Group performance overview
| Underlying results1 | Statutory results | ||||
|---|---|---|---|---|---|
| £m | 2009 | 2008 | Change | 2009 | 2008 |
| Revenue | 13,863 | 13,932 | Flat | 13,863 | 13,932 |
| Operating profit/(loss) | 443 | 398 | +11% | 37 | (184) |
| Profit/(loss) before tax | 366 | 319 | +15% | (52) | (267) |
| Basic earnings/(loss) per share (p) | 23.8p | 20.4p | +17% | (1.0)p | (24.4)p |
| 1 Underlying operating profit and underlying profit before tax are from continuing operations and exclude separately disclosed items, amortisation of business combination intangibles, goodwill impairment and taxation of results of the Group’s joint ventures and associates. Underlying profit before tax also excludes separately disclosed financial expenses. Underlying earnings per share excludes the same items, net of related taxation. | |||||
Group revenue for 2009 was slightly lower than the prior year at £13,863m (2008: £13,932m). Capacity reductions reduced underlying revenue by 14%, partially offset by 4% higher selling prices, resulting in an organic revenue decline of 10%. Foreign currency translation increased revenue by 9% due to Sterling weakness and revenue from acquisitions resulted in a 1% increase over the prior year.
The Group achieved a £45m improvement in underlying operating profits to £443m in 2009 (2008: £398m). This improvement has primarily been achieved by the delivery of integration synergies and the recovery of scheduled flying losses in the UK and Germany. The improvement was partially offset by the adverse impact on our French business of weaker demand and socio-political events in the French West Indies and Madagascar, and weaker demand and excess market capacity in Canada.
The main drivers of the year-on-year improvement in underlying operating profit are:
| £m | |
|---|---|
| FY08 underlying operating profit | 398 |
| Incremental synergies | +85 |
| Scheduled flying | +19 |
| Impact of FY08 sale and leasebacks | -10 |
| France – Nouvelles Frontières/Corsair trading | -26 |
| Canada trading | -19 |
| Other trading | +1 |
| Swine flu | -10 |
| Acquisitions | +5 |
| FY09 underlying operating profit | 443 |
A reconciliation of underlying profit before tax to statutory loss before tax is as follows:
Year ended 30 September | 2009 £m | 2008 £m |
|---|---|---|
| Underlying profit before tax | 366 | 319 |
| Separately disclosed items – operating (Note 3) | (340) | (380) |
| Separately disclosed items – financial expenses (Note 4) | (12) | (4) |
| Impairment of goodwill | (7) | (112) |
| Amortisation of business combination intangibles | (56) | (87) |
| Taxation on profits of joint ventures and associates | (3) | (3) |
| Statutory loss before tax | (52) | (267) |
Separately disclosed items
Separately disclosed items within the operating result for the year were £340m (2008: £380m). The majority of these items were non-cash in nature, relating to accounting impairments and write offs. Out of the £340m total, £142m were cash items. Separately disclosed items in the year included:
- Costs of £143m incurred to achieve the synergy benefits;
- An impairment charge of £124m in respect of write downs of Boeing 747 aircraft operated by Corsair;
- Restructuring expenses of £40m, which relate primarily to the closure of the Sunsail Clubs in Turkey and ongoing restructuring in Nouvelles Frontières; and
- Costs of £32m relating to the transaction between TUIfly and Air Berlin.