Blue Bay Travel Group Limited - Limited company accounts 18.2

REGISTERED NUMBER: 10599515 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Period

3rd February 2017 to 31st December 2017

for

Blue Bay Travel Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Consolidated Statement of Comprehensive Income

11

Consolidated Statement of Financial Position

12

Company Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Statement of Cash Flows

16

Notes to the Consolidated Statement of Cash Flows

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

D W Andrews

L G Dean

A J Gardner

Mrs M Rowland

Mrs L A Walley

S D Wilson

REGISTERED OFFICE:

Unit A4 Bellringer Road

Trentham Business Quarter

Stoke on Trent

ST4 8GB

REGISTERED NUMBER:

10599515 (England and Wales)

AUDITORS:

Rice & Co Limited

Chartered Accountants

Statutory Auditors

14a Market Place

Uttoxeter

Staffordshire

ST14 8HP

The directors present their strategic report of the company and the group for the period 3rd February 2017 to

31st December 2017.

REVIEW OF BUSINESS

The group performed well in the year ended 31st December 2017 with Blue Bay Travel Limited achieving

growth in gross retail turnover of 8% to £30m. Operational profit before exceptional items was down 13%

due to an increase in costs. Following investment by LDC in February 2017, spend on team expansion and

office space was vital to lay solid foundations for new growth expectation.

The business undertakes its activities under the corporate name Blue Bay Travel, trading online as

Caribbeanwarehouse, Tropicalwarehouse and Xclusivity. Awareness of the Blue Bay Travel brand is

continually growing within the travel industry. During 2017 we were presented with TTG Travel Awards

Top Agent of the Year, TTG Homeworker of the Year, TTG Call Centre Agent of the Year and the GMT2

Awards Caribbean Agency of the Year. Business is conducted through the main call centre in Stoke on

Trent, online and via a team of 11 homeworkers based around the UK.

Following the launch of a new consumer website in December 2016, continuous improvements were made to

content and functionality throughout 2017. The creation of an online booking platform was identified as a

key opportunity to target the large volume of website browsers not interacting further with the company.

This launched mid-year and continuous developments were delivered by the in-house team during the second

half of the year, culminating in a robust booking system by year end.

Autumn ’17 saw the soft launch of a new luxury brand, Xclusivity, this gave the business it’s first platform

to promote short-haul holidays and new and more luxury product in core destinations.

Blue Bay avoids the overheads associated with operating high street retail stores but benefits from

interaction with customers online, via a database of regular and prospective customers and its very

successful social media channels. In 2017 Blue Bay surpassed Virgin Holidays in number of Facebook

followers and expertly manages its social media community.

Along with new office space and personnel, the business invested in new marketing intelligence technology

to create a much more targeted approach and improve conversion of marketing activity and ROI

Key performance indicators The group monitors and reports on several Key Performance Indicators.

Comparisons are made between years and against annual budgets to provide half year forecasts. Key

performance indicators form a significant part of monthly management reporting.

Financial Key Performance Indicators

Strong average selling prices contributed to the key objective of doubling turnover in three years. Gross

profit is a key measure of the business. This grew 8% year on year, incorporating changes in discounting and

product mix. Management monitor these and other indicators, such as business mix, discounting levels and

volumes by supplier. Other key performance indicators focus on the effectiveness of marketing spend, we

closely track specific marketing channels against sessions generated, quotes generated, and bookings made.

Our sales team are targeted on conversion of enquires to bookings and retained commission.

Non-Financial Key Performance Indicators

Customer satisfaction is a focus for the business, we have a high rate of repeat business and enjoy a Feefo

rating of 4.6/5 across all brands. Employee engagement and retention is an important, non-financial, focus

and we have invested in management and employee training during 2017 which has resulted in a number of

internal promotions.

PRINCIPAL RISKS AND UNCERTAINTIES

The group holds comprehensive insurance cover for risk areas identified as significant. Management seek

advice from external experts, where relevant, to reduce risks to an acceptable level.

The following are some of the key risks that the group faces:

Operational

As an online business, the group is reliant on Information Technology. Blue Bay has an in-house

Development team responsible for the maintenance, repair and enhancement of office systems and associated

reporting capabilities. There have been improvements to operational procedures and further efficiency of the

operational procedures will continue to be a key focus for the business in the coming years. There is a

disaster recovery plan in place, which includes the back-up of data offsite.

Competition

Competition in the travel agent market is intense, as it is across retail in general. The group competes against

other travel providers in the internet market place. However, the Directors believe that the growing strength

of the brand, highly competitive product offering, bespoke pricing technology and high level of in-house

expertise gives them a strong competitive advantage.

Environmental and other regulatory requirements

Existing and possible future legislation, regulations and actions may cause additional expenses to the group,

the extent of which cannot be predicted.

There are continued risks of terrorism, political unrest and natural disasters or adverse weather conditions;

however, the industry and Blue Bay have a good track record of responding to these events and the nature of

direct relationships means that alternative holidays and negotiation of costs can be sourced to reduce

exposure.

Financial risks Interest rate cash flow risk

The group has no interest-bearing assets.

The group has interest bearing liabilities. Interest bearing liabilities comprise its loan notes and banks loans.

Foreign exchange rate risk

The group contracts hotels directly in US Dollars, and is therefore subject to fluctuations in the dollar rate.

We manage this actively through forward USD purchases to mitigate for sudden FX fluctuations

Credit risk

The group’s credit risk is mainly attributable to receivables from customers not yet departed. Therefore,

credit risk is not concentrated.

Research and development

During the year the group continued to develop bespoke software solutions for use across the business.

ON BEHALF OF THE BOARD:

Mrs M Rowland - Director

2nd November 2018

The directors present their report with the financial statements of the company and the group for the period

3rd February 2017 to 31st December 2017.

INCORPORATION

The group was incorporated on 3rd February 2017 and commenced trading on the same date.

PRINCIPAL ACTIVITY

The principal activity of the group in the period under review was that of Travel Agents.

DIVIDENDS

No dividends will be distributed for the period ended 31st December 2017.

DIRECTORS

The directors who have held office during the period from 3rd February 2017 to the date of this report are as

follows:

D W Andrews - appointed 13th February 2017

L G Dean - appointed 13th February 2017

A J Gardner - appointed 13th February 2017

Mrs M Rowland - appointed 13th February 2017

Mrs L A Walley - appointed 13th February 2017

S D Wilson - appointed 3rd February 2017

All the directors who are eligible offer themselves for election at the forthcoming first Annual General

Meeting.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the

financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law

the directors have elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company

law the directors must not approve the financial statements unless they are satisfied that they give a true and

fair view of the state of affairs of the company and the group and of the profit or loss of the group for that

period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain

the company's and the group's transactions and disclose with reasonable accuracy at any time the financial

position of the company and the group and enable them to ensure that the financial statements comply with

the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group

and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps

that he or she ought to have taken as a director in order to make himself or herself aware of any relevant

audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Rice & Co Limited, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

S D Wilson - Director

2nd November 2018

Opinion

We have audited the financial statements of Blue Bay Travel Group Limited (the 'parent company') and its

subsidiaries (the 'group') for the period ended 31st December 2017 which comprise the Consolidated

Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of

Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity,

Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the

Financial Statements, including a summary of significant accounting policies. The financial reporting

framework that has been applied in their preparation is applicable law and United Kingdom Accounting

Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the

UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31st December 2017 and of the group's loss for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditors'

responsibilities for the audit of the financial statements section of our report. We are independent of the

group in accordance with the ethical requirements that are relevant to our audit of the financial statements in

the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in

accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us

to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in

the Group Strategic Report and the Report of the Directors, but does not include the financial statements and

our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form

of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based

on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment

obtained in the course of the audit, we have not identified material misstatements in the Group Strategic

Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and

fair view, and for such internal control as the directors determine necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent

company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless the directors either intend to liquidate the group or

the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes

our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these

financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms

part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's

members those matters we are required to state to them in a Report of the Auditors and for no other purpose.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the

company and the company's members as a body, for our audit work, for this report, or for the opinions we

have formed.

Steven Dale FCA (Senior Statutory Auditor)

for and on behalf of Rice & Co Limited

Chartered Accountants

Statutory Auditors

14a Market Place

Uttoxeter

Staffordshire

ST14 8HP

2nd November 2018

TURNOVER

3,487,047

Cost of sales

190,192

GROSS PROFIT

3,296,855

Administrative expenses

2,787,963

508,892

Other operating income

12,964

OPERATING PROFIT

4

521,856

Interest receivable and similar income

3,236

525,092

Interest payable and similar expenses

6

596,268

LOSS BEFORE TAXATION

(71,176

)

Tax on loss

7

93,160

LOSS FOR THE FINANCIAL PERIOD

(164,336

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(164,336

)

Loss attributable to:

Owners of the parent

(164,336

)

Total comprehensive income attributable to:

Owners of the parent

(164,336

)

FIXED ASSETS

Intangible assets

9

9,299,001

Tangible assets

10

63,673

Investments

11

-

9,362,674

CURRENT ASSETS

Debtors

12

215,868

Cash at bank and in hand

2,100,908

2,316,776

CREDITORS

Amounts falling due within one year

13

1,784,965

NET CURRENT ASSETS

531,811

TOTAL ASSETS LESS CURRENT LIABILITIES

9,894,485

CREDITORS

Amounts falling due after more than one year

14

(6,780,000

)

PROVISIONS FOR LIABILITIES

17

(6,322

)

NET ASSETS

3,108,163

CAPITAL AND RESERVES

Called up share capital

18

6,098

Share premium

19

3,266,401

Retained earnings

19

(164,336

)

SHAREHOLDERS' FUNDS

3,108,163

The financial statements were approved by the Board of Directors on 2nd November 2018 and were signed

on its behalf by:

S D Wilson - Director

FIXED ASSETS

Intangible assets

9

-

Tangible assets

10

-

Investments

11

10,519,438

10,519,438

CREDITORS

Amounts falling due within one year

13

1,069,207

NET CURRENT LIABILITIES

(1,069,207

)

TOTAL ASSETS LESS CURRENT LIABILITIES

9,450,231

CREDITORS

Amounts falling due after more than one year

14

6,780,000

NET ASSETS

2,670,231

CAPITAL AND RESERVES

Called up share capital

18

6,098

Share premium

19

3,266,401

Retained earnings

19

(602,268

)

SHAREHOLDERS' FUNDS

2,670,231

Company's loss for the financial year

(602,268

)

The financial statements were approved by the Board of Directors on 2nd November 2018 and were signed on its behalf by:

S D Wilson - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Changes in equity

Issue of share capital

6,098

-

3,266,401

3,272,499

Total comprehensive income

-

(164,336

)

-

(164,336

)

Balance at 31st December 2017

6,098

(164,336

)

3,266,401

3,108,163

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Changes in equity

Issue of share capital

6,098

-

3,266,401

3,272,499

Total comprehensive income

-

(602,268

)

-

(602,268

)

Balance at 31st December 2017

6,098

(602,268

)

3,266,401

2,670,231

Cash flows from operating activities

Cash generated from operations

1

1,878,856

Tax paid

(20,960

)

Net cash from operating activities

1,857,896

Cash flows from investing activities

Purchase of intangible fixed assets

(9,729,331

)

Purchase of tangible fixed assets

(83,513

)

Interest received

3,236

Net cash from investing activities

(9,809,608

)

Cash flows from financing activities

New loans in year

6,780,000

Amount introduced by directors

121

Share issue

3,272,499

Net cash from financing activities

10,052,620

Increase in cash and cash equivalents

2,100,908

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

2,100,908

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

£

Loss before taxation

(71,176

)

Depreciation charges

450,170

Finance costs

596,268

Finance income

(3,236

)

972,026

Increase in trade and other debtors

(215,868

)

Increase in trade and other creditors

1,122,698

Cash generated from operations

1,878,856

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in

respect of these Statement of Financial Position amounts:

Period ended 31st December 2017

31.12.17

3.2.17

£

£

Cash and cash equivalents

2,100,908

-

1.	STATUTORY INFORMATION

Blue Bay Travel Group Limited is a private company, limited by shares , registered in England and

Wales. The company's registered number and registered office address can be found on the General

Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of Blue Bay Travel Group

Limited and its subsidiary company Blue Bay Travel Limited.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding

discounts, rebates, value added tax and other sales taxes.

Turnover comprises the value of commissions (excluding VAT, similar taxes and trade discounts) on

holiday bookings made. Revenue is recognised when bookings are confirmed, the point at which the

company becomes entitled to commission payment.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2017, is being amortised evenly over its estimated useful life of twenty years.

Management have estimated that the goodwill recognised on the investment in the subsidiary will

generate economic benefits for a period of 20 years. No contradictory evidence has arisen to reduce

the period of amortisation.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are

measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on reducing balance

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated

Statement of Comprehensive Income, except to the extent that it relates to items recognised in other

comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been

enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods

different from those in which they are recognised in financial statements. Deferred tax is measured

using tax rates and laws that have been enacted or substantively enacted by the period end and that are

expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable

that they will be recovered against the reversal of deferred tax liabilities or other future taxable

profits.

Research and development

In the initial phase of an internal project it is not possible to demonstrate that the project will generate

future economic benefits and hence all expenditure on research and development shall be recognised

as an expense when it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at

the statement of financial position date. Transactions in foreign currencies are translated into sterling

at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account

in arriving at the operating result.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's

pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

1,313,745

Social security costs

111,673

Other pension costs

17,331

1,442,749

The average number of employees during the period was as follows:

Directors

6

Sales and administration

47

Research and development

5

58

£

Directors' remuneration

181,738

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

£

Depreciation - owned assets

19,840

Goodwill amortisation

430,330

Auditors' remuneration

13,250

Auditors' remuneration for non audit work

4,200

Foreign exchange differences

(12,964

)

Operating leases

29,385

5.	EXCEPTIONAL ITEMS

£

Exceptional items

(109,934

)

Included within administrative expenses for the period ended 31st December 2017 is £109,934

relating to company restructure costs.

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

£

Loan

596,268