RNS Number:9231M
Excel Airways Group PLC
30 June 2003


For Immediate Release                                               30 June 2003



                        EXCEL AIRWAYS GROUP PLC ("EAG")

             INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2003

EAG, the AIM listed UK charter airline servicing independent tour operators,
announces interim results for the six months ended 30 April 2003.



Key Points

*         Turnover increased 56% to #39.8 million (2002: #25.5 million), which
includes revenue from Freedom Flights and excelairways.com;



*         Loss after tax increased to #6.5 million (2002: #3.8 million) due
mainly to the investment in promoting summer business and the inclusion of
Freedom Flights and excelairways.com administrative costs;



*         Performance is ahead of management expectations due to leasing out an
additional aircraft to an overseas airline during the loss making winter months
and by increasing ad-hoc sales;



*         Adjusted loss per share increased to 6.81p (2002: 3.93p).



*         Excel Airways summer capacity of 11 aircraft reduced to 5 in the
winter, matching winter capacity to market demand;



*         Excel Aviation increased sales from ad-hoc events such as European
football competitions and Gulf activity;



*         Freedom Flights sold 33% more seats during Winter 2002/03 than
previous corresponding period;



*         Initial response to excelairways.com promotion encouraging with up to
250 seats a day sold online;



*         Excel Airways was the most punctual charter airline for the fourth
season running at main base, Gatwick Airport.



Commenting on current trading and prospects, Eamonn Mullaney, Chairman said:



"Our tour operator customers are now reporting increased activity following the
end of the Iraq war. Assuming this level of activity continues and they maintain
their current programmes, we expect to deliver a level of profit in line with
market expectations."



For further information, please contact:

Richard Darby/James Strong
Buchanan Communications                         020 7466 5000




                              Chairman's Statement



Introduction



The charter airline business is seasonal, with losses traditionally being made
in the winter months when lower demand for holidays results in lower yields and
utilisation.  Excel Airways' performance over the first half of 2003 reflects
this pattern, but the effects of seasonality have been lessened by our strategy
of reducing winter capacity to match market demand by leasing out aircraft to
overseas airlines.



Results



The Group exceeded management's expectations for the Winter 2002/3 period by
leasing out an additional aircraft to an overseas airline and by increasing ad
hoc sales.



The seat only specialist operator Freedom Flights became a Group subsidiary on
12 July 2002.  During the winter months an advertising and promotional campaign
was undertaken, which was primarily aimed at driving the sale of summer
capacity, through both Freedom Flights and the excelairways.com direct sales
web-site.



The inclusion of the Freedom Flights and excelairways.com revenue during the
winter, contributed to the growth in turnover from #25.5 million to #39.8
million, which reduced the gross loss as a percentage of turnover from 16% in
the same period last year to 11%.



The after tax winter loss increased by #2.7 million to #6.5 million due mainly
to the investment  in promoting summer business and the inclusion of the Freedom
Flights and excelairways.com administrative costs.



Excel Airways



In seeking to match winter capacity to market demand the airlines summer fleet
of 11 aircraft was reduced in the winter to 5.



The fleet for Summer 2003 will increase to 14 aircraft, with Excels' core fleet
of 7 Boeing 737-800 aircraft, augmented by aircraft leased for the summer from
other airlines but flown to Excel standards in Excel livery.



Excel Aviation



Winter broking activity involves the sales and management of summer contracts.
Considerable skill and attention was needed in meeting customers' requirements,
which fluctuated with events in the Gulf.



The Gulf activity and European football competitions brought increased ad hoc
sales during the winter and Excel Aviation have recently concluded a contract to
operate long haul charters to the Caribbean during winter 2003/2004.



Freedom Flights



Freedom Flights provides a seat only product predominantly on Excel Airways'
charter flights, which is sold via the UK travel agency network.  Although
market demand for package holidays was widely reported to be dramatically
affected by the uncertainty leading up to the invasion of Iraq, Freedom Flights
sold 33% more seats for the winter period than it did for the same period last
year.



Excelairways.com



Winter saw the start of our campaign to advertise online availability of Excel
Airways seats. Initial response to our promotion has been encouraging with up to
250 seats a day sold online.   Further investment will be made in promoting
online access via the web-site.



Customer Service



We believe that punctual departures, as well as making for an efficient
operation, play a major role in building a reputation for good customer service.
This has again led to us surpassing our punctuality targets. For the fourth
season running we were the most punctual charter airline at our main base
Gatwick.



Current Trading Prospects



Our tour operator customers are now reporting increased activity following the
end of the Iraq war.  Assuming this level of activity continues and they
maintain their current programmes, we expect to deliver a level of profit in
line with management expectations.





Eamonn Mullaney
Chairman



30 June 2003




Unaudited consolidated profit and loss account for the six months ended 30 April 2003
ADVANCE /Y 97.20
                                                                                 Six        Six
                                                                              months     months          Year
                                                                    Note       ended      ended         ended
                                                                            30 April   30 April    31 October
                                                                                2003       2002          2002
                                                                               #'000      #'000         #'000

Turnover                                                                      39,795     25,512       182,338

Cost of sales                                                               (44,132)   (29,486)     (161,643)

Gross (loss)/ profit                                                         (4,337)    (3,974)        20,695

Distribution costs                                                           (1,981)          -       (1,132)
Administrative expenses                                                      (3,114)    (2,052)      (16,398)

Operating (loss)/profit before goodwill
amortisation and exceptional items                                           (9,423)    (6,026)        11,704

Exceptional administrative expenses                                  2             -          -       (8,511)
Goodwill amortisation                                                            (9)          -          (28)

Group operating (loss)/profit                                                (9,432)    (6,026)         3,165

Share of operating loss in associated undertaking                                  -       (56)         (138)

(Loss)/profit on ordinary activities before interest
and other income                                                             (9,432)    (6,082)         3,027

Interest receivable and similar income                                           165        144           447
Interest payable and similar charges                                            (34)       (45)          (95)

(Loss)/profit on ordinary activities before taxation                         (9,301)    (5,983)         3,379

Taxation credit/(charge) on (loss)/profit on ordinary activities     3         2,759      2,214         (796)

(Loss)/profit on ordinary activities after taxation                          (6,542)    (3,769)         2,583

Dividends                                                            4             -          -       (6,000)

Retained loss for the financial period                                       (6,542)    (3,769)       (3,417)

(Loss)/earnings per share        - basic                             5       (6.81p)    (3.93p)        2.69p
                                                                             
                                 - diluted                           5       (6.81p)    (3.93p)       2.69p
                                                                             


(Loss)/earnings per share before goodwill amortisation and
exceptional items
                                 - basic                             5       (6.80p)    (3.93p)         9.28p
                                 - diluted                           5       (6.80p)    (3.93p)         9.28p





All recognised gains and losses are included in the profit and loss account.





Unaudited consolidated balance sheet at 30 April 2003


                                                                         As at              As at         As at
                                                                      30 April           30 April    31 October
                                                                          2003               2002          2002
                                                                         #'000              #'000         #'000
Fixed assets
Intangible assets                                                          428                  -           437
Tangible assets                                                          3,794              3,331         3,604
Investment in associated undertaking                                         -                251             -


                                                                         4,222              3,582         4,041
Current assets
Stocks                                                                     150                150           150
Debtors    - due within one year                                        14,696             12,694        13,971
           - due after more than one year                                3,712              3,551         3,918
                                                                        18,408             16,245        17,889
Cash at bank and in hand                                                12,352              6,779        20,420


                                                                        30,910             23,174        38,459
Creditors: amounts falling due
within one year                                                       (34,152)           (19,991)      (35,318)


Net current (liabilities)/assets                                       (3,242)              3,183         3,141


Total assets less current liabilities                                      980              6,765         7,182

Creditors: amounts falling due
after more than one year                                               (1,207)            (1,268)       (1,238)

Provisions for liabilities and charges                                   (510)              (129)         (139)

                                                                       (1,717)            (1,397)       (1,377)


Net (liabilities)/assets                                                 (737)              5,368         5,805


Capital and reserves
Called up share capital                                                  4,800              4,800         4,800
Merger reserve                                                           1,275              1,275         1,275
Profit and loss account                                                (6,812)              (707)         (270)


Shareholders' (deficit)/funds - equity                                   (737)              5,368         5,805




Unaudited consolidated cash flow statement for the six months ended 30 April 2003



                                                            Note    Six months        Six months            Year
                                                                         ended             ended           ended
                                                                      30 April          30 April      31 October
                                                                          2003              2002            2002
                                                                         #'000             #'000           #'000

Net cash (outflow)/inflow from operating activities          6         (7,750)           (5,549)          13,578

Returns on investments and servicing of finance                            131                99             352

Taxation recovered/(paid)                                                  132             (197)         (1,195)

Capital expenditure                                                      (430)           (2,018)         (2,465)

Acquisitions and disposals                                                   -               (1)           1,613

Equity dividends paid                                                        -                 -         (6,000)

Net cash (outflow)/inflow before use of liquid resources
and financing                                                          (7,917)           (7,666)           5,883

Management of liquid resources                                           7,984            10,335         (2,004)

Financing                                                                 (35)             1,310           1,292


Increase in cash in the period                                              32             3,979           5,171



Reconciliation of net cash flow to movement in net funds
                                                                    Six months      Six months              Year
                                                                         ended           ended             ended
                                                                      30 April        30 April        31 October
                                                                          2003            2002              2002
                                                                         #'000           #'000             #'000

Increase in cash in the period                                              32           3,979             5,171

Cash outflow/(inflow) from decrease/(increase) in
 net debt and lease financing                                               35         (1,310)           (1,292)

Cash (inflow)/outflow from (decrease)/increase
in liquid resources                                                    (7,984)        (10,335)             2,004


(Decrease)/increase in net funds resulting from cash flows             (7,917)         (7,666)             5,883


Movement in net funds in period                                        (7,917)         (7,666)             5,883
Net funds at beginning of period                                        18,955          13,072            13,072


Net funds at end of period                                   7          11,038           5,406            18,955





Notes forming part of the interim accounts for the six months ended 30 April
2003



1     Reporting on financial information



Excel Airways Group plc was incorporated on 16 August 2002 and, following a
group reorganisation effected on 11 November 2002, it acquired its interests in
Excel Airways Limited and Excel Aviation Limited (including its principal
subsidiary undertakings, Freedom Flights Limited and Freedom Flights (Aviation)
Limited) in consideration for the issue of shares.



The financial information for the year ended 31 October 2002 is an extract from
the group's first consolidated accounts.  These group accounts, which did not
constitute statutory annual financial  statements, were prepared voluntarily
under the group reconstruction principles of FRS6 'Acquisitions and Mergers',
using the merger accounting method for the combination of the group.  The
accounts received an unqualified auditor's report.



The interim financial information has been prepared on the basis of the
accounting policies set out in the group accounts for the year ended 31 October
2002. The financial information for the periods ended 30 April 2003 and 2002 is
unaudited.



The interim financial information does not comprise statutory accounts as
defined in Section 240 of the Companies Act 1985.



Copies of this interim report are being posted to shareholders and are available
from the Company Secretary at Mitre Court, Fleming Way, Crawley, West Sussex,
RH10 9NJ.



2                    Exceptional administrative expenses


                                                                   Six months      Six months            Year
                                                                        ended           ended           ended
                                                                     30 April        30 April      31 October

                                                                         2003            2002            2002
                                                                        #'000           #'000           #'000

Contributions to employee benefit trust                                     -               -           7,404
Costs of reorganisation and introduction to AIM                             -               -           1,107
                                                                            -               -           8,511



Contributions to employee benefit trust



The contributions to the employee benefit trust in the year ended 31 October
2002 represented the provision for payments in respect of that year, by Excel
Airways Limited, Excel Aviation Limited and Freedom Flights Limited to the Excel
Airways Group plc employee benefit trust.  On 11 November 2002, the employee
benefit trust used the contributions to acquire 7,312,446 ordinary shares in the
company from Libra Holidays Group Limited, the ultimate parent company, at
#1.0125 per share.



Subsequent to the above, and also on 11 November 2002, the 7,312,446 ordinary
shares in the company were allocated, by the trustees, to sub-trusts for the
benefit of specified key employees and directors of the group.



Costs of reorganisation and introduction to AIM



The reorganisation costs and introduction to AIM costs related to the fees and
expenses incurred in establishing the group structure, as detailed in note 1,
and in obtaining admission to trading on AIM from 20 November 2002 respectively.



3          Taxation on (loss)/profit from ordinary activities


                                                                       Six months    Six months          Year
                                                                            ended         ended         ended
                                                                         30 April      30 April    31 October
                                                                             2003          2002          2002
                                                                            #'000         #'000         #'000
Current tax

UK corporation tax on result for the period                                     -         (113)         (670)
Adjustments in respect of prior periods                                       (1)             -             -
Payments to be made for group relief received                                   -             -         (773)

                                                                              (1)         (113)       (1,443)

    Deferred tax

Origination and reversal of timing differences                              2,760         2,327          647


Taxation credit/(charge) on (loss)/profit on ordinary activities            2,759         2,214        (796)



4          Dividends


                                                                       Six months    Six months          Year
                                                                            ended         ended         ended
                                                                         30 April      30 April    31 October
                                                                             2003          2002          2002
                                                                            #'000         #'000         #'000

Special final dividends paid                                                    -             -         6,000



In the year ended 31 October 2002, special dividends amounting to #3,550,000 and
#2,450,000 were paid to shareholders by Excel Aviation Limited and Excel Airways
Limited respectively.  The total amount of #6,000,000 was ultimately received by
Libra Holidays Group Limited.  No interim dividend has been paid or proposed for
the period ended 30 April 2003.



5             (Loss)/earnings per share



The calculation of (loss)/earnings per share for the six months ended 30 April
2003 is based on the loss after taxation of #6,542,000 (30 April 2002 loss of:
#3,769,000; 31 October 2002 profit of: #2,583,000).  The calculation of basic
(loss)/earnings per share and diluted (loss)/earnings per share is based on a
weighted average number of shares in issue during the year.  The basic and
diluted loss per share figures for each period are the same, as the effect of
all potential ordinary shares to be issued is anti-dilutive.



The number of shares used in these calculations and the reconciliation of
denominators used for basic and diluted (loss)/earnings per share calculations
are set out in the table below:


                                                                         Dilutive
                                                                        effect of
                                                        Basic               share                 Diluted
                                                       number             options                  number

Period ended 30 April 2003                         96,000,000                   -              96,000,000

Period ended 30 April 2002                         96,000,000                   -              96,000,000

Year ended 31 October 2002                         96,000,000                   -              96,000,000



            Additional disclosure is provided below in respect of (loss)/
earnings per share, before amortisation of goodwill and exceptional items, as
the directors believe this gives a better view of ongoing comparable earnings.


                                                                     Six months    Six months          Year
                                                                          ended         ended         ended
                                                                       30 April      30 April    31 October
                                                                           2003          2002          2002
                                                                          pence         pence         pence

Basic (loss)/earnings per share                                          (6.81)        (3.93)          2.69
Effect of add back of:
Amortisation of goodwill                                                   0.01             -          0.03
Exceptional items (see note 2)                                                -             -          8.87
Taxation adjustment on allowable exceptional
 items at 30%                                                                 -             -        (2.31)

Adjusted (loss)/earnings per share before amortisation
of goodwill and exceptional items                                        (6.80)        (3.93)          9.28





6          Reconciliation of operating (loss)/profit to net cash (outflow)/
inflow from operating activities


                                                                 Six months      Six months            Year
                                                                      ended           ended           ended
                                                                   30 April        30 April      31 October
                                                                       2003            2002            2002
                                                                      #'000           #'000           #'000

Operating (loss)/profit                                             (9,432)         (6,026)           3,165
Amortisation of goodwill                                                  9               -              28
Depreciation                                                            240             224             410
Decrease/(increase) in debtors                                        2,029         (4,032)         (5,838)
(Decrease)/ increase in creditors                                   (1,046)           4,288          15,792
Increase in provisions                                                  450               -               -
(Profit)/loss on disposal of fixed assets                                 -             (3)              21


Net cash (outflow)/inflow from operating activities                 (7,750)         (5,549)          13,578




7          Analysis of net funds




                                                      At                                At

                                              1 November           Cash         Other non-       30 April

                                                    2002           flow       cash changes           2003
                                                   #'000          #'000              #'000          #'000

Short term bank deposits                          18,472        (7,984)                  -         10,488
Cash at bank and in hand                           1,948           (84)                  -          1,864
Overdrafts                                         (116)            116                  -              -
Net cash                                           1,832             32                  -          1,864
Liquid resources                                  18,472        (7,984)                  -         10,488

Debt due after one year                          (1,238)              -                 31        (1,207)
Debt due within one year                            (90)             31               (31)           (90)
Finance leases                                      (21)              4                  -           (17)
Financing                                        (1,349)             35                  -        (1,314)

Total                                             18,955        (7,917)                  -         11,038




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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