Activity Sector
Proportion of Group revenue
The Activity Sector has over 40 activity travel businesses that operate in the market segments of Marine, Adventure, Ski, Student and Sport. It is market leader in adventure travel, taking more customers to iconic adventure destinations than any other operator.
Its Sport businesses are leaders in supporter-led cricket and rugby tours in Australia and the UK. The Student businesses encompass everything from the traditional school trip to France, to young adults trekking in the Himalayas. The Moorings and Sunsail are the leading yacht brands in Europe and the US and this Sector also includes Crysal Ski, the world’s largest ski operator.
The Activity Sector delivered underlying operating profits of £59m in 2009 (2008: £50m), driven by acquisition profits of £3m and integration synergies growth of £7m, with underlying trading broadly in line with the prior year.
£m | Marine | Adventure | Ski, Student and Sport | Activity |
|---|---|---|---|---|
| 2008 | 19 | 14 | 17 | 50 |
| Acquisitions | – | 2 | 1 | 3 |
| Synergies | 1 | – | 6 | 7 |
| Trading | (1) | (3) | 3 | (1) |
| 2009 | 19 | 13 | 27 | 59 |
| Activity | 2009 | 2008 | Change % |
|---|---|---|---|
| Revenue (£m) | |||
| Marine | 131 | 142 | -8% |
| Adventure | 240 | 239 | – |
| Ski, Student and Sport | 445 | 399 | +12% |
| Total | 816 | 780 | +5% |
| Underlying operating profit (£m) | |||
| Marine | 19 | 19 | – |
| Adventure | 13 | 14 | -7% |
| Ski, Student and Sport | 27 | 17 | +59% |
| Total | 59 | 50 | +18% |
| Underlying operating margin (%) | |||
| Total | 7.2% | 6.4% | +80bps |
The Marine division reported underlying profits of £19m in 2009 (2008: £19m). Additional synergies of £1m were delivered in 2009 in line with the prior year, through cost savings achieved by merging back office operations across the Marine businesses. The business was able to mitigate the impact on profitability of weaker consumer demand by reducing capacity and implementing cost saving measures, and also benefited from some currency gains. The flagship yacht base in Tortola, in the British Virgin Islands, was officially opened in February 2009. The marina is home to 400 catamarans and mono-hulls and provides excellent recreation and leisure facilities for guests before and after their charter. During 2009, Le Boat also successfully launched its products through the TUI Deutschland retail network, which is now Le Boat’s largest distributor in that market.
The Adventure businesses reported underlying operating profits of £13m in 2009 (2008: £14m). Businesses acquired during the year, plus the annualisation of acquisitions made in the prior year, contributed £2m of profit in 2009. The acquisition of ATA in April 2009 enabled the Australian group of businesses to extract synergies from the integration of ATA with its existing operations. In July 2009, we acquired Zegrahm, which will operate closely with our Quark polar cruise business to expand distribution and undertake joint marketing initiatives. The North American and Scandinavian Adventure businesses, however, saw reduced customer demand in 2009 with revenue down 15% compared to the prior year.
The Ski, Student and Sport divisions increased underlying operating profits in 2009 by £10m to £27m (2008: £17m). The divisions delivered strong trading growth of £3m in 2009 versus prior year, driven by the Lions Tour in June 2009 and growth in the Student businesses. Businesses acquired during the year, plus the annualisation of acquisitions made in the prior year, contributed £1m of profit in 2009, with the Sports division strengthening its position through the acquisition of Williment, the leading sports business in New Zealand, and the Student division entering the substantial and rapidly expanding language school market with the acquisition of EAC. The Ski division delivered additional integration synergies of £6m in 2009 over the prior year, through the integration of the former TUI and First Choice ski and club businesses.
