All Leisure Group : Trading update

Trading Update

29 Nov 2011

As part of its financial year end update, the board of All Leisure group plc ("the Group") (AIM: ALLG), the destination-led niche cruise operator announces that, based on the latest management information, it expects adjusted underlying Group Profit Before Tax for the twelve month period ended 31 October 2011 of c.£2.6 million, in line with market expectations.  In addition, the Group will report receipts from a legal claim as outlined in our announcement of 17 October 2011 (less anticipated non-recoverable costs), a £600k provision for a potential bad debt, and £1.9 million positive year on year movement on currency derivatives.

Cruising

Trading for the year ended 31 October 2011 met our revised forecast with increased yields, partly offset by higher fuel prices than anticipated.  As outlined in our half year statement of 29 July 2011, against a backdrop of unprecedented natural disasters and geo-political events, challenging market conditions, reduced discretionary customer spending, persistent low interest rates, increased oil prices and a weak pound, exacerbated by increased Air Passenger Duty and inflation, Winter trading is extremely challenging.

Hebridean Princess has just finished a satisfactory Summer season and is going into its annual dry dock, recommencing operations in Spring next year.

For Winter 11/12, we have taken the opportunity to take Swan Hellenic's leased vessel, mv Minerva, out of service to carry out a major refit and substantial upgrade in Germany (where the vessel is en route to now).  This upgrade will include adding 32 balconies, enlarging some cabins, upgrading bathrooms, adding an observation lounge, substantial technical upgrade and the vessel will be out of service for over 3 months, recommencing operations in March next year.  The majority of this work is being paid for by the vessel's owner and will cost in the region of €14 million.  In return for these improvements, we have extended the lease for a further 8 years to November 2021 at the same lease rate.  We have also agreed to assist the owner's financing of these improvements by paying a further deposit of up to €2 million; the total deposit to be recovered towards the end of the lease period by way of non-payment of lease rentals.

These improvements should benefit our yield (bottom line) for the year ending 31 October 2013.

mv Discovery is operating in the Middle and Far East and Australia this Winter and we expect  revenues and occupancy to be lower than last year.

Alexander Von Humboldt, soon to be renamed Voyager and to come under the Voyages of Discovery brand from next Winter, will have further upgrades made to it.

Summer 2012 ocean cruising capacity has increased by some 15% and, at this point, sales are up with load factors and revenues slightly ahead of this time last year.

Tour Operating - Discover Egypt

Understandably, in view of the situation in MENA, sales are down to Egypt; prior to the end of January this year, sales to Egypt were strong.  We are operating a limited programme this Winter and are pleased that for our committed aviation load factors for Luxor, sales to the end of 30 April 2012 are over 80%.

As in the past, we have no financial commitment on the ground and have not contracted any aviation capacity for Summer 2012.

Bearing in mind all the upheavals in Egypt, we are satisfied with current trading and are doing considerably better than our competitors.

Costs

Foreign exchange and the price of fuel continue to be one of several headwinds we have to contend with.  Most of our currency for the financial year 11/12 has been hedged ahead of current spot levels and at or above budgeted levels.

Fuel has eased off slightly from its recent highs and we have covered approximately one-third of our fuel requirement for this year, similar to year ended 31 October 2011.

Outlook

As already stated, we are currently encountering many challenges as a result of geo-political events, difficult market conditions, inflation and the situation in the Eurozone.  Nevertheless, we continue to be focused on providing the best service possible to our customers and value to shareholders alike.

All Leisure group PLC

Roger Allard (Executive Chairman)                Tel: [phone] 

Neil Morris (Group Finance Director)            Tel: [phone]

Panmure Gordon (UK) Limited

Adam Pollock / Andrew Godber                     Tel: + 44 207 459 3600

Citigate Dewe Rogerson

Ginny Pulbrook                                                Tel: [phone]

Lindsay Noton                                                 Tel: [phone]