% to 25p by 14:40.

NR

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