JNY.L Regulatory News (JNY)

29 Jun 2005 07:00

Watermark Group PLC29 June 2005 Embargoed until: 07.00, Wednesday 29 June 2005 Watermark Group plc ("Watermark", "the Group", or "the Company") AGM Statement At the Annual General Meeting of Watermark Group plc, the leading provider ofinflight products and cabin management services to the airline and travelindustry - to be held at 13.00 hrs today, Wednesday 29 June, the ChiefExecutive, John Caulcutt, will comment: General Synopsis The first six months of the year have shown continued growth for our Company -not only in terms of sales, which are now at an all time high, but also in termsof gross margin. At the half way mark (June 2005) visibility in terms of sales revenues, is nowin excess of 90%, which gives us comfort for achieving brokers' forecasts forthe full year to 31 December 2005. Improvement in our Market Place Following a substantial traffic increase during 2004, international scheduledair traffic grew a further 8.7% in the comparable period January 2005 to April2005, with IATA (International Air Transport Association) predicting furthergrowth during the remaining part of the year. New Client Wins The number of airline and travel clients with whom the Group trades continues togrow. Services Division Air Fayre Air Fayre continues to make a substantial contribution to overall Group profits.The successful transition to our new 140,000 sq ft facility at Heathrow, and thestart of a 6 year contract with Air Canada last September, has given the companya firm platform for further expansion. bmi's recent announcement to retail food on many of its domestic and short haulflights is an important and exciting opportunity for Air Fayre. "Buy on board"food programmes are at an early stage of their market development, but this newopportunity with bmi allows us to further exploit and expand into other airlinecarriers here in the UK and thereafter globally. Air Fayre also has theopportunity to share in the retail sales from the bmi programme whilst theprofitability of its existing contract is not expected to be impacted in anyway. M'n'H Recycling M'n'H has won new contracts during the past few months, allowing it to achieverecord monthly turnover and profits during May 2005. Media on the Move Media on the Move has won a number of new accounts during the first half of2005, at the same time as expanding its penetration of the rail network andcruise line markets. The retail side of its business has shown particularlystrong growth, and new contract wins with Continental and Jet Airways areencouraging. It is also hoped to start accessing the hotel market during thesecond half of 2005. Products Division New contracts have been won in Asia, North America and Europe with extensionsbeing given to key contracts in the UK, Middle East, and Australia. Our investment in Northern China is continuing to allow us to source productsmore competitively and thus protect gross margins against a back drop of risingoil prices. The first of our new range of products, which allow our airline customers toturn historic areas of spend into revenue sales has been developed and is beinglaunched with Air Canada at the end of June; initial feedback is promising. Encompass We were delighted to hear that bmi now intend to move to an Encompass solutionon all of our existing contracts with them at London Heathrow. This will allowthem single point co-ordination, as well as an increased service offering, allsupported by a single invoice. Additionally our airline cleaning service partner OCS has moved into ourbuilding at Heston, allowing us to demonstrate in practice the processefficiencies and subsequent cost benefits of airline catering and cleaningworking together in harmony. There are also additional benefits for our Productsdivision from this new tenancy. Joint Ventures In discussions with Gate Gourmet Group - one of the world's largest airlinecatering companies - it has been agreed to work together on strategicopportunities. More announcements on these developments will be made during thesecond half of 2005. Reduction of Cost Base The restructuring costs within our Products division and head office, takenduring 2004 allowed us to enter 2005 with a reduced cost base in that part ofthe Group, when compared with 2004. We are currently on track to achieve thesebudgeted savings. New Revenue Streams As part of our passenger enhancement programme, the Company intends to enter thechauffeur drive market place, starting in September 2005. Additionally, and following our successful settlement with Aerobox, the Companyintends to re-enter the market place for lightweight aircraft containers, andhas received further orders for these. Conclusion As a result of the above we remain extremely positive about the long termopportunities to grow our business in an industry where passenger numberscontinue to grow, and where our vision for new products and services has beenwell received. Dividend The Company will be announcing its first interim dividend to share owners at thetime of reporting its interim results later this year. John Caulcutt Gemma Chandler / Claire MellyWatermark Group plc Tavistock CommunicationsTel: 01489 897800 Tel: 020 7920 3150e-mail: info@watermark.co.uk e-mail: gchandler@tavistock.co.uk This information is provided by RNS The company news service from the London Stock Exchange