The acquisitions of Classic Travel Limited, trading as Classic4Travel, along with the Golf Concierge brand, have come to complete the acquisition portfolio of the Minoan Group.
Acquisition summary
- Acquisition of Classic Travel Limited, trading as Classic4Travel, the specialist travel agent with all the consideration dependent on the next two years’ results
- Acquisition of Golf Concierge brand, generating revenue from sale of specialist world-class golfing breaks Group operational highlights for 52 weeks trading to 31 October 2012
- Successful year in the travel business and major progress with project in Crete
- Travel companies exceeded last year’s comparable profits
- Operational performance of travel companies in line with management expectations Trading since financial year-end and share issue
- Travel profitability should be enhanced by the recently announced agreement with the National Federation of Sub Postmasters
- First 50 travel kiosks expected to be installed in Sub Post Offices in December
- Fast Track status for the Project has generated considerable additional interest, and discussions progressing with potential partners, investors and hotel operators
- Issue of 4,909,230 new shares at 10 pence per share, a premium to the share price at the close of trading on 20 November, to satisfy certain liabilities
Christopher Egleton, chairman of Minoan, said: “The Group has had a successful year in the travel business and has also made major progress with its project in Crete (“the Project”). Group trading for the financial year just ended was in line with management expectations. The travel division achieved profits during the period in excess of those achieved during the
comparable prior year and the new financial year has started well, positioning us for further growth. We look forward to making continued progress across the Group while we examine
further acquisition opportunities.”
Acquisitions
Minoan Group Plc., the AIM listed travel and leisure company, is pleased to announce that, subject to regulatory approvals, it has acquired the business of Classic Travel Limited, trading as Classic4Travel (“Classic”), an award-winning specialist travel agent with over 30 years’ experience in the travel and holiday market. It is expected that Classic’s integration into the Group will allow operational synergies to be realised with resulting financial benefits.
Established in 1982, Classic is currently operating profitably with gross revenues of £2.7 million.
Consideration payable, up to a maximum of £600,000, will be dependent on meeting targets over the next two years of trading. Classic serves both the leisure and business markets and is part of the UK’s largest consortium of travel agents giving it enhanced buying power to provide specially negotiated rates with airlines and hotels on travel deals and holidays. The company has arranged travel packages for a wide variety of organisations including multi-nationals such as Shell, O2, Finsbury plc and the Wolseley Group.
Based in Scotland, Classic has two offices, in Uddingston and Helensburgh, both commuter towns serving Glasgow, as well as a growing network of home based travel professionals affiliated with the business operating from London, Leeds, Lisburn, Edinburgh, Belfast and Falkirk. Classic4Travel also incorporates Lotus Travel, the same-sex travel agency brand specialising in holidays to exclusive specialist resorts, which has been highly successful in capturing and developing this specialist and growing market. Classic will be integrated into Minoan’s rapidly-growing travel portfolio, which includes King World Travel, John Semple Travel, which has over 26 years of experience in the travel market and Stewart Travel, which this year celebrated 40 years in the travel business.
In addition, Minoan has acquired the Golf Concierge brand, which sits well with the Group’s expanding golf offering. Golf Concierge, generates revenue from the sale of specialist world-class golfing breaks to both UK inbound and outbound tourists, offering more than 50 courses and associated resorts across 17 countries.
The Board of Directors (“the Board”) has continued to apply a rigorous approach to potential acquisitions. Although there are numerous further opportunities available, in current conditions only a limited number meet all of the Board’s requisite criteria.
Trading
The past financial year ended 31 October 2012 has been pivotal for the Group, with significant progress achieved on the Project in Crete while the travel division has grown following a series of successful bolt-on acquisitions of key travel brands in specialist markets. That progress has continued into the new financial year with today’s announcement of the acquisition of Classic4Travel.
The Group’s travel companies have exceeded last year’s comparable profits in the year ended 31 October. The current financial year has started well and profitability should be enhanced by the recently announced agreement with the National Federation of Sub Postmasters to provide travel kiosks in sub post offices plus the latest acquisitions. It is expected that the first 50 travel kiosks will be installed in December, on time and on budget, ready for the traditional January booking season.
Minoan has been developing its travel and leisure buy and build strategy both through acquisitions and organic growth over the past eighteen months with the aim of building a leading UK travel business. The Board view the Classic4Travel and Golf Concierge acquisitions as complementary to the Group’s existing specialist travel business, and expect them to contribute to profitability in the forthcoming financial year. In the meantime, the Civil Aviation Authority’s new ATOL regulations (Flight Plus) have been applied this year and have put significant pressure on the whole industry’s finances. In keeping with these changes Minoan intends to take further steps to protect customers by using a Trust Account for eligible bookings, without incurring extra costs.
Since its granting of Fast Track status to the Project, this year’s newly elected Greek Government has introduced a number of laws further simplifying the planning process. The granting of Fast Track status has generated considerable additional and encouraging interest in the Project and discussions are progressing with potential partners, investors and hotel operators about their participation in the Project.
Notwithstanding the constraints within the current wider political and economic crisis that dominate the Greek Government’s current agenda, we continue to progress the Project through Fast Track and the normal process involved with environmental consent. We expect overall resolution in the near future.
Share Issue
The Board’s confidence in opportunities for the Group has resulted in the decision to issue, subject to admission to AIM, 4,909,230 ordinary shares of 1p each at 10 pence per share, valued in total at £490,923 of equity and priced at a premium of 14.3% to the Minoan share price at close of trading on 20 November. This follows the Board’s decision to exercise its options to redeem various Group loans and to satisfy certain existing liabilities by the issue of shares.
Application has been made for the 4,909,230 new Ordinary Shares to be admitted to trading on AIM (“Admission”) and it is expected that Admission will be effective from 27 November 2012. Following Admission, there will be a total of 150,833,095 Ordinary Shares in issue. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Minoan under the FSA’s Disclosure and Transparency Rules.
Duncan Wilson, CEO of Minoan, said: “Adding an award-winning business such as Classic to our rapidly expanding travel portfolio significantly increases the range of travel services we offer, and enhances our presence in the business travel market, where Classic is particularly strong with its client list of multinational companies and organisations.
Our golf division, which is trading very well, will also reap additional benefits from the acquisition of the full service Golf Concierge brand. This is in line with our strategy of offering
attractive niche businesses as well as growing through larger acquisitions. Whilst we continue to pursue opportunities, we are delighted to be rolling out our first 50 travel kiosks across Sub Post Office stores.”
David Gillon, Managing Director of Classic4Travel, commented: “Classic Travel has had a very successful 30 years of trading and we are keener than ever to drive things forward and remain competitive in the demanding market place. The muchwelcomed backing of the Minoan Group will provide us with the tools and support required to take the retail arm, the home-working division and our same-sex travel operation to the next level. The team are very much looking forward to the many opportunities which lie ahead.”
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
