2005
www.holidaybreak.co.uk
Hartford Manor, Greenbank Lane, Northwich, 
Cheshire, CW8 1HW  UK
Tel: +44 (0)1606 787000 
Fax: +44 (0)870 3667 631 
Email: group@holidaybreak.co.uk
European specialist  
holiday group
Annual Report and 
Financial Statements
Holidaybreak plc    Annual Report and Financial Statements 2005 Holidaybreak at a Glance
£303.0m
group turnover
(2004: £281.6m)
£79.8m
gross profit
(2004: £72.3m)
£35.8m
operating profit*
(2004: £31.4m)
Holidaybreak
Group
Holidaybreak is a European 
specialist holiday group with 
market leading positions 
in the UK and other 
major European markets. 
The business generates 
substantial cash, delivers 
industry-leading margins 
and has proven resilient in 
a rapidly changing market 
environment.
The Group has the financial strength 
to exploit changing market trends and 
will grow the portfolio of brands under 
the Holidaybreak umbrella organically, 
by investment in growing areas of the 
current business and by acquisition. 
Internet is at the core of the marketing strategy.  
The three operating divisions have different product 
and business models but share important strengths 
– market leadership, multi-channel distribution 
and high standards of product and service quality. 
Together they make a strong and well-balanced 
business.
 1 Holidaybreak at a Glance
 2 Chairman’s Statement
 4 Chief Executive’s Review
 8 Financial Review
10 Hotel Breaks Division
14 Adventure Travel Division
18 Camping Division
22 Directors and Advisors
24 Corporate Social Responsibility
26 Corporate Governance
30 Directors’ Report
31 Directors’ Remuneration Report
36 Independent Auditors’ Report
37 Consolidated Profit and Loss Account
39 Balance Sheets
40 Consolidated Cash Flow Statement
41 Statement of Accounting Policies
43 Notes to the Financial Statements
55 Shareholder Information
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www.holidaybreak.co.uk
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Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Holiday Information
Direct link to the Group’ s 
websites and online 
booking facility.
Media Centre  Holidaybreak plc
Annual Report and 
Financial Statements 2005
£ 26.7 m
turnover
(2004: £ 20.9m)
£3 .5m
gross profit
(2004: £25.4m)
£ 7 .7 m
operating profit*
(2004: £ 4.5m)
£62.6m
turnover
(2004: £37.4m)
£ 7 .2m
gross profit
(2004: £ 0.6m)
£5.  m
operating profit*
(2004: £3.2m)
£  3.7 m
turnover
(2004: £ 23.2m)
£3 .  m
gross profit
(2004: £36.3m)
£ 3.0m
operating profit*
(2004: £ 3.7m)
Adventure Travel  
Division
Camping  
Division
Hotel Breaks  
Division
The three businesses, Explore 
(UK), Djoser (the Netherlands) and 
RegalDive (UK) are market leaders 
in ‘soft adventure’ and scuba diving 
holidays. 
Explore provides small group escorted tours to 
approximately  30 countries worldwide. Djoser 
offers escorted tours in 85 countries and is one of  
the largest adventure holiday operators in 
mainland Europe. Bookings come direct, through 
specialist and overseas agents and increasingly 
via the internet. The cost base is flexible and cash 
generation and margins are attractive. 
The division provides self-catering 
holidays in mobile-homes and tents 
pre-sited on high quality European 
camp-sites. 
Customers, predominantly families, come from the 
UK, the Netherlands, Germany and seven other 
European countries. Sales are mainly direct, via 
the internet or through high street travel agents. 
Eurocamp and Keycamp are the market leading 
brands in the sector. Customer satisfaction and 
repeat booking levels are strong, with high margins 
and healthy returns on capital.
The division provides domestic and 
overseas short-break holidays primarily 
for UK and Dutch consumers. 
Superbreak provides leisure hotel stays for UK 
customers. Bookings come through UK high street 
travel agents, direct by phone and via the internet. 
Bookit is the market leading online intermediary for 
short-stay leisure hotel breaks in the Netherlands. 
The main brand, Weekendjeweg.nl, provides hotel 
accommodation for two night weekend stays 
primarily in the Netherlands, Belgium and Germany. 
Both businesses benefit from a very flexible cost 
structure, trade at consistent margins and have 
very strong cash flows.
* Before goodwill amortisation and impairment and exceptional operating costs. 2
Holidaybreak plc
Annual Report and 
Financial Statements 2005
2001 2002 2003 2004 2005
£192.5m
£218.7m
£259.5m
£281.6m
£303.0m
Turnover
Chairman’ s Statement
After a year of considerable 
change, Holidaybreak is now 
clearly positioned as a growing 
European specialist holiday group. 
In the year to 30 September 2005, 
we sold 3.0m holidays (2004: 
2.3m), increased headline profits* 
and generated £38.1m of free 
cash flow**. We also made two 
successful acquisitions in the 
Netherlands. 
I am delighted to report that this represents  
the Group’s best ever performance, in terms of 
headline profit before tax* and free cash flow**. 
Once again our employees have displayed 
commitment, enthusiasm and skill in all parts  
of the business. I thank them for all they have 
done in 2005.
We have the strength of management, 
commitment and financial resources to be  
even more successful in the years to come.  
The executive management is concentrating on 
margin performance, good return on investment 
and the generation of cash. The Board remains 
focused on the allocation of capital, the 
management of risk and the performance of  
the executive management in the interests  
of the Company and its shareholders. 
Group Results
For the year ended 30 September 2005, pre-tax 
profits (before goodwill amortisation and 
impairment) were £32.0m (2004: £28.0m) on 
turnover of £303.0m (2004: £28.6m). Headline 
earnings per share* were 48.8p (2004: 44.0p). 
Operating profit* was £35.8m (2004: £3.4m). 
On a like-for-like basis, excluding the impact  
of acquisitions, existing activities made an 
operating profit* of £3.6m. The new 
acquisitions, Bookit and Djoser, both 
announced in December 2004, contributed 
combined operating profits* of £4.2m. 
All Holidaybreak’s operations generated 
substantial cash. Operating cash inflow  
was £52.0m, (2004: £46.3m). Net debt at  
30 September 2005 was £22.9m  
(2004: £2.5m). The acquisitions of Bookit  
and Djoser, for a combined consideration  
of £39.6m, were financed from cash flow and 
new borrowings. Capital expenditure, net of 
disposals, was £2.4m (2004: £3.5m).
Dividend
The Board is recommending a final dividend of 
9.35p (2004: 7.6p), payable on 25 April 2006, 
to shareholders on the register on 3 March 
2006, making a total of 26.6p (2004: 24.2p)  
for the year.
The 0% increase in the annual dividend  
reflects the Board’s confidence in future 
prospects. The Group is financially strong and 
has a clear strategy to grow, both organically 
and by acquisition, adapting to and exploiting 
the rapidly changing market place. The Board 
intends to continue to pay ordinary dividends 
that are appropriate in light of the growth 
prospects and the underlying performance  
of the Group.
Acquisitions
Holidaybreak increased its presence in the 
growing leisure break and ‘soft adventure’ 
sectors and also in European travel markets 
with the acquisition in December 2004, of 
Bookit, an online intermediary for short-stay 
holidays in the Netherlands, and the acquisition 
in January 2005 of Djoser, the leading Dutch 
adventure holiday operator. The combined 
consideration for the two acquisitions  
was £39.6m.
Robert Ayling
Chairman 3
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
2001 2002 2003 2004 2005
18.0p
20.0p
22.0p
24.2p
26.6p
Dividends per ordinary share
2001 2002 2003 2004 2005
38.1p
42.5p
44.4p 44.0p
48.8p
Earnings per ordinary share*
2001 2002 2003 2004 2005
£23.8m
£27.1m
£27.9m £28.0m
£32.0m
Proﬁt before tax*
Djoser and Bookit enjoy high levels of consumer 
recognition in the Netherlands and are market 
leaders in their sectors. Both companies have 
experienced and committed management 
teams who are staying with the businesses. 
Integration of the newly acquired businesses 
has gone smoothly. They are both performing 
well and ahead of management expectations. 
Both were earnings enhancing* in the year. 
Management and Board Changes 
Carl Michel joined Holidaybreak as its new  
Chief Executive on 5 September. He succeeded 
Richard Atkinson, who retired after 30 years 
with the Group. Carl, 42, has extensive 
management experience in the international 
travel sector and has worked for a range of 
companies, including McKinsey, British Airways, 
Deutsche BA (where he was CEO) and Opodo.  
I am delighted that Carl joined Holidaybreak.  
He is a well-known senior executive in the travel 
industry, with outstanding strategic skills and 
strong European credentials. I believe that he 
has the capabilities to take Holidaybreak 
through its next phase of development.
At the same time, the departure of Richard 
Atkinson after 30 years with the business was  
a significant moment for us. Richard began in 
the business in 975, which was then providing 
holidays for less than 700 families. Holidaybreak 
now sells three million holidays annually. We 
have three profitable, cash generative divisions, 
attractive margin performance and good trading 
results. Richard can be justifiably proud of all 
this and he retired with our immense gratitude 
and good wishes.
James Greenbury, 44, joined the Group  
as a Non-executive Director with effect from  
 January 2005. With his strategic skills and  
his experience of the service sector, he has 
proved a valuable addition to the team as 
Holidaybreak seeks to grow by investment  
in its current businesses and by acquisition.
Clive McLintock retired as a Non-executive 
Director on 3 December 2004. Clive made a 
strong and valuable contribution during his time 
on the Board and I thank him for all he did for 
the Company.
Outlook 
Current trading is in line with our expectations. 
We are pleased with performance in the UK  
and the Netherlands although the London short-
breaks market remains subdued. The Group  
is confident of achieving another satisfactory 
performance. The Board believes that the 
financial and trading prospects of the Group  
for the current year are good. Once again, the 
Group expects to deliver industry-leading 
margins, generate strong cash returns and 
exploit market opportunities.
Robert Ayling
Chairman
* Before goodwill amortisation £3.9m (2004: £2.7m) and 
impairment £8.7m (2004: £5.3m) and exceptional costs 
in 2004 only (£2.6m).
** Free cash flow is operating cash flow after capital 
expenditure (£8.6m (2004: £.0m)) net of disposals 
(£6.2m (2004: £4.3m)) and after interest and tax 
payments (£.4m (2004: £.6m)).
 
* Before goodwill amortisation and impairment and exceptional operating costs. 4
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Key Messages
Businesses all enjoy good margins and 
strong cash generation
Group now growing in continental 
Europe 
Move to online continues
Focus on acquisitions that support 
growth and balance sheet efficiency
Holidaybreak’s results for 2005 
demonstrate both the flexibility and 
resilience of the Group in a rapidly 
changing market place. This is an 
encouraging performance in what 
has been an eventful year. I have 
been with Holidaybreak for three 
months now and I am pleased  
with what I have found. This is a 
great business with margins most 
other travel companies simply 
cannot match. The enthusiasm  
and dedication of the staff is 
impressive and my predecessor, 
Richard Atkinson, handed over a 
Group well placed to grow.
Hotel Breaks
Hotel Breaks is the largest division in the Group, 
selling 2.4m holidays in 2005 (2004: .7m).  
We provide domestic and overseas short-break 
holidays primarily for UK and Dutch consumers. 
Despite the London bombings in July, the 
division enjoyed a robust performance  
with operating profit* up 22% to £7.7m  
(2004: £4.5m). For the UK businesses, 
operating profit* increased by 3% to £4.9m 
(2004: £4.5m) on turnover that was flat at 
£20.9m. The results were dampened by the 
after effects of the London bombings in July.
Overall divisional operating margins* were up 
from 2.0% last year to 4.0% primarily as a 
result of the Bookit acquisition. Bookit records 
commissions receivable rather than total 
transaction value of sales. The division 
continues to be cash generative with limited 
capital expenditure and very high return on 
capital employed. In 2005, it generated £4.9m 
free cash flow** (2004: £6.9m).
The revenue mix of the UK business has shifted 
to reflect ongoing business development, with 
hotel breaks in Europe now at 3% of revenue, 
up from 7% in 2004. By contrast, the London 
hotel leisure market has been softer and is only 
slowly recovering on the back of destination 
marketing campaigns and a number of new 
theatre shows including Sinatra, Billy Elliot and 
Blue Man Group.
Bookit, the Dutch online hotel and self-catering 
reservations business, continues to make 
excellent progress. The business consists  
of three main brands. Weekendjeweg.nl,  
the core brand, offers hotel accommodation  
for two night weekend stays primarily in  
the Netherlands, Belgium and Germany. 
Nachtjeweg.nl provides overnight 
accommodation while Bungalows.nl, a 
successful initiative in only its second year, 
offers self-catering accommodation in holiday 
parks. This year, Bookit launched a new brand 
Hotelletje.nl offering small family-run hotels. 
Bookit is the third largest tour operator in the 
Netherlands by number of customers.
As expected, Hotel Breaks’ overall sales intake 
for 2005/06 is currently about 4% down on 
same period in 2004/05, mainly reflecting 
weakness in London since July. However,  
the extremely flexible cost base of the  
Hotel Breaks Division (room allocations are  
on a non-committed basis) means management 
is confident that it will deliver a satisfactory 
financial performance in the current year. 
Adventure Travel 
The Adventure Travel Division consists of three 
businesses: Explore, Djoser and RegalDive.  
We sold 60,300 adventure holidays in 2005 
(2004: 4,000). 
Chief Executive’ s Review
Carl Michel
Chief Executive 5
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Sales by market (2005)
UK 76%
Ireland 2%
Benelux 16%
Germany, Switzerland, Austria 4%
Other 2%
Sales by market (2004)
UK 82%
Ireland 3%
Benelux 8%
Germany, Switzerland, Austria 5%
Other 2%
The division has had another impressive year. 
Turnover was up 67% to £62.6m (2004: 
£37.4m) and operating profit* increased by 63% 
to £5.m (2004: £3.2m). The operating margin* 
was 8.2% (2004: 8.4%) and £2.7m of free 
cash flow** was generated (2004: £2.8m). 
The acquisition of Djoser, the Dutch market 
leader in adventure travel, increased the size of 
the Adventure Travel Division by approximately 
60%. Djoser provides escorted tours for Dutch 
and Belgian consumers to 85 countries and is 
the largest adventure holiday operator in 
mainland Europe.
Explore is the UK market leader in the ‘soft 
adventure’ sector. The Explore programmes, 
which are targeted at specific groups of 
consumers, have performed strongly during the 
year; most notably Explore Family Adventures 
grew by 00% and Explore Cycle by 70%. New 
tours and destinations have been added to 
expand our core product offering. We continue 
to benefit from the growing aspirations of 
travellers to be bolder and push their own limits.
RegalDive has maintained a solid trading 
performance and remained on budget, despite 
the bombing in Sharm El Sheikh in Egypt. The 
business is successfully expanding outside of 
Red Sea destinations.
Overall 2006 sales intake for the Adventure 
Travel Division is currently 9% higher than 2005. 
Camping 
The Camping Division sold 523,000 European 
camping and mobile-home holidays in 2005 
(2004: 570,000). Our main brands, Eurocamp 
and Keycamp, remain sector leaders and are 
sold in numerous European markets: the UK, 
Eire, the Netherlands, Belgium, Germany, 
Denmark, Switzerland, Austria and Poland.
Turnover in Camping was £3.7m (2004: 
£23.2m) and operating profit* declined by 
5.4% to £3.0m (2004: £3.7m). Operating 
profit* margin improved to .4% (2004: .%) 
and remains well ahead of industry average. 
The division generated £2.9m of free cash 
flow** (2004: £8.9m).
The trend towards later bookings by customers 
continues. The division remains a relatively high 
fixed cost business. It is concentrating on 
managing high season yields more successfully 
by holding prices and resisting discounting in 
pursuit of earlier bookings. Capacity cuts in 
areas of weaker demand have supported this 
revenue management strategy. Overall 
accommodation capacity (tents and mobile-
homes) in 2005 was reduced by 2% and in 
2005/06 we intend to reduce it by 6%. 
Our marketing is focused on widening the 
appeal as well as capitalising on the shift from 
ferries to low cost airlines. Whilst we are at a 
fairly early stage in the booking season, to date 
current 2006 sales intake for the Camping 
Division is 2% lower than 2005, reflecting the 
planned lower capacity on sale. We are making 
good progress in selling low-season holidays. 
Strategy
Our focus remains on our cash generative 
businesses, all of which are strongly placed in 
the markets they occupy. We command, by 
virtue of our market leadership and the strength 
of relationships with suppliers and customers 
alike, industry-leading operating margins* of 
over 0% at the Group level. 
We continue to increase our presence in the 
wider continental European market. During 
2005 we have successfully acquired and 
integrated two businesses, Bookit and Djoser,  
in the Netherlands. The impact of these is 
 
 
3.0m holidays sold
 
27 websites across all brands
 
24% of sales from non-UK 6
Holidaybreak plc
Annual Report and 
Financial Statements 2005
substantial; we anticipate that for the year 
ahead the share of revenues from the Benelux 
area will be approximately 30% on a total 
transaction value basis versus only 2%  
in 2004. The Camping Division’s share of 
annualised total transactions values has fallen 
from 44% last year to 34% this year. We are 
also becoming more of an online business. 
While we continue to base our sales on a  
multi-channel distribution approach to reflect  
the different ways in which consumers wish  
to access our products, I am particularly 
pleased that the internet is growing strongly  
in all divisions. 
Since taking on the role of Chief Executive in 
September, I have been enormously impressed 
by the determination, relationship-building and 
commercial acumen of our managers. Our 
financial strength gives us the opportunity to 
consider a range of options to strengthen our 
specialist portfolio. We need to consolidate our 
market leadership in ‘soft adventure’ tours and 
grow the sector. We will be investing more in 
our online capability in all divisions.
While we grow your company, we are also 
mindful of our balance sheet structure. We 
continue to review the investment needs of  
the Group, targeting an appropriate return on 
invested capital.
Going forward, I am keen to exploit more 
opportunities for sharing best practice  
across the Group and, where appropriate,  
to identify sensible acquisitions that add to our 
growth prospects, our online presence, our 
geographical spread and that have the potential 
to deliver good financial returns. All this will  
be done while maintaining our focus on our 
existing operations to continue their strong cash 
generation and industry-leading margins. 
Carl Michel
Chief Executive
* Before goodwill amortisation £3.9m (2004: £2.7m) and 
impairment £8.7m (2004: £5.3m) and exceptional costs 
in 2004 only (£2.6m).
** Free cash flow is operating cash flow after capital 
expenditure (£8.6m (2004: £.0m)) net of disposals 
(£6.2m (2004: £4.3m)) and after interest and tax 
payments (£.4m (2004: £.6m)).
Chief Executive’ s Review
Group Strategy
Operate a portfolio of cash generative 
specialist holiday businesses
Seek market leadership in all the sectors 
in which we operate
Maintain flexible cost structure and 
industry-leading margins
Deliver organic growth through effective 
execution of existing operations
Explore acquisitions across Europe, 
complementary to our existing 
businesses
Carl on Explore’s ‘Machu Picchu and Titicaca’ tour. 7
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Questions and Answers
Q. Is Holidaybreak 
planning more European 
acquisitions?
A. The Group is more international 
and we think that our European 
expansion will continue as we 
grow. We are now more visibly on 
the map, at least in North-West 
Europe, than ever before. We have 
three entries in the Dutch Tour 
Operator Top 50 (with Bookit, 
Djoser and Eurocamp) so that 
collectively we are now a major 
player in that market. But more 
importantly, we are market leaders 
in each of our sectors. If we can 
find similar profitable opportunities 
in other markets, then they will be 
carefully considered.
Q. How is the high street 
affecting Holidaybreak?
A. The issue for us is not so much 
the ebb and flow of high street 
sales, rather it is the changing way 
people are buying holidays. People 
are using travel agents less and 
the internet more. We have to 
respond. That is why, for example, 
the proportion of Hotel Breaks’ 
sales coming via the internet has 
doubled in the last year.
Q. What are the major 
changes in consumer 
demand?
A. Consumers are growing more 
confident and venturing further 
afield. In the Camping Division we 
see this in the increasing numbers 
who fly instead of drive. We have 
responded to this with a change  
in our capacity plans away from 
Northern France to more 
Mediterranean destinations, 
although the availability of  
camp-sites is limited in some 
regions. In the Adventure Travel 
Division, we see the constant need 
to add to our programmes, not 
just exotic new destinations such 
as Mauritania and Kamchatka, but 
also to reflect the fact that more 
families feel ready now to go on  
a ‘soft adventure’ trip, which was 
practically unheard of as little as 
five years ago. In the Hotel Breaks 
Division, we are seeing a shift from 
a focus on ‘just a room’ to interest 
in the overall experience, raising 
the importance of a theatre trip,  
a tour or a spa visit. 
Each of these trends has a 
common theme: more speciality 
focus, directly playing to our 
strengths. 
Q. What is the future for the 
Camping Division?
A. We are confident that with this 
season’s capacity reductions, the 
business is now ‘right sized’ for 
future growth. Camp-sites which 
have not kept up-to-date with 
increasing demands for facilities 
have been taken out of our 
programme and the shift from 
tents to mobile-homes continues. 
We have a number of exciting 
plans to broaden the appeal to 
families who enjoy self-catering, to 
‘empty-nesters’ who can enjoy the 
informal outdoor lifestyle outside  
of the high season and to all our 
customers by further enhancing 
our mobile-home estate with new 
accommodation concepts and 
locations. 
Q. How do you plan to 
exploit more inter-divisional 
synergies?
A. As a first step we are planning 
to bring together the divisional IT 
Directors to highlight opportunities. 
Simply applying best practice  
will have a significant impact. All 
divisions are being encouraged  
to identify opportunities. I am 
delighted at how successful Bookit 
was in selling camping capacity in 
the Netherlands for Eurocamp. 
Q. How do you plan to 
access the potential 
customer base in Eastern 
Europe?
A. We already sell our camping 
holidays in Poland and I hope to 
extend this to other new member 
states of the EU. Much depends 
on income levels and internet 
penetration, but both of these are 
catching up fast. On the flip side, 
we have significantly increased  
our hotel offering in cities such  
as Tallinn, Riga and Bucharest.
Q. How have geopolitical 
turmoil and climatic events 
affected the Adventure 
Travel Division?
A. Running tours that essentially 
cover the globe means that we are 
constantly vigilant. Terrorism is of 
particular concern but tends to be 
concentrated in more media visible 
city locations, which our tours tend 
not to visit. The regrettable 
depressing frequency of such 
events has begun to reduce the 
impact of terrorism on travel 
intentions – people seem to 
accept such events as part and 
parcel of life. Of bigger concern 
are climatic events, such as 
hurricanes and earthquakes; we 
have rearranged itinerary timings 
and/or routings as necessary. Our 
customers seem rather inured to 
all these situations and don’t seem 
to be put off easily!
Q. Is the formula of 
low asset intensity, 
high margins and cash 
generation one that you 
plan to keep to?
A. Absolutely. We command 
returns which most of our peer 
group would envy. Any prospective 
acquisition needs to meet these 
criteria as well as giving us a 
good, if not leading, market 
position.  8
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Financial Review
Bob Baddeley
Finance Director
Key Messages
 4% increase in headline profit before 
tax* and  % increase in headline 
earnings per share*
Increase in net debt of only £ 0.4m 
despite £39.6m invested in European 
acquisition
Strong balance sheet with financial 
headroom for further investment
In the year to 30 September 
2005 Holidaybreak plc increased 
headline profits before tax* to 
£32.0m (2004: £28.0m) and invested 
£39.0m (net of £0.6m cash acquired) 
in acquiring Bookit and Djoser. 
Despite this expenditure, net debt 
increased by only £10.4m to £22.9m 
as we continued to benefit from 
substantial cash generation in all 
businesses. 
Group Profit and Loss Account
Turnover in 2005 was up 7.6% on 2004 at 
£303.0m (2004: £28.6m). Operating profit 
before goodwill amortisation (£3.9m) and 
impairment (£8.7m) was 4.% higher than 
2004 at £35.8m. The acquired businesses 
contributed turnover of £25.0m and operating 
profit* of £4.2m. On a like-for-like basis, 
excluding the acquisitions, turnover was % 
below 2004 at £277.9m and operating profit* 
marginally higher at £3.6m (2004: £3.4m).
During the year, we sold two freehold properties 
for £3.0m, realising a profit of £0.6m. Keycamp 
had previously relocated from freehold premises 
in Sutton, Surrey and Explore Worldwide will be 
relocating to new freehold premises at a cost of 
£3.5m at the end of 2005. 
The Group’s net interest charge increased  
from £3.3m in 2004 to £4.4m. Interest cover* 
decreased from 9.4 times in 2004 to 9.3 times 
in 2005. The Group incurred costs of £0.5m  
in respect of renegotiating and increasing the 
existing borrowing facilities to finance the 
acquisitions. 
The overall tax charge, including full provision 
for deferred tax, was £7.6m and the tax rate  
of 38.9% was higher than 2004 (28.8%). This 
increase is due to goodwill impairment, referred 
to below, being substantially non-deductible for 
UK corporate tax. The headline tax rate, before 
goodwill amortisation and impairment, was 28% 
(2004: 26.7%).
Headline earnings per share* were 48.8p  
(2004: 44.0p).
The proposed final dividend of 9.35p per 
ordinary share represents an increase of 0% 
over 2004 and gives a total dividend for the 
year of 26.6p per ordinary share (2004: 24.2p). 
Dividend cover* is .8 times. 
Goodwill Impairment
The Board has reviewed the carrying value of 
goodwill arising from the acquisition of Eurosites 
in 2002 and, as a result, an impairment charge 
of £8.7m has been made in these accounts. All 
the goodwill relating to Eurosites has now been 
amortised or impaired.
Capital Expenditure
Capital expenditure (net of receipts from 
disposals) in the year to 30 September 2005 
was £2.4m (2004: £3.5m). Mobile-homes 
(£4.3m before disposals) accounted for the bulk 
of the expenditure. Accommodation capacity 
will again be reduced by a further 6% in 2006 
and hence we expect a further reduction in  
the level of the Camping Division’s net capital 
expenditure in the year to 30 September 2006. 
Expenditure on Explore Worldwide’s new 
freehold property will be £3.5m. Overall net 
capital expenditure for the Group for 2006 will 
be approximately £5.5m net of mobile-home 
disposals of £3.6m. 9
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
The Group’s depreciation policy is to write  
down the cost of mobile-homes to an estimated 
residual value over their projected economic  
life. Disposal proceeds of £3.m in respect of 
mobile-homes sold at the end of their useful  
life resulted in a loss of £0.2m. 
In order to extend their economic life, we 
continue to source mobile-homes of higher 
specification and to refurbish existing units.
Cash Flow 
The Group’s net borrowings at 30 September 
2005 were £22.9m, compared to £2.5m in 
2004. Cash flow from operating activities was 
£52.0m, another strong performance.
Available bank facilities (£40.0m as at  
30 September 2005) are sufficient to meet  
the working capital, investment and bonding 
requirements of the Group. To finance the 
acquisitions, the Group’s committed five year 
borrowing facilities were increased by £36.7m 
to £40.0m. Due to the highly seasonal nature 
of Camping Division’s cash flow, headroom 
under these facilities was £24.4m at the end  
of April 2005 when borrowings were at their 
maximum. In addition to these facilities we  
have hire purchase agreements with various  
UK financial institutions to finance the  
purchase of mobile-homes. 
Foreign Currency and Interest Rate  
Risk Management
The Group’s transactional foreign currency 
exposures arise from the sales of holidays in 
overseas markets and the costs of operating 
overseas, particularly accommodation and 
travel. Currency revenues, principally euros and 
US dollars, represent approximately 24% of 
total Group revenues. Currency outflows 
account for 32% of all Group costs. The 
Group’s policy is to hedge anticipated currency 
exposures and we have entered into forward 
contracts in respect of our expected trading 
cash flows for the next twelve months.
The Group’s exposure to interest rate 
fluctuations on its borrowings is managed by 
using interest rate swaps. At 30 September 
2005, the proportion of the Group’s gross 
borrowings at fixed and capped rates was  
52% and the average rate was 5.4%. The  
gross cash position was fully floating.
International Financial Reporting Standards 
We will be required to adopt International 
Financial Reporting Standards (IFRS) when 
preparing Group accounts for the year ended 
30 September 2006. In preparation for this, all 
IFRS requirements have been reviewed in detail 
to assess their likely impact on our reported 
results and the actions required to collect  
the necessary data. Data has been collected  
on a dual basis (UK GAAP and IFRS) during 
2004/05 to enable the restating of the opening 
‘transition’ balance sheet at  October  
2004 and the results for the year ended  
30 September 2005 under IFRS. We will  
be issuing an update to the market before  
3 March 2006.
It is not possible to assess with certainty all the 
effects of the transition to IFRS. However, we 
believe that the major areas of impact on our 
retained profit and shareholders’ funds will be:
• Share-based payments, whereby the 
income statement will include an annual 
charge based on the fair value of awards 
made to employees. A new Long Term 
Incentive Plan is proposed and details will  
be set out in a circular to shareholders prior 
to the AGM in March 2006. It has not yet 
been approved by shareholders and shares 
have yet to be issued under the scheme.  
The impact on results will be monitored as 
shares are issued and options exercised 
under existing share option schemes. 
• Capitalised goodwill, whereby the carrying 
value will be subject to annual impairment 
reviews, with no amortisation charge.  
The charge for goodwill amortisation and 
impairment in 2005 was £2.6m. 
• Open forward foreign exchange contracts 
which will be valued at year-end market  
rates, with any gains or losses charged to  
the income statement. 
• Proposed dividends will be recognised  
in the accounting period in which they are 
declared. Accordingly, the Group will reverse 
the accrual for its final dividend (£9.2m) and 
report it in the consolidated IFRS accounts 
for 2006.
Bob Baddeley
Finance Director
* Headline profits, headline EPS, interest and dividend 
cover are stated before goodwill amortisation and 
impairment of £2.6m.  0
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Hotel Breaks Division
Key Messages
Acquisition of Bookit in December 2004
83% operating profit growth for Bookit since acquisition
Continued expansion of European outbound programme   Holidaybreak plc
Annual Report and 
Financial Statements 2005  2
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Hotel Breaks Division
Nick Cust & Mark Wray 
Joint Managing Directors
The Hotel Breaks Division enjoyed a 
robust performance with operating 
profit* up 22% to £17.7m (2004: 
£14.5m). For the UK businesses, 
operating profit* increased by 3% 
to £14.9m on turnover that was 
flat at £120.9m. The results were 
dampened by the after effects of 
the London bombings in July. 
Overall divisional operating margins* were  
up from 2.0% last year to 4.0% primarily  
as a result of the Bookit acquisition. Bookit 
records commissions receivable rather than 
total transaction value of sales. The division 
continues to be cash generative with limited 
capital expenditure and very high returns on 
capital employed. In 2005, it generated £4.9m 
free cash flow** (2004: £6.9m).
Geographic Expansion
In December 2004, Holidaybreak announced 
the acquisition of Business Reservation Centre 
Holland Holding B.V., more commonly referred 
to as Bookit, for €33.5m (£23.m including 
expenses). On a pro-forma basis, the 
acquisition increased the total transaction value 
of the Hotel Breaks Division by 32%. Bookit  
is the market leading online intermediary for  
short-stay leisure breaks in the Netherlands 
operating on a commission based model. While 
Bookit principally markets to Dutch customers, 
it also has a sales presence in Belgium and 
Germany. Total transaction values for the nine 
months to 30 September 2005 increased  
by 52% to £30.2m and operating profit was  
up 83% (from £.6m to £2.9m) over the 
comparable period and exceeded initial 
expectations at the time of purchase.
Market and Consumers
The revenue split of the UK business has shifted 
to reflect ongoing business development. Within 
the UK, the London share decreased to 25% 
from 35% in 2004 – reflecting in part a move in 
demand away from the capital after the 7 July 
bombings. Meanwhile the overseas (primarily 
European) short-breaks business is now at 3% 
of revenue, up from 7% in 2004. 
Brand and Product Development
Superbreak has further developed its marketing 
relationships with P&O (for mini-cruise breaks) 
and a number of theatre ticket agencies 
(Ticketmaster, See and Cameron Mackintosh). 
These individually and collectively allow 
Superbreak to create more value added 
packages and sell directly to key target 
audiences. In addition the business continues  
to work with GNER, which brings the equivalent 
of over 50 jumbo jet loads of passengers from 
the North of England and Scotland to London 
every day. Other relationships include the 
Telegraph newspaper group, WHSmith and the 
Johnson Press (covering many regional papers). 
New partners for the coming year include the 
Royal Shakespeare Company.
Contracting work has been focused on 
increasing both the range of cities offered in 
Europe and the number of hotels in each city. 
There are now ,650 hotels in the European 
programme (up 7% over the previous year) 
and capacity across the UK has also been 
increased – from ,539 to ,64 hotels.  
This was helped by new hotel construction 
development. While the corporate market is 
accessible to the hotel chains through their 
online sites, the leisure market remains more 
impervious and Superbreak’s unique packages 
can deliver significant off-peak volume for 
hoteliers, making it a valued partner. Superbreak 
was awarded ‘Best Short-Breaks Operator’ and 
‘Best Tour Operator to the UK and Ireland’ at 
the 2005 TTG British Travel Awards.
Bookit consists of three main brands. 
Weekendjeweg.nl, the core brand, offers hotel 
accommodation for two night weekend stays 
primarily in the Netherlands, Belgium and 
Germany. Nachtjeweg.nl provides overnight 
accommodation while Bungalows.nl, a 
www.superbreak.com
+44 (0)870 234 9999
www.hotelnet.co.uk www.weekendjeweg.nl  3
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Sales revenue by destination (2005)
London 25%
Rest of UK 48%
Netherlands 16%
Overseas 11%
successful initiative in its second year, caters  
to the huge Dutch habit of self-catering 
accommodation on holiday parks in the 
Netherlands. This year, Bookit launched a new 
brand Hotelletje.nl offering small family-run 
hotels. Bookit is the third largest tour operator  
in the Netherlands by number of customers.
Distribution and Internet Developments
Within the UK business, sales through high 
street agencies continue to represent just over 
half of all business and the division’s brochures 
can be found in over 90% of agency outlets, 
giving unrivalled presence. Direct bookings to 
the York call centre account for 23% of sales 
with the internet at around 25%. The latter  
has grown effectively without costly consumer 
marketing campaigns, ensuring that this 
channel is equally profitable. 
Bookit’s operation is 85% online with the 
balance of business going through the call 
centre. Bookit’s weekly email newsletter  
goes to over a million subscribers and the 
Weekendjeweg.nl website was the most visited 
Dutch leisure website in August 2005. 
From a technology standpoint, Superbreak is 
working at lowering transaction costs, via 
electronic free sale, seamless connectivity into 
reservation systems and electronic invoicing. 
Work will continue to develop online capabilities, 
relations with affiliates and partners, as well as 
plans to redesign the main websites in the UK 
and the Netherlands. Opportunities for shared 
learning between Bookit and the UK business 
are being looked into but the emphasis in this 
first year has been on integration rather than 
looking for synergies.
Management T eam
The management team, led by Nick Cust and 
Mark Wray (Joint Managing Directors), now 
includes Marianne Baars (Managing Director) 
and Karel Vos (Commercial Director) from 
Bookit. Other senior Dutch executives include 
Ary-Jan Van Winden (Finance) and Eric Heertje 
(IT). The other senior UK directors remain 
unchanged: Ray Jones (Brand Development), 
Ian Mounser (Sales) and Frank Regan 
(Operations). 
Strategy
The Hotel Breaks Division is a leading player of 
the UK short-breaks market. As market leader 
through retail travel agents, it is able to 
command both attractive rates and best 
availability – a point not lost on suppliers, travel 
agents or customers. The division has been 
able to withstand margin pressure, although  
not without replacing some accommodation 
providers with others. The increasing disposable 
incomes of the target market, coupled with 
greater emphasis on leisure time, point strongly 
towards continued growth in the market. In 
parallel, increasing breadth of offering will help 
reduce the business impact of unforeseen 
events such as the London bombings. 
The division remains committed to supporting 
the trade and operates a policy that does not 
favour any channel in terms of price or service, 
thereby allowing customers to decide how they 
wish to access the product. Further work is 
planned to enhance the UK websites in terms of 
functionality to support the continued growth in 
this channel.
Bookit highlights the peculiarly national nature  
of continental hotel accommodation markets. 
While many online players are moving towards  
a very standardised approach across Europe, 
experience suggests each market is in fact very 
different. By understanding these cultural 
differences, we achieve better margins and 
attain closer relationships with both trade and 
customers. Plans are in place to develop further 
Bookit’s presence in the Netherlands following 
the launch of Hotelletje.nl. The business will 
examine opportunities for further geographic 
expansion in hotel provision either by organic 
growth or acquisition.
* Operating profit stated before goodwill amortisation  
of £.2m. 
** Free cash flow defined as operating cash flow after 
capital expenditure net of disposals. 
Strategy
Increase distribution reach within the UK 
via internet, direct marketing and market 
leadership position in UK travel agencies
Extend business into European markets 
through organic growth and acquisition
Expand range of products to meet 
evolving consumer aspirations
Develop mutually beneficial relationships 
with hotels
Maintain/reduce overhead cost ratios
 
 
4,537 hotels across all brands
 
106,000 theatre breaks
 
29m unique visitors to websites  4
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Adventure Travel Division
Key Messages
Acquisition of Djoser announced in December 2004
Move to online accelerates 
Growth in product range of all companies  5
Holidaybreak plc
Annual Report and 
Financial Statements 2005  6
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Adventure Travel Division
www.exploreworldwide.com
www.regal-diving.co.uk www.djoser.nl
+44 (0)870 220  777 +44 (0)870 333 400 Simon Tobin
Managing Director
The Adventure Travel Division 
has had another impressive year. 
Turnover was up 67.3% to £62.6m 
(2004: £37.4m) and operating profit* 
increased by 62.5% to £5.1m (2004: 
£3.2m). The operating margin* was 
8.2% (2004: 8.4%) and £12.7m of 
free cash flow** was generated 
(2004: £2.8m).
Geographic Expansion
In December 2004, Holidaybreak announced 
the acquisition of Djoser, the Dutch market 
leader in adventure travel, for €22.75m (£6.5m 
including expenses). This acquisition increased 
the size of the Adventure Travel Division by 
approximately 60%. Sales growth of this 
business since acquisition has been about 9% 
and progress to date is in line with expectations. 
On a like-for-like basis the turnover of the UK 
business increased by 6.3%. With its escorted 
tours in 85 countries, Djoser is one of the 
largest adventure holiday operators in mainland 
Europe and is a brand widely recognised by 
Dutch and Belgian consumers. The market for 
specialist and active holidays has grown rapidly 
in the Netherlands as it has in the UK, where 
Explore is market leader. 
Market and Consumers
The Adventure Travel Division sells active and 
discovery holidays to small groups, most of 
which are led by specially trained tour leaders. 
These ‘soft adventure’ holidays are aimed at 
consumers looking for a unique experience. The 
division’s customers tend to seek interaction 
with local cultures and communities at a greater 
level than can be achieved on traditional 
package holidays, helped by itineraries that 
steer away from the obvious tourist locations. 
Customers have an increasing awareness 
about, and interest in, responsible tourism, 
which the division actively promotes and 
regards as a core part of its business practice. 
Tours to 3 countries worldwide are now 
offered by Explore – the largest specialist range 
in the market. This year the business has faced 
exceptional events, in particular the tsunami  
in South-East Asia and the terrorist attacks  
in Egypt, Turkey and Bali. Fortunately all 
customers in the areas affected were safely  
and rapidly accounted for and repatriated as 
circumstances demanded. The resilience of the 
division’s businesses to these situations has 
been demonstrated by the minimal impact that 
these events have had on divisional profitability 
and forward bookings. 
Globalisation is removing barriers of entry  
to countries which previously had limited 
accessibility and is promoting a demand for 
long-haul travel where experience is valued 
more highly than simply a beach holiday. 
Demand for ‘soft adventure’ holidays worldwide 
remains robust and there is even trading up, 
despite the impact of increased fuel costs  
on prices. 
Brand and Product Development
The range of products under the Explore  
brand includes the main programme, Explore 
Worldwide and a variety of specialist 
programmes: Explore Family Adventures, 
Explore Adventure Breaks (shorter duration 
trips), Explore Cycle, Explore Beyond (for long-
standing customers seeking something really 
out of the ordinary) and Explore on Foot. Djoser 
has a main worldwide programme and a family 
version ‘Djoser Junior’. In total over 500 
separate itineraries are offered under the 
Explore and Djoser brands. 
The Explore programmes, which are targeted at 
specific groups of consumers, have performed 
strongly during the year; most notably Explore 
Family Adventures grew by 00% and Explore 
Cycle by 70%. This tailoring of tours to meet 
high margin niche demands will be extended 
with new offerings in 2006/07. 
+3 (0)7 5 2 6400 European specialist holiday group
 7
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Explore & Djoser: Tours by destination (2006)
Europe (inc. Greece, Turkey and Cyprus) 28%
 Asia (except India) 22%
 Africa (except Egypt) 21%
 Americas, Paciﬁc and Australasia 19%
 Egypt and Middle East 9%
 Arctic and Antarctica 1%
Strategy
Consolidate market leadership position 
in European ‘soft adventure’ sector
Develop new products to drive growth 
of division
Expand online business to 50% in  
three years
Identify and capitalise on synergies with 
recent acquisition
Manage load factors to drive profitability
RegalDive, a specialist provider of scuba diving 
holidays, sells mainly to locations in Egypt  
and the Red Sea but has steadily increased  
its range to other worldwide destinations and 
these now account for 25% of total revenue. 
Further expansion will be sought with specialist 
products introduced to meet technical and 
‘liveaboard’ requirements. 
Distribution and Internet Developments
The Adventure Travel Division’s businesses are 
primarily direct selling operations. Outside of the 
home markets, general sales agents are used  
to support and distribute the product – the main 
markets are the US, Canada and Australia for 
Explore and Belgium for Djoser. 
Each of the brand’s websites have unique 
features, for example Explore allows potential 
customers to view streaming videos illustrating 
sample tours whilst Djoser has developed a 
unique interactive experience and individual 
booking self-management tool for its customers 
under ‘Mijn Djoser’. Both websites have full 
online booking capabilities, but the complex 
nature of the products results in most 
customers having direct telephone contact with 
the country/product expert in the call centres. 
Online capability for Explore was only launched 
early in 2005 but already accounts for 25% of 
total bookings; a substantial increase in online 
bookings is anticipated. At Djoser about 65%  
of bookings are already made online. 
Management T eam
The Adventure Travel Division’s management 
team comprises Simon Tobin (Managing 
Director), Mike Tyler (Finance Director), Ashley 
Toft (General Manager Explore), Sander van 
Opstal (General Manager Djoser), Andreas  
Elia (General Manager RegalDive) and Derek 
Moore (Aviation Director); and Herman van der 
Velde (founder of Djoser) retains a strategic 
advisory role.
Strategy
The combination of Explore and Djoser brings 
together complementary strengths. Explore has 
extended its business by the development of  
an exclusive product range designed to satisfy 
the specific demands of its customers. The 
distinctiveness of many elements makes it hard 
or impossible for customers to replicate and 
underpins the division’s specialist credentials. 
The product-led strategy has proven successful 
in achieving both a high level of growth and 
strong margins. The Djoser business has 
expanded through a strong marketing approach 
and, consequently, high brand awareness. 
A push on more specialist product strategy is 
already being seen as Djoser prepares to launch 
in 2006 an individual walking programme in a 
style similar to Explore. Further opportunities 
have been identified for the benefit of both 
businesses by sharing best practice in website 
development and marketing activity. 
The division will continue to develop products 
organically, however opportunities to grow  
by acquisition to gain expertise and strong 
market positions in specialist sub sectors or  
in a new geography (such as with Djoser in the 
Netherlands) are constantly being reviewed. 
* Operating profit stated before goodwill amortisation  
of £2.2m. 
** Free cash flow defined as operating cash flow after 
capital expenditure net of disposals.
 
 
131  countries feature in  
Explore brochures
 
65% of Djoser’ s bookings are online
 
9 new countries added to programmes  8
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Camping Division
Key Messages
Overheads reduced whilst increasing customer satisfaction 
in resorts
Camp-site occupancy rose by 3%
Restructured business and management team  9
Holidaybreak plc
Annual Report and 
Financial Statements 2005 20
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Camping Division
Matthew Cheetham
Managing Director
www.eurocamp.co.uk
www.keycamp.co.uk www.perfectplacesonline.com
+44 (0)870 700 0740 +44 (0)870 90 94 0 +44 (0)870 366 7567
Camping Division turnover fell by 
7.7% in 2004 to £113.7m but, with 
capacity cut by 12%, occupancy 
levels improved by 2.6%. Operating 
profit* declined by 5.4% to £13.0m 
(2004: £13.7m). Operating profit* 
margin improved to 11.4% (2004: 
11.1%) and remains well ahead 
of industry averages. The sharp 
decline in profits experienced  
since 2002 was arrested by  
aligning capacity with market 
demand and reducing costs. 
The division recorded its highest 
ever levels of customer holiday 
satisfaction scores.
Taking account of mobile-home sale proceeds, 
net capital expenditure for the Camping Division 
totalled £.5m and the division generated free 
cash flow** of £2.9m (2004: £8.9m).
Market and Consumers
In recent years the holiday industry throughout 
Europe has seen a marked change in travel 
patterns. The growth of low cost carriers  
and convenient regional departure airports is 
encouraging consumers to take more frequent 
shorter breaks to new destinations and hire a 
car rather than drive all the way from home to 
resort. Camping holidays have traditionally been 
for longer durations and, for most customers 
from the UK and Eire, have included a ferry 
crossing and typically travelled to sites located 
up to four hours drive from ferry ports.  
To respond, the division now offers ‘fly drive’ 
options within holiday packages to its sites 
across Europe. These are proving popular with 
UK and Irish based customers especially to 
destinations further away, including Southern 
France and Italy.
The trend towards later bookings by customers 
continues. The division remains a relatively high 
fixed cost business and is concentrating on 
managing high season yields more successfully 
by holding prices and resisting discounting  
in pursuit of earlier bookings. Capacity cuts  
in areas of weaker demand have supported  
this revenue management strategy. Overall 
accommodation capacity (tents and  
mobile-homes) in 2005 was reduced by 2% 
and in 2005/06 we intend to reduce it by 6%. 
Camp-site occupancy, which had fallen in 2004 
by 4%, rose by 3%, a prime goal for 2005.
Of the camping holidays arranged by the 
division, 60% have France as their destination. 
This share is declining each year as other 
countries’ popularity has increased. This is 
partly due to shifts in overall demand and partly 
to low cost flying opening up new destinations 
in countries which are perceived to offer better 
value for money. The Camping Division is, 
accordingly, expanding its range of destinations 
to include a greater proportion of its capacity 
located in southern European locations, notably 
Spain, Sardinia and Croatia.
Low season bookings have been affected by 
UK and Eire’s consumer reluctance to take 
school age children on holiday outside of 
traditional school breaks. As a consequence, 
the division is now marketing more to couples 
without children and to special interest groups. 
Brand and Product Development
The main Camping brands, Eurocamp and 
Keycamp, have broadly retained market share 
during the year in a difficult market. In 2005  
the brands have been re-positioned to ensure 
they are marketed distinctively. Keycamp has 
been positioned as a provider of self-catering 
accommodation and Eurocamp as a brand to 
appeal to customers seeking a family camping 
holiday. Keycamp received the recognition as 
‘Best Camping and Mobile-Home Operator for 
2005’ in the TTG British Travel awards.  European specialist holiday group
2 Holidaybreak plc
Annual Report and 
Financial Statements 2005
Sales revenue by market (2005)
UK and Ireland 67%
Netherlands 19%
Germany, Switzerland, Austria 11%
Others 3%
Strategy
Improve occupancy rates, optimise 
yields and increase margins
Retain tight control of costs in line with 
capacity
Develop e-commerce initiatives and 
affiliate relationships to target new 
customer groups in the UK and 
overseas
Increase consumer reach of existing 
brand portfolio and increase 
differentiation of brands
Develop mobile-home holiday 
distribution business using camp-site 
owned accommodation
+44 (0)870 366 7567
With consumers looking for more luxurious 
mobile-home accommodation, the division has 
undertaken market research to determine the 
additional features now being demanded. 
Accordingly outside wood decking and air 
conditioning are being rolled out across more 
locations and the division is planning to extend 
its product range by offering chalets, with trials 
being undertaken in 2006. 
Eurocamp, which already offers holidays  
to European customers from nine countries,  
will be extending its product distribution further 
in 2006. 
Perfect Places, a self-catering accommodation 
provider, has been repositioned and is 
broadening the geographical range and depth 
of its product to include Croatia, Iberia and  
Italy in 2006. Easycamp, a distribution brand 
which sells camp-site owned mobile-home 
accommodation from the Netherlands and 
Germany, has seen good growth. In 2006 there 
are plans to expand the brand to sell from other 
European countries. 
Internet Developments
Online booking was launched in 2003 and by 
2004 approximately 2% of all bookings for  
that year were made through this channel. This 
year the division has experienced strong online 
booking growth with 2% of all bookings made 
online and anticipates further growth in 2006. 
Customers are increasingly using the division’s 
websites as a facility for researching, requesting 
brochures, checking availability, obtaining 
quotes and, more recently, making payments. 
The division is introducing streaming videos  
to allow accommodation, holiday parks and 
broader destination information to be viewed 
online. It is also an objective to help change 
consumer preconceptions about the product.
This year the Camping Division established a 
distribution arrangement with Bookit, the 
business newly acquired by the Hotel Breaks 
Division in the Netherlands. The arrangement, 
which provided a useful contribution, created a 
new distribution channel to sell camping 
products in the Netherlands.
Management T eam
The Camping Division is led by Matthew 
Cheetham (Managing Director). Additional 
divisional board directors include Steve Whitfield 
(Operations), Deborah Beckett (Managing 
Director, Eurocamp), Robin Parry (Managing 
Director, Keycamp) and Wendy Pritchard 
(Finance and Commercial). In November 2005, 
the division appointed Graham Sadler as its 
new IT Director.
Strategy
The camping industry, in which Eurocamp  
and Keycamp are European market leaders, 
continues to face major challenges from 
alternative types of holidays and destinations.  
In order to maintain high levels of customer 
satisfaction, the division conducts extensive 
research to identify changing customer 
requirements and this information will help  
lay the foundations for future plans.
The primary objectives of the Camping Division 
are to maintain strong margins, to increase 
camp-site occupancy rates and to continue  
to generate substantial cash. It is now well on 
the way to achieving these goals: margin has 
increased from .% to .4%, occupancy 
has improved by 2.6% and free cash flow**  
was £2.9m. With further capacity reductions 
planned for 2006, the issue of excess capacity 
(particularly in certain regions of France) has 
been addressed and the estate is now 
appropriately sized. 
In the medium to long-term the division plans  
to replace its fleet with more luxurious  
mobile-home accommodation and introduce 
new types of self-catering accommodation. 
With extended coverage by low cost airlines, 
the division will look to develop into new regions 
in Southern and Eastern Europe.
*  Operating profit stated before goodwill amortisation and 
impairment of £9.2m. 
** Free cash flow defined as operating cash flow after 
capital expenditure net of disposals.
 
 
219 camp-sites
 
1,440 overseas couriers
 
21 %  of bookings online  
(up from  % in 2004) 22
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Directors and Advisors
1 4 8
2 5 9
3 6 10
7 11 23
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
1. Robert (Bob) Ayling (59) 
Chairman of the Board and Chairman of the 
Nomination Committee
Bob was the Group Managing Director and 
Chief Executive of British Airways plc from 992 
to 2000. Before that he held line management 
responsibilities as well as having been the 
airline’s legal adviser. He is a solicitor by 
profession and practised for almost 20 years in 
the City (of London) and as a senior government 
legal adviser. He is currently the Vice Chairman 
of Dyson Ltd, Chairman of the International 
Dispute Resolution Centre, London and a 
governor of King’s College School, Wimbledon. 
He was appointed a Non-executive Director of 
Holidaybreak plc in February 2003 and became 
Chairman in June 2003.
2. Carl Michel (42)
Group Chief Executive
Carl joined the Company in September 2005. 
He has an MBA from Harvard Business School 
and has extensive experience in the travel 
industry having worked for British Airways and 
Opodo. Immediately prior to joining Holidaybreak, 
he had held a number of consultancy roles 
including with a private equity firm and a 
business raising funds for an airline related start 
up venture. He has also spent about five years 
working in Germany as CEO of Deutsche BA.
3. Bob Baddeley (52)
Group Finance Director
Bob is a Chartered Accountant who joined the 
Company in February 995 from Swan Steel 
Group Ltd where he was Group Finance 
Director. His career has included senior financial 
positions at The Albert Fisher Group plc and 
Unigate plc (now Uniq plc).
4. Mark Wray (49)
Joint Managing Director, Hotel Breaks Division
Mark is a Chartered Accountant who joined 
Superbreak in 984 as Finance Director and 
was a leading member of the MBO team.  
He holds special responsibility for finance and 
administration. Mark was appointed to the 
Holidaybreak plc Board in September 997.
5. Nick Cust (48)
Joint Managing Director, Hotel Breaks Division
Nick has worked in the leisure industry since 
980. He joined Superbreak in 985 and was a 
leading member of the MBO team. Current 
responsibilities include sales, internet, marketing 
and product development and key hotel and 
agent contracts. He became a member of the 
England Marketing Advisory Board (formerly the 
English Tourism Council) in September 2002. 
Nick was appointed to Holidaybreak plc Board 
in September 997.
6. Simon T obin (50)
Managing Director, Adventure Travel Division
Simon joined Keycamp Holidays in 990 from 
Contiki Travel, the European coach holiday 
operator where he was Director and General 
Manager. He was appointed Sales Director of 
Keycamp in 995 and Managing Director in 
998, soon after the acquisition by 
Holidaybreak. Appointed Managing Director of 
Explore Worldwide and the Adventure Travel 
Division in January 200, at which point he 
became a member of the Board.
7. Matthew Cheetham (44)
Managing Director, Camping Division
Matthew joined Airtours Holidays as Treasurer in 
998 from Citibank before taking an MBA and 
Institute of Marketing qualification at Cranfield 
Business School. He set up EuroSites in 989 
(which was acquired by Holidaybreak plc in 
2002). He was responsible for MyTravel PLC’s 
UK Specialist Holidays Division which included 
Bridge, Cresta, Leger, Tradewinds, Jetset  
and EuroSites. Matthew was appointed to 
Holidaybreak plc Board in February 2004.
8. James Wallace (62)
Non-executive Director, Senior Independent 
Director and Chairman of the Audit Committee
James is a Chartered Accountant who joined 
Pifco Holdings plc in 97, becoming Finance 
Director in 976 and subsequently Deputy 
Chairman. He left Pifco in 200 following an 
agreed take-over. He was appointed Non-
executive Chairman of Bodycote International 
plc in 200 having served on the Board as a 
Non-executive Director since 994. In May 
2005, he was appointed a Non-executive 
Director of NCC Group plc. He is also Chairman 
of the Lowry Theatres and galleries. James was 
appointed as a Non-executive Director of 
Holidaybreak plc in May 2002.
9. Sally Martin (46)
Non-executive Director and Chair of the 
Remuneration Committee
Sally was General Manager UK/Ireland, Middle-
East and Africa of Qantas Airways Ltd and a 
board member of Qantas Holidays plc from 
999 to 2004, based in London. Prior to joining 
Qantas, Sally spent 6 years with Air New 
Zealand. She is currently a board member of 
Australia Business in Europe and a Committee 
Member of The Cook Society. Sally joined the 
Board of Holidaybreak plc in July 2004 and 
became Chair of the Remuneration Committee 
in January 2005.
10. James Greenbury (44)
Non-executive Director
James has spent the last 6 years developing, 
acquiring, growing and successfully exiting a 
series of private equity backed support services 
companies. He is currently Chief Executive of 
Special Mail Services Ltd, a competitor to Royal 
Mail in the secure mail market, as well as 
Chairman of Go Plant Ltd, a municipal services 
business. James joined the Board on  January 
2005.
11. Alex Williamson (35)
Company Secretary
Alex joined the Group in September 2004.  
She was previously at Eversheds solicitors. She 
is a solicitor and is Company Secretary of 
Holidaybreak plc.
Fuller information on the Directors and the 
Company Secretary can be found on our website 
at www.holidaybreak.co.uk.
Auditors
Deloitte & T ouche LLP
20 Deansgate, 
Manchester M60 2AT
Solicitors
Eversheds LLP
Eversheds House, 70 Great Bridgewater Street, 
Manchester M 5ES
Principal Bankers
Barclays Bank plc
5 Mosley Street, Manchester M60 2HQ
Royal Bank of Scotland plc
 Spinningfields Square, 
Manchester M3 3AP 
Stockbrockers
Dresdner Kleinwort Wasserstein
20 Fenchurch Street, London EC3P 3DB
T eather & Greenwood Limited
Beaufort House, 5 St Botolph Street, 
London EC3A 7QR
Registrars
Capita IRG Plc
Northern House, Woodsome Park, Fenay 
Bridge, Huddersfield HD8 OLA 24
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Corporate Social Responsibility
The Board believes that it is 
in the Company’s interest to 
recognise environmental and social 
issues arising from the growth 
in travel and its responsibilities 
to the communities in which the 
Group operates. In recognition 
of its commitment, this year 
Holidaybreak has again met the 
FTSE4Good criteria and continues 
to be a member of the FTSE4Good 
Index Series. We are also included 
in the holdings of several ethical 
investment funds. 
The section below summarises the Group’ s current 
performance in relation to key areas of Corporate 
Social Responsibility (CSR). 
Environment
We believe it is in the Group’s interest to be 
aware of, and seek to minimise, the risks arising 
from the social and environmental impact of our 
activities. We therefore commit to the following 
environmental policy.
•  Provide ‘Responsible Tourist’ advice to 
customers. 
•  Those subsidiaries (Camping and Adventure 
Travel) that are members of AITO will continue 
to support the Association’s policy on 
Responsible Tourism. 
•  Ensure employees are made aware of 
environmental issues through guides, 
manuals and training. They are asked to act 
with these in mind when making decisions, 
investigating alternatives and planning various 
aspects of the product and service. 
•  Ensure that employees are appropriately 
trained and motivated to apply this policy in 
their daily work. 
•  Promote awareness of environmental issues 
with suppliers. 
•  To review and update the approach to the 
environment on an annual basis.
We are committed to the disposal and 
management of waste in a responsible manner. 
We have water and energy saving systems in 
our office sites. All our offices utilise licensed 
waste removers who provide appropriate 
documentation for the transfer of waste. 
Employees
Holidaybreak is committed to an equal 
opportunities policy.
We are committed to the principle of equal 
opportunity in employment and customer 
service regardless of a person’s sex, marital 
status, race, colour, disability, sexual orientation, 
age, nationality, ethnic origin, religion or belief. 
We will therefore apply policies which are fair, 
equitable and consistent. In employment terms, 
our policy will ensure that all employees are 
accorded equal opportunity for career, training, 
promotion and access to benefits.
Training
Holidaybreak is committed to the personal and 
professional development of all staff. We aim  
to provide appropriate development for every 
member of staff through consultation with the 
manager and individual. Each division now  
has a dedicated training officer, following the 
creation of this position in Explore this year. 
The Camping Division has a Training and 
Development policy, which has been accredited 
with the Investors In People Standards. This 
year, a Staff Development Model was created  
to help identify effective performance and 
development needs of individuals. The model 
has been incorporated into the formal 
performance review process. 
The Adventure Travel and Camping Divisions 
circulate an annual Staff Opinion Survey; the 
results are communicated to all employees and 
are used to develop initiatives to improve the 
company culture. 
Sharesave Scheme
The Company runs an annual Sharesave 
Scheme that allows employees of Holidaybreak 
to save regularly for a period of three or five 
years. Options over shares in Holidaybreak plc 
are granted at a discount to the share price  
at the time the contract is entered into. On 
maturity, employees receive a tax-free bonus  
on savings and are able to use the savings and 
bonus to buy shares in the company.
Following maturity of two schemes this year, 
Superbreak employees were featured in a 
national newspaper. The article highlighted the 
benefits to employees of joining employee share 
ownership schemes.
Health and Safety
Holidaybreak has a Health and Safety policy, 
which is communicated to all staff through a 
Health and Safety manual and displayed on 
notice boards at each office. Specific manuals 
have also been written and tailored for tour 
leaders and couriers. All manuals cover the  
use, handling and storage and transport of 
articles and substances and provide sufficient 
information, instruction, training and supervision 
to assist all personnel to avoid hazards and 
contribute positively to their own health and 
safety at work. Each division has an appointed 
Health and Safety officer, who regularly reviews 
the Health and Safety policy to ensure it meets 
best practice guidelines.
Customers
Our holidays are monitored carefully to ensure 
high levels of customer satisfaction. The Hotel 
Breaks Division adheres to both a Customer 
Service Charter and various other pledges to 
travel agents which, in particular, cover price 
guarantee, customer satisfaction and quality  
of service.
Low levels of customer dissatisfaction are 
experienced and there is a consistently  
high resolution of any complaints in one 
communication.
Customer satisfaction at all levels remains at  
the heart of product delivery and has been 
recognised by the UK Retail Travel Trade which 
has voted Superbreak the Top UK Short-Break 
Tour Operator every year since  988. Bookit was 
voted the top leisure website in the Netherlands 
by Dutch consumers in December 2004.
Explore and the Camping Division adhere 
closely to the AITO quality charter, which 
includes standards on all aspects of tour 
literature accuracy, service levels, quality 
standards, responsible tourism, customer 
relations and financial security.
Each division has a system in place for 
identifying and reporting customer-related health 
and safety issues. All matters are promptly 
communicated to the relevant individuals and 
actioned accordingly. The Board receives 
monthly reports on health and safety statistics 
from each division and monitors performance.
Suppliers
Holidaybreak encourages long-term relationships 
with small and large suppliers. The Camping 
Division reviews copies of environmental policies 
from its major suppliers. If no policy is in place, 
suppliers are asked to confirm their current 
procedures in relation to social, environmental 
and ethical (SEE) risks. This year, the division 
had discussions with a factory in Shanghai 
about production of tents in China. The supplier  25
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
had to confirm in writing that its factory complied 
with relevant humanitarian standards before any 
agreement was concluded. The division regularly 
reviews and updates its supplier appraisal forms 
in relation to relevant SEE issues. 
Communities and Charities
We recognise that we have a responsibility to 
support the development of the communities  
in areas where we have a local impact. We 
encourage our divisions to become active in 
these local communities, supporting employee 
involvement wherever possible. We also 
encourage charitable fundraising, locally and 
throughout the world. 
The Adventure Travel Division contributes  
to projects in countries in which it operates.  
It seeks projects that put money back into  
the country, ranging from providing wells to 
contributing to orphanages. It also ensures local 
economies benefit directly by using locally 
owned suppliers to provide guides and services.
Explore Worldwide supports numerous 
charitable projects including:
•  Sight Savers, a charity established to prevent 
and cure blindness and support people who 
are blind to lead independent lives. Explore 
supports Sight Savers’ work in Mali to 
combat river blindness by funding its 
vaccination programme in communities along 
the Niger River. All clients travelling to Mali are 
given information about the project.
•  The Sunshine Orphanage in Luxor cares  
for abandoned children. Explore makes an 
annual donation to Sunshine for each of  
its travellers to Egypt. It also encourages 
customers to make a personal donation by 
informing them about the project in its 
literature and on its website. 
Djoser, our recent Dutch acquisition, is a big 
supporter of Unicef. It offers its customers the 
opportunity to donate to Unicef through their 
holiday booking and then matches this amount. 
Last year’s donation was approximately 
€00,000 and was used to support an Early 
Childhood Development project in Sri Lanka.
Responsible T ourism 
The Adventure Travel Division regards 
responsible tourism as a core part of its 
business practice and a driving force behind its 
environmental policy. Explore, with the strapline 
‘Small Groups Leave Fewer Footprints’, is the 
driving force in this field having achieved the 
highest responsible tourism rating from AITO for 
both its environmental management programme 
and its responsible tourism work in destinations. 
In support of this, Explore has an in-house 
responsible tourism forum that meets regularly 
to discuss how the division can improve 
performance and communicate initiatives  
to its customers. 
Explore’s environmental policy is summarised 
below. A full copy can be found on the Explore 
website, www.explore.co.uk. 
•  Operate small tour groups to minimise the 
impact on the local culture and resources.
•  Ensure people who work for Explore are 
treated fairly and paid appropriately.
•  Encourage good relations with communities 
by including local visits and an education on 
the customs and cultures within each tour.
•  Use locally owned suppliers wherever  
viable to bring economic benefits to the 
communities. However, suppliers must meet 
Explore’s environmental standards.
Explore is actively involved with industry  
bodies to help raise awareness and promote 
sustainable tourism. It is a member of the  
AITO Responsible Tourism Committee to 
improve the responsible tourism practice of its 
membership. Explore works closely with the 
Travel Foundation, an independent UK charity 
that aims to help the outbound travel industry 
take effective action on sustainable tourism,  
and is a member of its Activities Committee, 
which directs funding to a variety of responsible 
tourism projects worldwide.
More specifically, Explore is currently working 
with Tourism Concern, a registered charity that 
campaigns for ethical and fairly traded tourism, 
to ensure that local porters receive a fair pay 
and are treated appropriately. Together they are 
developing the first Working Conditions Code of 
Practice for the travel industry. Explore visited 
Egypt in April 2005 to research how the Code 
could be implemented.
T sunami Relief
Following the tsunami disaster on 26 December 2004, Explore 
has worked with local agents to provide supplies on the ground 
directly where they were needed, rather than giving cash to 
anonymous funds. A total of nearly £30,000 was raised to fund 
the construction of fishing boats in India, a community centre in 
Thailand and temporary and permanent housing in Sri Lanka. 
£30k
Fund raised
T sunami relief
Small Groups Leave Fewer Footprints
For the second year running, Eurocamp held its ‘Lone 
Parent of the Year Award’ working with two lone parent 
organisations, Gingerbread and One Parent Families.
Working with Hope Worldwide, Explore has funded the 
construction of fishing boats for five families in India.  26
Holidaybreak plc
Annual Report and 
Financial Statements 2005
The Board is committed to high standards of corporate 
governance in its management of the affairs of the 
Company and the Group. This report, together with 
the Directors’ Remuneration Report on pages 31 to 35, 
describes how the principles set out in section 1 of the 
Combined Code on Corporate Governance (published 
in July 2003) (‘the Code’) are being applied. 
The Board of Directors
The Board of Directors is currently made up of six Executive Directors, 
three Non-executive Directors and the Chairman. Each Non-executive 
Director and the Chairman is considered to be independent of 
management and free from any business or other relationship which could 
materially interfere with the exercise of their independent judgement. The 
positions of Chairman and Chief Executive are not combined ensuring a 
clear division of responsibility at the head of the Company. James Wallace, 
a Non-executive Director and Chairman of the Audit Committee, has been 
designated as Senior Independent Director. Collectively, the Non-executive 
Directors provide broadly based knowledge and experience to the Board’s 
deliberations. The complementary range of financial, operational and 
entrepreneurial experience ensures that no one Director or viewpoint is 
dominant in the decision-making process. It is not the Board’s intention to 
increase the number of Non-executive Directors and therefore, given the 
present number of Executive Directors the Company does not comply with 
the provision in the Code requiring at least half the Board, excluding the 
Chairman, to comprise independent Non-executive Directors.
Biographical notes on all the Directors are given on page 23 of the  
annual report and financial statements. Fuller biographies together with 
biographies of the Divisional Directors are available on the Company’s 
website at www.holidaybreak.co.uk.
Appointments to the Board are made after receiving recommendations 
from the Nomination Committee.
The practice is to appoint Non-executive Directors for specified terms of 
three years, subject to three months notice within that period and also 
subject to re-election and to Companies Act provisions relating to the 
removal of a Director. Re-appointment is not automatic. In May 2005, 
James Wallace was appointed for a second three-year fixed term. New 
Directors appointed by the Board must submit themselves for re-election 
by shareholders at the Annual General Meeting following their appointment. 
Thereafter the Company’s Articles of Association require that all Directors 
stand for re-election at intervals of not more than three years. The 
Chairman will confirm to shareholders when proposing re-election that, 
following formal evaluation, the individual’s performance continues to be 
effective and they continue to demonstrate commitment to the role. Any 
term beyond six years for a Non-executive Director will be subject to 
rigorous review and will take into account the need for progressive 
refreshing of the Board.
Procedures are in place to ensure that all Directors are provided with 
appropriate and timely information, and Directors have access at all times 
to the advice and services of the Company Secretary. The Company 
Secretary is responsible for ensuring good information flow, that Board 
procedures are followed and that applicable laws and regulations are 
complied with. Directors are able to take independent professional advice, 
if necessary, at the expense of the Company.
Corporate Governance
Formal evaluation of the performance of the Board and of the principal 
Board Committees was conducted in 2005. The Company Secretary 
facilitated a formal discussion on the effectiveness of the Board and  
its Committees which all Directors attended. The discussion covered  
a wide range of issues including Board composition and expertise, risk 
management and processes for setting corporate strategy. Some of the 
points made during the discussion, and the actions agreed, were:
•  the divisional and Group self-assessment of internal controls and risk 
management processes should be reviewed more regularly with the 
Board being appraised of any changes in the risk profile; and
•  the scope and detail of the financial information reported to the Board 
should be reviewed regularly.
Executive Directors are appraised annually by the Chief Executive. 
Appraisal reports are reviewed by the Remuneration Committee. The 
Chairman carries out annual appraisals of the Chief Executive and the Non-
executive Directors. The Chairman’s appraisal is carried out by the Non-
Executive Directors, led by the Senior Independent Director. Continuing 
training is provided as and when necessary. Training requirements are also 
identified as part of the annual appraisal process. 
Board Committees
The Board has three principal committees, all with written terms of 
reference which are published on the Company’s website and which are 
available in hard copy form on application to the Company Secretary.
The Audit Committee
The Audit Committee reviews the half-year and annual financial statements 
and matters related to internal controls, including the external audit 
function. The Committee also keeps under review non-audit work carried 
out by the Company’s auditors. The Committee reviews the cost 
effectiveness, independence and objectivity of the external auditors.
The Directors who served on the Audit Committee during the year were  
as follows:
James Wallace (Chairman) 
Robert Ayling (resigned 12 May 2005) 
James Greenbury (appointed 1 January 2005) 
Clive McLintock (retired 31 December 2004) 
Sally Martin 
The Audit Committee Report is set out on page 29.
The Nomination Committee
The Nomination Committee is responsible for recommending candidates 
for Board appointment. 
The Directors who served on the Nomination Committee during the year 
were as follows:
Robert Ayling (Chairman) 
James Greenbury (appointed 1 January 2005) 
Clive McLintock (retired 31 December 2004) 
Sally Martin  
James Wallace 
Richard Atkinson (resigned 16 September 2005)
The Nomination Committee Report is set out on page 29.
The Remuneration Committee
The Remuneration Committee is responsible for ensuring that remuneration 
policy facilitates the attraction, retention and motivation of senior executives 
of appropriate calibre, whilst avoiding unnecessary costs. Details of 
membership of the Committee and its current remuneration policies are 
given in the Directors’ Remuneration Report on pages 31 to 35. 27
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Dialogue with Shareholders
The Directors seek to build on a mutual understanding of objectives 
between the Company and its institutional shareholders and communicate 
with investors and analysts on a regular basis throughout the year as 
required. Results presentations are made on a bi-annual basis to market 
analysts and cover the historic results, current trading and immediate future 
prospects. A series of one-to-one and group meetings are then held with 
institutional shareholders and potential institutional investors covering the 
same material. The primary responsibility for this process lies with the Chief 
Executive and the Finance Director. However, the Chairman and other 
Executive Directors also participate as appropriate. The Company’s 
advisors provide regular feedback from investors and analysts which is 
communicated to the whole Board.
The Code recommends that the Senior Independent Director meets with  
a range of major shareholders to gain an understanding of their views.  
In practice, as a result of the regular feedback provided, the Senior 
Independent Director and the other Non-executive Directors believe that 
they are aware of such issues and that, unless requested by major 
shareholders, such meetings are not required. All shareholders have the 
opportunity to put questions to the Board at the Annual General Meeting 
(AGM) and, at all other times, by e-mailing or writing to the Company. They 
may also contact the Chairman, the Chief Executive or, if more appropriate, 
the Senior Independent Director to raise any issue with one or all of the 
Non-executive Directors of the Company. Notice of the AGM and related 
papers are distributed to shareholders at least 20 working days before  
the meeting. The Company prepares separate resolutions on each 
substantially separate issue. At the AGM, the Chairman reports, after the 
vote on a show of hands, details of all proxy votes lodged for and against 
each resolution and the number of votes withheld.
Directors’ Responsibilities
Company law relating to the United Kingdom requires the Directors to 
prepare financial statements for each financial year which give a true and 
fair view of the state of affairs of the Company and Group as at the end  
of the financial year and of the profit or loss of the Group for that year.  
In preparing the financial statements, the Directors are required to:
•  select suitable accounting policies and then apply them consistently;
•  make judgements and estimates that are reasonable and prudent; and
• state whether applicable accounting standards have been followed.
The Directors are responsible for keeping proper accounting records which 
disclose with reasonable accuracy at any time the financial position of the 
Company and enable them to ensure that the financial statements comply 
with the Companies Act 1985. They are also responsible for the system of 
internal control, safeguarding the assets of the Company and hence for 
taking reasonable steps for the prevention and detection of fraud and  
other irregularities.
Going Concern
After making enquiries, the Directors have a reasonable expectation that 
the Company and the Group have adequate resources to continue in 
operational existence for the foreseeable future. For this reason, they 
continue to adopt the going concern basis.
Board Responsibilities and Planning
All members of the Board take collective responsibility for the Company’s 
performance. A formal schedule of matters reserved for the Board covers 
key areas of the Group’s affairs including the formulation of the Group’s 
corporate strategy, treasury policy and risk management policy, approval of 
acquisitions and disposals, annual Group budget and major capital 
expenditure. Control of operational matters is delegated through the Chief 
Executive, the Finance Director, the respective divisional and subsidiary 
managing directors and local directors as appropriate. This structure ensures 
a strong link between corporate strategy and its effective implementation.
The Board meets regularly to review the affairs and trading progress of  
the various businesses within Holidaybreak plc and the Group as a whole. 
If and when required, meetings in addition to the scheduled meetings are 
held either in person or by telephone conference. Each of the Executive 
Directors reports to the Board on relevant matters relating to their areas  
of responsibility, having previously circulated written or electronic reports  
to all Board members. The attendance records of individual Directors at 
scheduled meetings of the Board and its committees can be found in the 
table below:
Table of attendance for the year ended 30 September 2005
  Scheduled   Remun-
 Board  Audit eration Nomination
 Meetings AGM Committee Committee Committee
Richard Atkinson 12(12) 1(1) N/A N/A 1(6)
Robert Ayling 12(12) 1(1) 2(2) 8(8) 6(6)
Bob Baddeley 12(12) 1(1) N/A N/A N/A
Matthew Cheetham 12(12) 1(1) N/A N/A N/A
Nick Cust 12(12) 1(1) N/A N/A N/A
James Greenbury 9(9) 1(1) 2(2) 6(6) 5(5)
Clive McLintock 3(3) N/A 1(1) 2(2) 1(1)
Sally Martin 12(12) 1(1) 3(3) 8(8) 6(6)
Carl Michel 1(1) N/A N/A N/A N/A
Simon Tobin 12(12) 1(1) N/A N/A N/A
James Wallace 12(12) 1(1) 3(3) 8(8) 6(6)
Mark Wray 12(12) 1(1) N/A N/A N/A
Figures in brackets indicate the maximum number of meetings in the  
period in which the individual was a member of the Board or the relevant 
committee. Richard Atkinson did not attend meetings of the Nomination 
Committee at which the appointment of the new Chief Executive  
was discussed.
The Chairman and the Non-executive Directors have met without the 
Executive Directors being present. The Non-executive Directors have also 
met separately without the Chairman present.
The three trading divisions of the Group, Hotel Breaks, Adventure Travel 
and Camping also hold monthly board meetings to report on and review 
trading progress and discuss future plans. The Chief Executive and the 
Finance Director sit on the divisional boards and attend meetings.
The planning and budgeting cycle enables management at all levels to 
identify and address all significant business risks and to control the 
strategic and financial objectives of the Group. The Board is responsible for 
the formulation of medium term corporate strategy. This in turn provides a 
basis for the formulation and review of divisional strategy by the divisional 
boards. All strategic plans are subject to annual review. Divisional strategic 
plans and annual reviews are presented to and reviewed by the Board and, 
once approved, form the basis of annual budgets.
Detailed reviews of the trading divisions are included within these financial 
statements. The Board uses these, together with the Chairman’s Statement 
and the Financial Review, to present a balanced and understandable 
assessment of the Group’s position and prospects.  28
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Internal Control
The Board of Directors has overall responsibility for ensuring that the 
Company maintains a system of internal financial control to provide  
them with reasonable assurance regarding the reliability of financial 
information used within the business and for publication and that assets  
are safeguarded. 
Subsidiary businesses produce monthly management accounts 
information which is used to compare actual performance with budget and 
medium-term plans. These accounts include updated forecasts and other 
information to enable the Board to assess the prospects of all businesses 
in the Group. The Chief Executive also reports significant changes in the 
external environment to the Board. 
The Group has an established internal organisation structure with clearly 
defined lines of responsibility and accountability. This is supported by  
well established and documented accounting controls and procedures 
common to all individual businesses. There are specific guidelines for  
the appraisal and authorisation of all capital expenditure and disposal 
proposals. Certain of the Group’s key functions including the company 
secretariat, treasury, legal, taxation (compliance and planning) and 
business risk insurance are undertaken centrally under the direct control  
of the Chief Executive and the Finance Director. The Board is updated 
regularly on specific matters including taxation, treasury management, 
interest and foreign exchange exposures. 
There are inherent limitations in any system of internal financial control and 
accordingly even the most effective system can provide only reasonable, 
and not absolute, assurance with respect to the preparation of financial 
information and safeguarding of assets. The Board regularly reviews the 
effectiveness of the systems, control and reporting procedures and will 
continue to do so, making any changes required as a result of the review 
and the development of the Group.
Risk Management
The Board is responsible for the Group’s system of internal control and for 
reviewing its effectiveness. Such a system is designed to manage rather 
than eliminate the risk of failure to achieve business objectives, and can 
only provide reasonable and not absolute assurance against material 
misstatement or loss. It is necessary to take commercial risks in the course 
of the management of the Group’s operations but those risks are fully 
evaluated as part of the decision making process.
The Board confirms that there is an ongoing process for identifying, 
evaluating and managing the significant risks that the Group faces. The 
Board regularly reviews the process, which has been in place from the start 
of the year to the date of approval of this report and which is in accordance 
with the Turnbull Guidance. The Audit Committee assists the Board in 
discharging its review responsibilities.
The Board continuously reviews the effectiveness of the Group’s system  
of internal control. The Board’s monitoring covers all controls, including 
financial, operational and compliance controls and risk management.  
It is based principally on reviewing monthly reports from executive 
management to consider whether significant risks are identified, evaluated, 
managed and controlled and whether any significant weaknesses are 
promptly remedied and indicate a need for more extensive monitoring. The 
Board has considered the need to establish an internal audit resource and 
has concluded that the current control mechanisms are sufficient for the 
size of the Group. The Board will continue to review this decision.
The Board also conducts an annual self-assessment process designed  
to review the effectiveness of all internal controls and risk management 
processes at both subsidiary and Group level. This process is designed  
to highlight key risks to the business and to consider what action should 
reasonably and cost effectively be taken to manage them. 
Compliance with the Combined Code
The Directors consider that throughout the accounting period ended 
30 September 2005, the Company has complied with the Code except  
as follows:
•  A.3.2 At least half the Board, excluding the Chairman, should comprise 
independent Non-executive Directors.
•  D1.1 The Senior Independent Director should meet with a range of major 
shareholders to listen to their views in order to help develop a balanced 
understanding of the issues and concerns of major shareholders.
Explanations for non-compliance are set out above.
Corporate Governance (continued) 29
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Audit Committee Report
The Audit Committee presents a separate report in relation to the financial 
year ended 30 September 2005.
Composition of the Audit Committee
The Committee comprises three Non-executive Directors, all of whom are 
considered by the Board to be independent. Robert Ayling resigned from 
the Committee in May 2005. Details of those who served on the Committee 
during the year are set out on page 26. The Chairman of the Committee, 
James Wallace, is a qualified chartered accountant and formerly a finance 
director of another company listed on the London Stock Exchange. As a 
whole, the Committee has recent and relevant financial expertise and is 
appropriately qualified to undertake its duties in an effective manner.
Operation of the Audit Committee
The Committee met three times during the year. The Chief Executive, the 
Finance Director and, since his resignation from the Committee, the Chairman, 
together with representatives from the external auditors, attend meetings at the 
invitation of the Committee. The Committee has also met the external auditors 
without executive management present. The external auditors may also request 
a meeting if they consider it necessary. The Committee’s duties included:
•  Reviewing the Company’s financial statements and the material financial 
reporting judgements contained in them.
•  Reviewing the Company’s financial risk and internal control processes.
•  Reviewing the external auditors’ terms of engagement and plan for the 
audit of the accounts.
•  Considering the requirement for an internal audit function.
•  Reviewing readiness for the changeover of financial reporting from 
existing UK GAAP to IFRS (more information relating to the changeover 
is given in the Financial Review).
Review of the External Auditors
The Committee has been delegated responsibility for making recommendations 
to the Board on the appointment and removal of the external auditors.
Subject to the annual appointment of the auditors by shareholders, the 
Committee conducts a continuous review of the relationship between the 
Group and the auditors. This review includes:
•  the consideration of audit fees and advance approval of any fees for non-
audit related work in excess of £10,000 for an individual assignment;
•  the consideration of the auditors’ independence and objectivity; and
•  the nature and scope of the external audit.
The Committee, having considered the external auditors’ performance 
during their period in office, recommends re-appointment. A full breakdown 
of the audit and non-audit related fees is set out in note 4 to the financial 
statements on pages 43 and 44. The Committee discussed the level of 
fees and considered them appropriate given the current size of the Group 
and the level of corporate activity undertaken during the year. The 
Committee believes the level and scope of non-audit services does not 
impair the objectivity of the auditors and in respect of due diligence reports 
there is a clear benefit from using professional advisors who have a good 
understanding of the Group’s operations. Other accounting firms have 
been used where the Group recognises them as having particular areas  
of expertise or where there is an independence issue.
Open Door Policy
The Committee reviews the Group’s ‘Open Door’ policy which provides a 
process for employees, in confidence, to raise concerns about possible 
improprieties in matters of financial reporting or other matters.
James Wallace
Chairman of the Audit Committee
1 December 2005
Nomination Committee Report
The Nomination Committee presents a separate report in relation to the 
financial year ended 30 September 2005.
Composition of the Nomination Committee
The Committee is responsible for evaluating the balance of skills, 
knowledge and experience of the Board and, where appropriate, 
recommending candidates for appointment. During the year there have 
been searches for a successor to Richard Atkinson, Chief Executive,  
and a Non-executive Director. Richard Atkinson did not attend any of  
the meetings relating to the appointment of the new Chief Executive. The 
Committee prepared a description of the role and the required attributes for 
each appointment and engaged external consultants to assist in identifying 
external candidates. Where appropriate the Committee also engaged 
psychologists to assist in assessing candidates. The Committee identified 
and proposed candidates for each appointment, with the full Board making 
the final decision. 
The letter of appointment sets out the expected time commitment for Non-
executive Directors. Prior to his appointment, James Greenbury confirmed 
he had sufficient time to complete his responsibilities and details of his 
other commitments are set out on page 23. 
Induction Procedure
The Company Secretary supports the Chairman in ensuring new Directors 
receive appropriate induction and training. On joining the Board, a Director 
undergoes a structured induction programme, including the receipt of a 
comprehensive induction pack which includes various governance related 
issues. The Director meets with each of the Executive Directors and senior 
management. If appropriate, the Director also attends external training 
courses following his or her appointment which is tailored to his or her 
requirements.
Succession Planning
The Board and the Nomination Committee recognise the importance of 
succession planning to ensure that the Group continues to prosper in the 
longer term. Operational matters are delegated through the Chief Executive 
and the Finance Director to the divisional directors with clearly defined lines 
of responsibility and accountability. This provides the opportunity for senior 
management to develop in some of the smaller business units before 
progressing to wider and more responsible roles. The Committee is mindful 
of the need to ensure appropriate succession arrangements are in place for 
the Directors. The Committee seeks to identify new Directors and senior 
managers to ensure succession of Directors is conducted in a managed 
way, without significant disruption to the ongoing business of the Group.
Robert Ayling
Chairman of the Nomination Committee
1 December 2005 30
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Directors’ Report
The Directors present their annual report on the affairs of the Group, 
together with the financial statements and independent auditors’ report for 
the year ended 30 September 2005.
Principal Activities and Business Review
The principal activities of the Group are the provision of hotel short-breaks 
in the UK and continental Europe, worldwide adventure and activity 
holidays and mobile-home and camping holidays on sites throughout 
continental Europe.
Details of the Group’s performance during the year and expected future 
developments are contained in the Chairman’s Statement and the Chief 
Executive’s Review on pages 2 to 6 and in the Financial Review on pages  
8 and 9. A review of activities by each of the divisions is contained on 
pages 10 to 21.
As at the date of this report, there have been no important events affecting 
the business of the Company or of any of its subsidiaries, which have 
occurred since the end of the financial year.
Results and Dividends
The profit after taxation for the year ended 30 September 2005 amounted 
to £11,839,000 (year ended 30 September 2004: £12,377,000). The 
Directors recommend a final dividend of 19.35p (2004: 17.6p) per ordinary 
share which, together with the interim dividend of 7.25p (2004: 6.6p), 
represents a total of 26.6p per ordinary share (2004: 24.2p).
It is proposed that the retained loss of £740,000 (2004 retained profit: 
£899,000) be transferred from reserves.
Directors
The directors of the Company who served during the year were as follows:
Non-executive Directors Executive Directors
Robert Ayling Richard Atkinson
James Greenbury (resigned 16 September 2005)
(appointed 1 January 2005) Bob Baddeley
Clive McLintock Matthew Cheetham
(retired 31 December 2004) Nick Cust
Sally Martin Carl Michel
James Wallace (appointed 5 September 2005)
 Simon Tobin
 Mark Wray
The Directors’ beneficial and non-beneficial interests in the shares of the 
Company as at 30 September 2005 are disclosed on page 56. 
In accordance with the Articles of Association of the Company, Simon 
Tobin, James Wallace and Mark Wray retire by rotation at the 2006 Annual 
General Meeting and, being eligible, offer themselves for re-election.  
Simon Tobin entered into a service agreement with the Company on 
1 January 2001 for an initial period of twelve months with a notice period of 
twelve months thereafter. James Wallace entered into a revised letter of 
appointment on 17 May 2005 which extends his original three year 
appointment from May 2002 by a further fixed three year period which will 
expire on 30 April 2008. The letter also provides for resignation within the 
fixed term subject to three months notice. Mark Wray entered into a service 
agreement with the Company on 26 July 1995 for an initial period of three 
years with a notice period of twelve months thereafter. In addition, Carl 
Michel, who was appointed a Director and Chief Executive on 
5 September 2005, also retires in accordance with the Articles of 
Association and stands for re-election. Carl Michel entered into a service 
agreement with the Company on 3 September 2005 which provides for a 
notice period of twelve months. 
Biographical details of the Directors are given on page 23. Details of 
Directors’ emoluments and share options are given in the Directors’ 
Remuneration Report on pages 31 to 35.
Substantial Shareholdings
Details of interests in the ordinary share capital of the Company which, as 
at 1 December 2005, had been notified to the Company in accordance 
with sections 198 to 208 of the Companies Act 1985 are disclosed on page 
55 of the annual report and financial statements.
Acquisitions by the Company of its Own Shares
Shareholders’ authority for the purchase by the Company of 4,773,200 of 
its own shares existed at the end of the year. The Directors will seek to 
renew this authority at the 2006 Annual General Meeting. 
Policy on Disabled Employees
Applications for employment by disabled persons are always fully 
considered, bearing in mind the aptitudes of the applicant concerned.  
In the event of members of staff becoming disabled, every effort is  
made to ensure that their employment with the Group continues and  
that appropriate training is arranged. It is the policy of the Group that the 
training, career development and promotion of disabled persons should,  
as far as possible, be identical with that of other employees.
Policy on Employee Involvement
The Group places considerable value on the involvement of its employees 
and keeps them informed on matters affecting them as employees and on 
the various factors affecting the performance of the Group. This is achieved 
through formal and informal meetings, regular briefings, the Company 
newsletter and circulation of results announcements and important public 
statements. Employees are consulted regularly on a wide range of matters 
affecting their current and future interests. Within the Adventure Travel and 
Camping Divisions, this is achieved through the election of employee 
representatives who are members of a staff council or forum and meet 
regularly with management. In the case of the Hotel Breaks Division, 
consultation takes place via Heads of Department. Permanent employees 
are, in the majority of cases, entitled to receive bonuses related to individual 
or team performance. All permanent UK employees of the Group are given 
the opportunity to join the Savings Related Share Option Scheme.
Creditor Payment Policy and Number of Days
The Group’s policy is to pay suppliers on terms agreed with each supplier. 
The Company had no trade creditors outstanding as at 30 September 
2005 (2004: same).
Charitable and Political Donations
During the year the Group contributed a total of £86,000 (2004: £29,000) to 
charities. Further details of the Group’s involvement in charities is contained 
on page 25 of the annual report and financial statements. The Company 
did not make any political donations.
Annual General Meeting
The 2006 Annual General Meeting will be held at The Lowry, Pier 8, Salford 
Quays, Manchester M50 3AZ on Tuesday 14 March 2006 at 2.30pm.
A resolution to re-appoint Deloitte & Touche LLP as auditors of the 
Company will be proposed at the meeting. A detailed explanation of the 
special business to be transacted at the meeting is contained in the 
explanatory notes to the Notice of Annual General Meeting which 
accompanies the annual report and financial statements.
By order of the Board
Alexandra Williamson
Company Secretary
1 December 2005
Registered Office: 
Hartford Manor, Greenbank Lane, Northwich, Cheshire CW8 1HW  
Registered in England No: 2305562 31
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
This report has been prepared in accordance with Section 234B 
Companies Act 1985 (as amended). It also contains additional information 
required by the Listing Rules of the Financial Services Authority and other 
relevant information relating to our Group pay and benefits policy.
Membership
Throughout the year, the Remuneration Committee has comprised solely of 
Non-executive Directors of the Company (including the Chairman of the 
Company, Robert Ayling), namely:
Sally Martin 
(Chair with effect from 1 January 2005) 
Clive McLintock 
(Chairman – retired 31 December 2004) 
Robert Ayling 
James Greenbury 
(appointed 1 January 2005) 
James Wallace
Robert Ayling’s continued membership of the Committee is considered 
appropriate given his experience of the sector and the valuable 
independent and objective views he offers. The Committee consults the 
Chief Executive about its proposals relating to the remuneration of 
Executive Directors and has access to professional advice from inside and 
outside the Group. The Committee has retained New Bridge Street 
Consultants LLP, who are independent remuneration consultants 
appointed by the Committee, as its principal adviser and has taken advice 
from them in relation to executive remuneration matters and, in particular, in 
relation to the proposed new Long Term Incentive Plan. New Bridge Street 
has no other relationship with the Group. The Committee’s terms of 
reference are published on the Company’s website and are available in 
hard copy form on application to the Company Secretary.
Remuneration Policy
Executive Director remuneration packages consist of various components:
•  Basic salary
•  Performance linked bonus
•  Pension contributions
•  Long Term Incentive Plan – proposed
•  Company car or allowance
•  Private healthcare insurance
•  Life assurance
•  Permanent health insurance
A review of the remuneration policy is set out below. 
Scope and Objectives 
Attracting, retaining and motivating directors and senior management of 
appropriate calibre and experience is essential to the Company’s future 
success. The Committee’s primary objective is to ensure that remuneration 
policy supports this objective whilst avoiding unwarranted cost. The 
Committee recognises the importance of an appropriate balance between 
the fixed elements of remuneration (i.e. basic salary, benefits and pension) 
and performance related remuneration (i.e. bonus and longer-term 
incentives) of each Director’s remuneration package. As a result, a 
significant proportion of each Director’s total remuneration is comprised  
of performance related elements. At the on-target level of Group 
performance, the proportion of basic salary made up of performance-
related pay accounts for approximately 35% of the total package reflecting 
the Board’s commitment to linking pay to performance, and the alignment 
of Executive Directors’ interests with those of shareholders. 
The Committee, as defined by its terms of reference, is responsible for 
determining the remuneration packages of the Company’s Executive 
Directors and monitoring the level and structure of remuneration for the first 
level of senior management below the Board. The Committee also sets the 
fee level of the Chairman of the Company (with the Chairman absent from 
such discussions). In addition, it has a broader remit that includes Executive 
Director performance, career development and training requirements 
together with stewardship of the Company’s share option schemes.
Basic Salary 
Basic salaries are reviewed annually in November and the Committee  
take into account the performance of the individuals and any changes  
in their responsibilities, along with the expected general increase levels  
for other employees. The Committee takes advice from its independent 
remuneration consultants and also has regard to salaries for similar roles  
in comparable companies. Where appropriate, basic salaries have been 
increased to reflect increased levels of responsibility and to ensure that they 
remain market competitive but the policy adopted by the Committee is that 
basic salaries should not exceed the relevant market median.
Performance Linked Bonus 
The Committee’s view to date is that one year profit linked bonuses, based 
on performance relative to budget, are the most appropriate for the Group 
with longer term performance rewarded through the regular grant of share 
options. Headline earnings per share is considered the most appropriate 
benchmark for Group financial performance and the bonuses of the Chief 
Executive and the Finance Director are linked entirely to this measure. 
Bonuses for the other Executive Directors responsible for the divisions were 
linked both to headline earnings per share and to divisional operating profit, 
with an approximate 25% weighting to the former and 75% to the latter. The 
2005 bonus plan was based entirely on the financial-based performance 
conditions set out above. Bonuses of £211,000 were awarded for the year 
under review. Bonus levels ranged between 5% and 48% of basic salary 
and are set out in the table on page 34. 
Changes to the bonus plan have been made for the year ending  
30 September 2006 as follows. The maximum bonus potential will remain 
at 100% of basic salary overall, but the bonus will be subdivided into two 
parts, with 70–75% of bonus potential based on the same mix of headline 
earnings per share and divisional operating profit, as set out above. The 
balance of bonus potential (up to 30%) will be determined by a range of 
strategic objectives set by the Committee. A sliding scale applies to the 
element of bonus potential linked to financial performance for all Executive 
Directors. Hence, where 70% of bonus potential is linked to financial 
performance, a bonus of 28% of salary will be payable on achievement of 
budget performance, with between 7% and 28% of salary payable on 
achievement of 95% and 100% of budget. No bonus is payable below 95% 
of budget. The maximum bonus of 70% of salary will be payable if budget 
targets are exceeded by 15%. Bonuses are not pensionable.
Directors’ Remuneration Report 32
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Pension Contributions 
The Company operates contributory money purchase pension schemes  
for the benefit of its executives and UK based employees. In all cases, 
basic salary only is pensionable. Executives are able to increase pension 
contributions through salary sacrifice and benefit from a portion of  
the savings in national insurance charges. Pension contributions on  
behalf of Executive Directors are 15% of basic salary, before any salary 
sacrifice element.
Service Agreements
The Company’s policy is that Executive Director service agreements should 
have a maximum notice period of one year. The Committee regards the 
stipulated notice periods for its Executive Directors to be of mutual benefit. 
All current Executive Director contracts are on a ‘rolling’ basis and subject 
to a twelve month notice period. In cases of early termination of contracts,    
subject to legal constraints, the level of compensation will be determined in 
accordance with three principles:
•  Dealing fairly with the individual according to the particular 
circumstances.
•  Taking full account of the departing executive’s obligations to mitigate 
loss (except in the case of the former Chief Executive, Richard Atkinson, 
where there was no provision for mitigation and full contractual benefits 
were payable).
•  The value of compensation on termination should not exceed the value 
of one year’s remuneration package.
Details of the service agreements of those Directors who retire by rotation 
at the 2006 Annual General Meeting are given on page 30. The service 
agreements of Carl Michel, Bob Baddeley, Nick Cust and Matthew 
Cheetham are dated 3 September 2005, 18 January 1996, 26 July 1995 
and 9 January 2004 respectively.
Executive Directors are permitted to accept outside appointments on 
external boards or committees so long as these are not deemed to 
interfere with the business of the Group. In the year ended 30 September 
2005, Nick Cust received £8,923 as a member of the England Marketing 
Advisory Board. Richard Atkinson did not receive any remuneration  
for his membership of the Council of the Association of Independent  
Tour Operators.
Proposed Long Term Incentive Plan
Due to the current Unapproved Option Scheme nearing the end of its ten 
year life, the Committee has considered the most appropriate new long 
term incentive arrangement for senior executives and has concluded  
that share options should be discontinued in favour of a policy of regular 
conditional awards of shares, granted via a new Long Term Incentive Plan 
(2006 LTIP). Subject to shareholder approval, the first awards under the 
2006 LTIP will be in March 2006. Individuals may receive an award of 
conditional free shares with a face value at grant of up to 100% of salary  
in any financial year, vesting after three years from grant, subject to 
achievement of performance conditions and continued employment 
(Conditional Awards). In addition, the 2006 LTIP will have the flexibility to 
allow additional awards (Matching Awards) normally made pro-rata to the 
investment of annual bonus, which will be subject to a maximum annual 
limit of 50% of salary in any financial year. The aggregate value of 
Conditional and Matching Awards will be limited to 125% of basic salary  
in any financial year, subject to an overriding cap of 150% of salary in 
exceptional circumstances such as senior executive recruitment. The 
individual would need to remain with the Company for three years in order 
to receive full entitlement to the deferred shares. For the initial awards, it is 
intended that Conditional Awards will be made over shares worth between 
25% and (for the most senior executives) 50% of salary.
The Committee will determine performance conditions prior to each Award, 
with performance measured over a single period of at least three years with 
no provision to re-test. For the initial Conditional Awards to the most senior 
executives there will be two separate performance conditions, each 
applying to a proportion of an award:
•  The performance condition attached to 70% of the awards will require 
average annual EPS growth of between RPI plus 3% to RPI plus 8% per 
annum over a single three year period for between 30% and 100% of 
this part of the award to vest (i.e. between 21% and 70% of the total 
award).
•  The performance condition attached to 30% of the awards will be based 
on Total Shareholder Return (TSR) performance measured against the 
constituents of the FTSE 250 (excluding investment trusts) over a single 
three-year period for between 30% for median performance increasing 
on a straight line basis to 100% for upper quartile performance of this 
award to vest (i.e. between 9% (for median) and 30% (for upper quartile 
performance) of the total award).
•  Awards will vest on a straight line basis between minimum and maximum 
thresholds.
•  On a change of control, deferred shares would vest on a pro-rata basis 
taking account of the vesting period that had expired and the EPS and 
TSR performance conditions.
The Committee considers that EPS and TSR are the most appropriate 
measures of performance for the initial awards for the following reasons:
•  The EPS target will reward significant and sustained increases in value 
that would be expected to flow through into shareholder value. This will 
also deliver strong line of sight for the executive as it will be 
straightforward to evaluate and communicate.
•  The TSR performance condition will provide a balance to the financial 
performance condition by rewarding relative stock market performance 
and ensure that a share price-based discipline in the package (in the 
absence of options) is retained.
•  The lack of a suitable comparator group is the principal reason for the 
weighting in favour of EPS, although the Committee also considers that 
the emphasis of the incentive should, currently, be a significant 
improvement to the company profitability. The Committee will keep 
under review the appropriate mix between TSR and EPS.
Further details are provided in the circular sent to shareholders.
During the transition to International Financial Reporting Standards, the 
Committee will ensure that a consistent basis is used in the measurement 
of performance conditions for all share-incentive awards.
Directors’ Remuneration Report (continued) 33
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
300
250
200
150
100
50
0
2000 2001 2002 2003 2004 2005
Holidaybreak
FTSE SmallCap
300
250
200
150
100
50
0
2000 2001 2002 2003 2004 2005
Holidaybreak
FTSE Leisure and Hotels Index
Performance Graphs
The graphs below show the Total Shareholder Return attributable to 
Holidaybreak plc shares over the past five financial years compared with 
what the Committee believes to be the most appropriate benchmarks, the 
FTSE SmallCap index and the FTSE Leisure and Hotels index.
This graph shows the value, by 30 September 2005, of £100 invested in 
Holidaybreak plc on 30 September 2000 compared with the value of £100 
invested in the FTSE SmallCap Index. The other points plotted are the 
values at the intervening financial year ends.
This graph shows the value, by 30 September 2005, of £100 invested in 
Holidaybreak plc on 30 September 2000 compared with the value of £100 
invested in the FTSE Leisure and Hotels Index. The other points plotted are 
the values at the intervening financial year ends.
2001 Savings Related Share Option Scheme
The Company operates an Inland Revenue approved scheme whereby UK 
employees are able to enter into a three or five year savings contract with a 
maximum monthly savings amount of £250 and a minimum of £5. On 
maturity of the savings contract, which is linked to an option to purchase 
Holidaybreak shares, the employee is able to exercise the options. There 
are no performance criteria relating to this scheme.
All UK based permanent employees are offered the opportunity to 
participate in this scheme at least once each year with the option price, 
which is 20% below the prevailing market rate, set at the commencement 
of the savings contract. Currently, 249 employees holding a total of 306,739 
options are participating in this and the previous 1991 Scheme. 
Non-executive Directors’ Remuneration
For Non-executive Directors other than the Chairman, fees have been set 
for a fixed three year period. They also receive an additional fixed fee for  
the chairmanship of the Audit or Remuneration Committee. Proposals are 
made to the Board at the end of the fixed period following consultation 
between the Chief Executive and the Chairman which reflects time and 
commitment and responsibilities of the roles. The Chairman’s service 
agreement dated 26 September 2002, which expires on 1 June 2006, 
stipulates a fixed fee that is subject to an annual review in line with the 
change in RPI. The service agreements for the other Non-executive 
Directors, James Greenbury, Sally Martin and James Wallace (dated 16 
December 2004, 14 July 2004 and 17 May 2005 respectively), are also for 
fixed terms, expiring on 31 December 2007, 16 July 2007 and 30 April 
2008 respectively. There is a three month notice period stipulated in the 
case of a Non-executive Director’s resignation and there are no provisions 
for compensation for loss of office for any Non-executive Director. 34
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Audited Information
2005 Remuneration 
Remuneration in respect for the year to 30 September 2005 was as follows:
   Performance Performance  Gain on 
   related related bonus Compensation exercise 
 Salaries/ Taxable bonus (pension  for loss of of share Pension Total Total
 fees benefits (cash) contribution) office options contributions 2005 2004
 £’000 £’000 £’000 £’000 £’000  £’000 £’000 £’000 £’000
Executive: 
Richard Atkinson
(resigned 16 September 2005) 184 19 49 – 284 186 102 824 290
Bob Baddeley 151 13 31 – – 155 21 371 173
Matthew Cheetham  182 – 16 – – – 26 224 178
Jim Crew
(resigned 10 February 2004) – – – – – – – – 434
Nick Cust 127 11 21 – – 99 71 329 314
Carl Michel
(appointed 5 September 2005) 18 – – – – – 2 20 –
Mark Wray 120 12 21 – – 121 77 351 345
Simon Tobin 148 14 73 – – 61 22 318 230
Non-executive: 
Robert Ayling 63 – – – – – – 63 60 
Clive McLintock
(resigned 31 December 2004) 13 – – – – – – 13 30
James Greenbury
(appointed 1 January 2005) 19 – – – – – – 19 nil
Sally Martin  29 – – – – – – 29 3 
James Wallace 30 – – – – – – 30 30 
Total emoluments 1,084 69 211 – 284 622 321 2,591  2,087 
Total 2004 1,040 74 192 149 347 59 226 2,087 
There have been no changes in Directors since the year end.
Pension contributions for seven Directors (2004: seven Directors) were paid to money purchase schemes.
Nick Cust, Mark Wray and Richard Atkinson waived £44,000, £49,000 and £61,000 respectively by way of salary sacrifice (2004: £34,000, £39,000 and £nil) and the Company has 
made additional contributions to the pension scheme in respect of those individuals including a proportion of the national insurance saving.
During the year the highest paid Director received emoluments, excluding pension contributions, of £722,000 (2004: £424,000).
Simon Tobin, Mark Wray and Nick Cust have each been paid a bonus in relation to divisional performance against budget amounting to 45%, 7.5% and 7.5% of their salaries 
respectively. Richard Atkinson and Bob Baddeley both received 20% of their salary by way of bonus in respect of the EPS performance against budget. 
£7,000 of the bonus stated in the table for Matthew Cheetham relates to an under-accrual of bonus for the year ended 30 September 2004. The balance of the bonus amounts 
for Simon Tobin, Mark Wray, Nick Cust and Matthew Cheetham relate to the EPS performance against budget.
The gain on exercise of share options is stated before transaction costs and taxes.
The Company served notice to terminate Richard Atkinson’s contract of employment on 5 September 2005. He resigned as a Director on 16 September 2005 and his 
employment terminates on 31 December 2005. Richard Atkinson receives compensation for loss of office in accordance with his contractual entitlements which included the 
equivalent of 12 months salary, benefits and pension, reduced pro-rata for the period between the date of notice and 31 December 2005. Under his contract there was no 
provision for mitigation and full contractual benefits were payable. Part of the amount disclosed as compensation for loss of office is due for payment in the financial year ended 
30 September 2006. Richard Atkinson will be entitled to exercise 6,615 options under the 2001 Approved CSOP and 69,924 options under the 1996 Unapproved Scheme, 
subject in each case to the satisfaction of the appropriate performance conditions. The remaining options over 172,961 shares will lapse.
Directors’ Share Options
Summary of Options Granted and Exercised During the Year
(all options had an option price below market value as at 30 September 2005)
       Weighted
       average option
   Options Granted Excercised Options price of options
   held at during during held at held at
   30 Sept 04 
(a)
 the year the year 30 Sept 05 
(b)
 30 Sept 05
Richard Atkinson   267,868 39,565 57,933 249,500 468.8p
Bob Baddeley   162,620 26,559 45,269 143,910 468.2p
Matthew Cheetham   37,149 28,261 – 65,410 561.8p
Nick Cust   147,557 27,453 29,342 145,668 481.1p
Carl Michel   nil nil nil nil nil
Simon Tobin   132,285 24,224 20,238 136,271 473.3p
Mark Wray   148,959 30,758 35,267 144,450 485.0p
(a) Carl Michel’s options are stated as at 5 September 2005, the date of his appointment as a Director of the Company.
(b) Richard Atkinson’s options are stated as at 16 September 2005, the date of his resignation as a Director of the Company. 
 
Directors’ Remuneration Report (continued) 35
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
   Exercised Option
   during price of
 Options Granted the year options Options Earliest Latest
 held at during (market price on granted during held at date of date of
 30 Sept 04 the year date of exercise) the year 30 Sept 05* excercise expiry
Richard Atkinson
2001 Company Share Option Plan  6,615  – –  6,615  1 Oct 2006 31 Dec 2006
1996 Unapproved Scheme 253,827  19,934 55,000 614.5p 238,392 1 Oct 2005 5 Jun 2015
B Options  19,631  (621.0p) 624.0p
1997 Long Term Incentive Plan  2,933 – 2,933  –
   (601.0p)
2001 Sharesave Scheme 4,493 – –  4,493 1 Oct 2006 1 Feb 2009
Bob Baddeley
2001 Company Share Option Plan 5,194 – –  5,194  1 Oct 2007 4 Dec 2012
1996 Unapproved Scheme 10,000  – 10,000  –
A Options   (621.0p)   
1996 Unapproved Scheme 140,186 12,408 33,333 614.5p 131,480 1 Oct 2005 5 Jun 2015
B Options  12,219 (621.0p) 624.0p   
1997 Long Term Incentive Plan 1,936 – 1,936  –
   (601.0p)
1991 Sharesave Scheme 6,157 – 3,479  2,678  1 Sep 2005 1 Mar 2006
   (603.0p)
2001 Sharesave Scheme 2,626 1,932 – 500.0p 4,558 1 Oct 2006 1 Mar 2011
Matthew Cheetham
2001 Company Share Option Plan 5,328 – –  5,328 1 Oct 2009 25 Feb 2014
1996 Unapproved Scheme 27,713 14,239 – 614.5p 55,974 1 Oct 2009 5 Jun 2015
B Options  14,022  624.0p
2001 Sharesave Scheme 4,108 – –  4,108 1 Sep 2009 1 Mar 2010
Nick Cust
2001 Company Share Option Plan  6,615  – –   6,615  1 Oct 2006 15 Jan 2012
1996 Unapproved Scheme 135,648 13,832 28,571 614.5p 134,530 1 Oct 2005 5 Jun 2015
B Options  13,621 (647.0p) 624.0p
1997 Long Term Incentive Plan  771  – 771  –
   (601.0p)  
2001 Sharesave Scheme  4,523  – –   4,523  1 Oct 2006 1 Feb 2008
Simon Tobin
2001 Company Share Option Plan  6,615  – –   6,615  1 Oct 2006 15 Jan 2012
1996 Unapproved Scheme 125,670 12,205 20,238 614.5p 129,656 1 Oct 2005 5 Jun 2015
B Options  12,019 (614.5p) 624.0p
Mark Wray
2001 Company Share Option Plan 5,194 – –  5,194  1 Oct 2007 4 Dec 2012
1996 Unapproved Scheme 137,069 13,832 28,571 614.5p 135,951 1 Oct 2005 5 Jun 2015
B Options  13,621 (647.0p) 624.0p
1991 Sharesave Scheme  6,696  – 6,696  –
   (647.0p)
2001 Sharesave Scheme – 3,305 – 500.0p 3,305 1 Sep 2010 1 Mar 2011
* Richard Atkinson’s options are stated as at 16 September 2005
(i) Unapproved ‘B’ options granted after 27 December 2000 and options granted under the 2001 Company Share Option Plan may be exercised provided growth in EPS  
over a fixed five-year period beginning from the commencement of the financial year in which the grant took place is at least 15% above growth in RPI over that period.
(ii) Unapproved ‘B’ options granted on or before 27 December 2000 may be exercised provided growth in EPS over a fixed five-year period beginning from the commencement 
of the financial year in which the grant took place is at least 10% above growth in RPI over that period.
(iii) Unapproved ‘A’ options may be exercised provided growth in EPS over any three consecutive financial years beginning no earlier than the commencement of the financial 
year in which the grant took place is at least 6% above growth in RPI over that period.
(iv) The Remuneration Committee has determined that Richard Atkinson is a good leaver for the purposes of the 2001 Approved CSOP rules. Subject to the performance 
conditions being achieved, all of his 6,615 options may be exercised at any time within 12 months after termination of his employment. He will also be entitled to exercise 
69,924 options under the 1996 Unapproved Scheme prior to termination of employment on 31 December 2005 and subject to the satisfaction of the appropriate 
performance conditions. The remaining options over 172,961 shares will lapse.
(v) No options lapsed during the year. The Company’s Register of Directors’ Interests, which is open to inspection, contains full details of the Directors’ shareholdings and options.
(vi) Aggregate gains made by the Directors on the exercise of options in the year were £622,000 (2004: £59,000).
(vii) The market price on 30 September 2005 was 676.00p per share and the range during the year was 518.00p to 693.00p per share.
On behalf of the Board
Sally Martin
Chair of Remuneration Committee
1 December 2005 36
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Independent auditors’ report to the members of Holidaybreak plc
We have audited the financial statements of Holidaybreak plc for the year 
ended 30 September 2005 which comprise the consolidated profit and 
loss account, the consolidated statement of total recognised gains and 
losses, the reconciliation of movements in Group shareholders’ funds, the 
balance sheets, the consolidated cash flow statement, the statement of 
accounting policies and the related notes 1 to 22. These financial 
statements have been prepared under the accounting policies set out 
therein. We have also audited the information in the part of the Directors’ 
Remuneration Report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in 
accordance with section 235 of the Companies Act 1985. 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 an auditors’ report 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.
Respective responsibilities of Directors and auditors
As described in the statement of directors’ responsibilities, the  
Company’s Directors are responsible for the preparation of the financial 
statements in accordance with applicable United Kingdom law and 
accounting standards. They are also responsible for the preparation  
of the other information contained in the annual report including the 
Directors’ Remuneration Report. Our responsibility is to audit the  
financial statements and the part of the Directors’ Remuneration Report 
described as having been audited in accordance with relevant United 
Kingdom legal and regulatory requirements and auditing standards.
We report to you our opinion as to whether the financial statements give  
a true and fair view and whether the financial statements and the part of  
the Directors’ Remuneration Report described as having been audited 
have been properly prepared in accordance with the Companies Act  
1985. We also report to you if, in our opinion, the Directors’ Report is not 
consistent with the financial statements, if the Company has not kept 
proper accounting records, if we have not received all the information  
and explanations we require for our audit, or if information specified by  
law regarding Directors’ remuneration and transactions with the Company 
and other members of the Group is not disclosed.
We also report to you if, in our opinion, the Company has not complied with 
any of the four directors’ remuneration disclosure requirements specified 
for our review by the Listing Rules of the Financial Services Authority. These 
comprise the amount of each element in the remuneration package and 
information on share options, details of long term incentive schemes, and 
money purchase and defined benefit schemes. We give a statement, to the 
extent possible, of details of any non-compliance.
We review whether the corporate governance statement reflects the 
Company’s compliance with the nine provisions of the July 2003 FRC 
Combined Code, specified for our review by the Listing Rules of the 
Financial Services Authority, and we report if it does not. We are not 
required to consider whether the board’s statements on internal control 
cover all risks and controls, or form an opinion on the effectiveness of the 
Group’s corporate governance procedures or its risk and control 
procedures.
We read the Directors’ Report and the other information contained in the 
annual report for the above year as described in the contents section 
including the unaudited part of the Directors’ Remuneration Report and 
consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the financial 
statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing 
standards issued by the Auditing Practices Board. An audit includes 
examination, on a test basis, of evidence relevant to the amounts and 
disclosures in the financial statements and the part of the Directors’ 
Remuneration Report described as having been audited. It also includes  
an assessment of the significant estimates and judgements made by the 
Directors in the preparation of the financial statements and of whether the 
accounting policies are appropriate to the circumstances of the Company 
and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information  
and explanations which we considered necessary in order to provide us 
with sufficient evidence to give reasonable assurance that the financial 
statements and the part of the Directors’ Remuneration Report described 
as having been audited are free from material misstatement, whether 
caused by fraud or other irregularity or error. In forming our opinion, we also 
evaluated the overall adequacy of the presentation of information in the 
financial statements and the part of the Directors’ Remuneration Report 
described as having been audited.
Opinion
In our opinion: 
•  the Financial Statements give a true and fair view of the state of affairs of 
the Company and the Group as at 30 September 2005 and of the profit 
of the Group for the year then ended; and
•  the financial statements and part of the Directors’ Remuneration Report 
described as having been audited have been properly prepared in 
accordance with the Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Manchester
1 December 2005
Independent Auditors’ Report 37
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
    2005 2005 2005 2004
    £’000 £’000 £’000 £’000
      Total
    Existing  continuing
   Notes  operations Acquisitions operations
Turnover   1 277,949 25,034 302,983 281,557
Cost of sales   (208,968) (14,226) (223,194) (209,216)
Gross profit    68,981 10,808 79,789 72,341
Operating expenses    (48,545) (8,049) (56,594) (51,617)
 Operating profit before goodwill amortisation and impairment and exceptional costs 1 31,605 4,209 35,814 31,380
 Goodwill amortisation   9 (2,431) (1,450) (3,881) (2,735)
 Goodwill impairment   9 (8,738) – (8,738) (5,276)
 Exceptional costs  4 – – – (2,645)
Operating profit    20,436 2,759 23,195 20,724
Profit on sale of tangible fixed assets     579 –
Profit on ordinary activities before interest      23,774 20,724
Interest receivable   2   1,237 1,097
Interest payable and similar charges  3   (5,611) (4,430)
Profit on ordinary activities before taxation   1,4   19,400 17,391
Tax on profit on ordinary activities  6   (7,561) (5,014)
Profit on ordinary activities after taxation      11,839 12,377
Dividends paid and proposed  7   (12,579) (11,478)
Retained (loss) profit for the year   19   (740) 899
Earnings per ordinary share   8
Headline earnings per ordinary share      48.8p 44.0p
Basic earnings per ordinary share      25.1p 26.5p
Diluted headline earnings per ordinary share      48.5p 43.7p
Diluted basic earnings per ordinary share      24.9p 26.3p
The accompanying notes are an integral part of this consolidated profit and loss account.
Consolidated Profit and Loss Account
Year ended 30 September 2005 38
Holidaybreak plc
Annual Report and 
Financial Statements 2005
      2005 2004
      £’000 £’000
Profit for the financial year      11,839 12,377
Gain on foreign currency translation     195 108
Total gains and losses recognised relating to the year     12,034 12,485
Consolidated Statement of T otal  
Recognised Gains and Losses
Year ended 30 September 2005
      2005 2004
      £’000 £’000
Profit for the financial year      11,839 12,377
Dividends paid and proposed     (12,579) (11,478)
      (740) 899
New share capital subscribed      2,487 1,005
Movement in owned shares      (66) (738)
Exchange differences     195 108
Net addition to shareholders’ funds      1,876 1,274
Opening equity shareholders’ funds      36,496 35,222
Closing equity shareholders’ funds       38,372 36,496
Reconciliation of Movements in Group 
Shareholders’ Funds
Year ended 30 September 2005 39
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
 Group Company
    2005 2004 2005 2004
   Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible assets   9 62,280 36,227 – –
Tangible assets   10 62,904 70,559 49 65
Investments  11 15 15  265,145 248,682
   125,199 106,801 265,194 248,747
Current assets
Assets held for disposal   12 3,283 3,526 – –
Debtors   13 23,737 20,833 8,649 48,215
Cash at bank and in hand   50,375 31,363 1,524 46
   77,395 55,722 10,173 48,261
Creditors: amounts falling due within one year  14 (146,562) (90,769) (189,210) (201,879)
Net current liabilities   (69,167) (35,047) (179,037) (153,618)
Total assets less current liabilities    56,032 71,754 86,157 95,129
Creditors: amounts falling due after more than one year  15 (11,588) (29,136) – (11,698)
Provisions for liabilities and charges  17 (6,072) (6,122) (718) (755)
Net assets   38,372 36,496 85,439 82,676
Capital and reserves
Called up share capital   18 2,416 2,381 2,416 2,381
Share premium account   19 36,879 34,427 36,879 34,427
Other reserves   19 (3,775) (3,709) 36,982 37,048
Profit and loss account  19 2,852 3,397 9,162 8,820
Equity shareholders’ funds    38,372 36,496 85,439 82,676
The financial statements were approved by the Board of Directors on 1 December 2005
Signed on behalf of the Board
Carl Michel
Director
The accompanying notes are an integral part of these balance sheets. 
Balance Sheets
30 September 2005 40
Holidaybreak plc
Annual Report and 
Financial Statements 2005
 2005 2004
   Notes £’000 £’000 £’000 £’000
Net cash inflow from operating activities   20  51,986  46,274
Returns on investments and servicing of finance
Interest and other investment income received    1,369  1,334 
Interest paid    (4,610)  (4,264) 
Interest element of hire purchase payments   (1,142)  (1,103)
     (4,383)  (4,033)
Taxation
UK corporation tax paid    (5,043)  (6,580) 
Overseas tax paid   (1,980)  (961)
     (7,023)  (7,541)
Capital expenditure
Purchase of own shares    (66)  (738) 
Payments to acquire tangible fixed assets    (8,589)  (11,040) 
Receipts from sale of tangible fixed assets (includes assets held for disposal)  6,178  4,300 
     (2,477)  (7,478)
Acquisitions and disposals
Purchase of businesses and subsidiary undertakings (net of cash acquired)   (39,030)  –
Equity dividends paid    (11,727)  (10,674)
Cash (outflow) inflow before financing     (12,654)  16,548
Financing 
Issue of ordinary share capital    2,295  1,005 
New loans   21 44,830  – 
Repayment of borrowings    21 (12,495)  (11,862) 
Capital element of hire purchase payments  21 (7,156)  (7,767)
    27,474  (18,624)
Increase (decrease) in cash in the year   21  14,820  (2,076)
The accompanying notes are an integral part of this consolidated cash flow statement.
Consolidated Cash Flow Statement
Year ended 30 September 2005 41
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
The principal Group accounting policies, all of which have been applied 
consistently throughout the current year and the preceding year, are set  
out below.
Basis of accounting
The financial statements are prepared under the historical cost convention 
and in accordance with applicable United Kingdom accounting standards.
Basis of consolidation
The Group consolidated financial statements consolidate those  
of Holidaybreak plc and its subsidiary undertakings for the year to  
30 September 2005. The results of subsidiary undertakings acquired  
or disposed of are consolidated for the periods from or to the date  
on which control passed. Acquisitions are accounted for under the 
acquisition method.
No profit and loss account is presented for Holidaybreak plc, as permitted 
by Section 230 of the Companies Act 1985. The Company’s profit after tax 
for the year, determined in accordance with the Act, was £12,992,000 
(2004: £12,582,000).
Intangible assets – goodwill
Goodwill arising on the acquisition of subsidiary undertakings and 
businesses, representing any excess of the fair value of the consideration 
given over the fair value of the identifiable assets and liabilities acquired, is 
capitalised and written off on a straight-line basis over its useful economic 
life, which is assumed to be in a range between 5 and 20 years. It is 
reviewed for impairment if events or changes in circumstances indicate that 
the carrying value may not be recoverable.
Goodwill arising on acquisitions prior to 1 October 1999 was written off to 
reserves in accordance with the accounting standard then in force. As 
permitted by FRS10, the goodwill previously written off to reserves has not 
been reinstated in the balance sheet. On disposal of a previously acquired 
business, the attributable amount of goodwill previously written off to 
reserves is included in determining the profit or loss on disposal.
Tangible fixed assets
All tangible fixed assets are shown at cost, net of depreciation and any 
provision for impairment. Depreciation is provided using the straight-line 
method at rates calculated to write off the cost, less estimated residual 
value, of each asset over its expected useful economic life, as follows:
Freehold land and buildings 50 years 
Short leasehold improvements Term of lease 
Camping equipment 2–5 years 
Mobile-homes 5–7 years 
Office equipment and motor vehicles 3–5 years
No depreciation on camping equipment and mobile homes is charged in 
the first half of the financial year, a full year’s depreciation being charged  
in the second half of the financial year. 
Statement of Accounting Policies
Year ended 30 September 2005
Assets held for disposal
Mobile-homes held for disposal are stated at the lower of cost and net 
realisable value.
Investments
In the Company’s balance sheet, investments in subsidiary undertakings 
are stated at cost less any provision for impairment. Only dividends 
received and receivable are credited to the Company’s profit and  
loss account.
Own shares
The financial statements reflect the adoption of UITF 38 ‘Accounting for 
ESOP trusts’.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at 
amounts expected to be paid (or recovered) using the tax rates and laws 
that have been enacted or substantially enacted by the balance sheet date.
Deferred tax is provided in full on timing differences which result in an 
obligation at the balance sheet date to pay more tax, at a future date at 
rates expected to apply when these timing differences crystallise based on 
current tax rates and law. Timing differences arise from the inclusion of 
items of income and expenditure in taxation computations in periods 
different from those in which they are included in financial statements.
Deferred tax is recognised in respect of the retained earnings of overseas 
subsidiaries only to the extent that, at the balance sheet date, dividends 
have been accrued as receivable or a binding agreement to distribute past 
earnings in future has been entered into by the subsidiary.
Deferred tax is measured at the average tax rates that are expected to 
apply in the periods in which the timing differences are expected to reverse, 
based on tax rates and laws that have been enacted or substantially 
enacted by the balance sheet date. Deferred tax is measured on a non-
discounted basis. 
Foreign currency
Transactions denominated in foreign currencies are recorded in the local 
currency at actual exchange rates which are largely based on forward 
exchange contracts.
Monetary assets and liabilities denominated in foreign currencies at the 
period end are reported at the rates of exchange prevailing at the period 
end or, where appropriate, at the rate of exchange in a related forward 
exchange contract. Any gain or loss arising from a change in exchange 
rates subsequent to the date of the transaction is included as an exchange 
gain or loss in the profit and loss account.
The results of overseas operations are translated at the average rates of 
exchange during the period and their balance sheets at the rates ruling at 
the balance sheet date. Exchange differences arising on translation of the 
opening net assets and results of overseas operations and on foreign 
currency borrowings, to the extent that they hedge the Group’s investment 
in such operations, are dealt with through reserves. 42
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Statement of Accounting Policies (continued)
Year ended 30 September 2005
Finance costs and debts
Finance costs of debts are recognised in the profit and loss account over 
the term of such instruments at a constant rate on the carrying amount. 
Debt is initially stated at the amount of the net proceeds after deduction  
of issue costs. The carrying amount is increased by the finance cost in 
respect of the accounting period and reduced by payments made in  
the period.
Hire purchase agreements
Assets acquired under hire purchase agreements are initially reported  
at the fair value of the asset with an equivalent liability categorised as 
appropriate under creditors due within or after one year. The asset is 
depreciated over its useful economic life in accordance with the Group’s 
depreciation policies noted above. Finance charges are allocated to 
accounting periods over the period of the agreement to produce a constant 
rate of return on the outstanding balance. Rentals are apportioned between 
finance charges and reduction of the liability. Rentals under operating 
leases are charged on a straight-line basis over the lease term.
Pension costs
The Group provides pensions to Directors and senior employees through 
defined contribution pension schemes. The assets of the schemes are  
held independently of the Group by an insurance company. The amount 
charged to the profit and loss account is the contributions payable in  
the year. 
Income recognition
Turnover represents the aggregated amount of gross revenue receivable 
excluding VAT and similar taxes, from the sale of tours, holidays and other 
travel services supplied to customers in the ordinary course of business.
Revenue and expenses directly relating to holidays are taken to the profit 
and loss account on holiday departure. Certain expenses such as the cost 
of brochure production and promotional material are charged to the profit 
and loss account over the season to which they relate to the extent that 
these costs are reasonably assured. Revenue arising from the sale of 
insurance policies provided by third parties is taken to the profit and loss 
account on holiday departure.
Derivatives and other financial instruments
Details of all derivatives and other financial instruments are shown in note 
16 to the financial statements. 43
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
1 Segment information
      2005 2004
Group turnover by geographical origin was as follows:      £’000 £’000
United Kingdom       230,996 230,036
Ireland      7,394 8,582
Netherlands and Belgium      46,216 22,245
Germany, Switzerland and Austria      12,524 15,586
Others     5,853 5,108
      302,983 281,557
Group turnover and operating profit before goodwill amortisation and impairment and exceptional operating costs and profit before taxation by class of 
business was as follows:
  Operating profit before goodwill 
  amortisation and impairment
 Turnover and exceptional costs Profit before taxation
  2005 2004 2005 2004 2005 2004
  £’000 £’000 £’000 £’000 £’000 £’000
Hotel Breaks  126,659 120,895 17,680 14,487 16,486 14,129
Adventure Travel  62,581 37,417 5,138 3,160 2,955 1,590
Camping  113,743 123,245 12,996 13,733 3,754 5,005
  302,983 281,557 35,814 31,380 23,195 20,724
Profit on sale of tangible fixed assets      579 –
Profit before interest      23,774 20,724
 
Interest receivable      1,237 1,097
Interest payable and similar charges     (5,611) (4,430)
Profit before taxation      19,400 17,391
Analyses of operating profit by geographical area and net assets by geographical area and class of business have not been disclosed as the Directors 
believe that publication of such information would be seriously prejudicial to the interests of the Group.
2 Interest receivable
      2005 2004
      £’000 £’000
Bank interest receivable      1,237 1,097
3 Interest payable and similar charges 
      2005 2004
      £’000 £’000
Bank loans and overdrafts       3,950 3,353
Refinancing costs for acquisitions      542 –
Hire purchase contracts     1,119 1,077
      5,611 4,430
4 Profit on ordinary activities before taxation
      2005 2004
Profit on ordinary activities before taxation is stated after charging:     £’000 £’000
Depreciation and amounts written off tangible fixed assets 
– owned assets      10,626 11,187
– held under hire purchase contracts      3,024 3,946
Goodwill amortisation      3,881 2,735
Goodwill impairment      8,738 5,276
Hire of plant and machinery under operating leases      477 289
Other operating lease rentals      687 498
Auditors’ remuneration
– audit      196 148
– non-audit      304 184
Staff costs (see note 5)      27,569 26,356
Notes to the Financial Statements
Year ended 30 September 2005 44
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Notes to the Financial Statements (continued)
Year ended 30 September 2005
4 Profit on ordinary activities before taxation (continued)
      2005 2004
Exceptional costs charged within operating profit were as follows:     £’000 £’000
Costs relating to the closure of Keycamp’s head office and the reorganisation 
 of Camping Division’s UK and European executive and marketing functions    – 2,645
      – 2,645
      2005 2004
Auditors’ remuneration in respect of non-audit work was as follows:     £’000 £’000
Corporate tax compliance      141 92
Tax advice in respect of the internal restructuring of the Group’s operations    132 74
Due diligence services*      135 –
VAT advice in respect of overseas activities      31 18
      439 184
* The costs incurred for due diligence services have been capitalised within cost of investment, as shown within note 9 to the financial statements.
5 Staff costs
Particulars of employees (including Executive Directors) are as shown below:
      2005 2004
Employee costs during the year amounted to:      £’000 £’000
Wages and salaries      24,511 23,540
Social security costs      2,128 1,908
Pension costs (note 22)     930 908
      27,569 26,356
      2005 2004
      Number Number
The average monthly number of persons employed by the Group during the year was as follows:   employed employed
Management and administration      972 931
Couriers     750 886
      1,722 1,817
The Group operates an Inland Revenue approved employee SAYE share option scheme and has taken advantage of the exemption given in UITF Abstract 
17 ‘Employee Share Schemes’ from recognising a charge in the profit and loss account for the discount on the options. 
Directors’ remuneration is disclosed, including pensions and share options, within the Directors’ Remuneration Report on pages 34 and 35.
6 Tax on profit on ordinary activities
      2005 2004
The tax charge comprises:      £’000 £’000
UK corporation tax 
– charge for the year      5,306 3,860
– adjustment in respect of prior years      – (971)
Foreign taxation
– charge for the year      1,982 624
– adjustment in respect of prior years     323 –
Total current tax      7,611 3,513
Deferred taxation (see note 17) 
– origination and reversal of timing differences      153 1,061
– adjustment in respect of prior years     (203) 440
      7,561 5,014 45
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
6 Tax on profit on ordinary activities (continued)
The difference between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax is as follows:
      2005 2004
      £’000 £’000
Group profit on ordinary activities before tax      19,400 17,391
Tax on Group profit on ordinary activities at standard UK corporation tax rate of 30% (2004: 30%)   5,820 5,217
Effects of: 
Capital allowances in excess of depreciation      (97) (648)
Other timing differences      (312) (344)
Non-deductible goodwill      2,330 580
Tax rate differences on overseas profits      (214) 94
Other permanent differences      (650) (415)
Adjustment in respect of prior years      323 (971)
Overseas dividends eliminated on consolidation     411 –
Current tax charge for the year      7,611 3,513
7 Dividends paid and proposed on equity shares
      2005 2004
      £’000 £’000
(Over) under provision in respect of prior year final dividend     (27) 27
Interim dividend paid of 7.25p per ordinary share (2004: 6.6p)     3,444 3,140
Final dividend proposed of 19.35p per ordinary share (2004: 17.6p)     9,233 8,381
Dividends paid and proposed in respect of investment in own shares     (71) (70)
      12,579 11,478
8 Earnings per ordinary share 
Earnings per ordinary share is calculated as follows:
   2005   2004 
   Weighted   Weighted 
   average Per share  average Per share
  Earnings number of amount Earnings number of amount
  £’000 shares pence £’000 shares pence
Basic earnings per share  11,839 47,186,130 25.1 12,377 46,743,795 26.5
Goodwill amortisation and impairment  12,619  26.8 8,011  17.1
Exceptional operating costs  –  – 2,645  5.7
Tax effect of the above items (1,454)  (3.1) (2,465)  (5.3)
Headline earnings per share  23,004 47,186,130 48.8 20,568 46,743,795 44.0
Basic weighted average number of shares   47,186,130   46,743,795 
Dilutive effect of share options  301,197   330,200 
Diluted weighted average number of shares   47,487,327   47,073,995 
Diluted basic earnings per share  11,839 47,487,327 24.9 12,377 47,073,995 26.3
Diluted headline earnings per share  23,004 47,487,327 48.5 20,568 47,073,995 43.7
The Directors consider that headline earnings per share provides a better understanding of the Group’s earnings following the change in the accounting 
treatment of goodwill in 2000 and the occurrence of exceptional operating costs in 2004. 46
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Notes to the Financial Statements (continued)
Year ended 30 September 2005
9 Intangible fixed assets – goodwill
       Group
       £’000
Cost 
As at 1 October 2004        53,276
Additions       38,672
As at 30 September 2005      91,948
Amortisation  
As at 1 October 2004       17,049
Impairment       8,738
Charge for the year      3,881
As at 30 September 2005      29,668
Net book value 
As at 30 September 2005       62,280
As at 30 September 2004       36,227
Acquisitions
On 21 December 2004, the Group acquired 100% of the issued share capital of Business Reservation Centre Holland Holding BV (BRC) for cash 
consideration of £22.8 million. BRC is an online intermediary for short-stay leisure hotel breaks in the Netherlands. This transaction has been accounted for 
by the acquisition method of accounting.
       Book and 
       provisional
       fair value
       £’000
Net assets acquired:
Tangible fixed assets       538
Trade and other receivables       1,464
Cash and cash equivalents       548
Trade and other payables       (1,252)
Tax liabilities      (473)
       825
Goodwill      22,320
Total consideration      23,145
Satisfied by:
Cash consideration       22,786
Costs of acquisition – paid      359
       23,145
Net cash outflow arising on acquisition: 
Cash consideration and costs of acquisition       (23,145)
Cash and equivalents acquired      548
       (22,597)
In the period 1 January 2004 to 21 December 2004, BRC earned a profit after taxation of £691,000 and in the year ended 31 December 2003, BRC earned 
a profit after taxation of £868,000. 47
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
9 Intangible fixed assets – goodwill (continued)
On 19 January 2005, the Group acquired 100% of the issued share capital of Djoser BV for cash consideration of £16.0 million. Djoser BV is a ‘soft 
adventure’ holiday operator in the Netherlands. This transaction has been accounted for by the acquisition method of accounting.
       Book and 
       provisional 
       fair value
       £’000
Net assets acquired: 
Tangible fixed assets        300
Trade and other receivables       4,805
Cash and cash equivalents       8
Trade and other payables       (4,938)
Tax liabilities      (64)
       111
Goodwill      16,352
Total consideration      16,463
Cash consideration       15,951
Costs of acquisition – paid       490
 – accrued       22
      16,463
Satisfied by:
Cash consideration and costs of acquisition       16,441
Costs of acquisition – accrued      22
      16,463
Net cash outflow arising on acquisition: 
Cash consideration and costs of acquisition       (16,441)
Cash and equivalents acquired      8
       (16,433)
In the year ended 31 December 2004, Djoser BV earned a profit after taxation of £1,157,000. No material trading occurred between the beginning of their 
financial year (1 January 2005) and the date of acquisition (19 January 2005).
Impairment review
During the year ended 30 September 2005, an impairment review has been performed in respect of the goodwill which arose on the acquisition of the 
Eurosites business. An impairment loss of £8,738,000 has been charged to operating profit. The impairment loss has been measured by reference to value 
in use of an income generating unit utilising a discount rate of 7.5%.
10 Tangible fixed assets
      Office 
  Freehold Short   equipment 
  land and leasehold Camping Mobile and motor 
  buildings improvements equipment homes vehicles Total
Group  £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 October 2004  5,618 879 13,726 82,644 6,971 109,838
Additions  3,624 5 2,306 4,307 1,595 11,837
Acquisitions of subsidiaries  – 9 – – 829 838
Transfer to current assets  – – – (9,842) – (9,842)
Disposals (2,618) (680) (6,739) (1,234) (1,919) (13,190)
At 30 September 2005 6,624 213 9,293 75,875 7,476 99,481
Depreciation 
At 1 October 2004  683 574 7,831 25,984 4,207 39,279
Charge for the year  93 41 3,506 8,388 1,622 13,650
Transfer to current assets  – – – (6,559) – (6,559)
Disposals (361) (506) (6,752) (521) (1,653) (9,793)
At 30 September 2005 415 109 4,585 27,292 4,176 36,577
Net book value 
At 30 September 2005  6,209 104 4,708 48,583 3,300 62,904
At 30 September 2004  4,935 305 5,895 56,660 2,764 70,559
Included within mobile-homes are assets under hire purchase contracts with a net book value of £23,083,200 (2004: £31,740,500). 48
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Notes to the Financial Statements (continued)
Year ended 30 September 2005
10 Tangible fixed assets (continued)
       Office
       equipment 
       and motor
       vehicles
Company       £’000
Cost 
At 1 October 2004       118
Additions       9
Disposals      (17)
At 30 September 2005      110
Depreciation 
At 1 October 2004       53
Charge for the year       25
Disposals      (17)
At 30 September 2005       61
Net book value 
At 30 September 2005       49
At 30 September 2004        65
11 Fixed asset investments
 Group Company
    2005 2004 2005 2004
    £’000 £’000 £’000 £‘000
Subsidiary undertakings    – – 265,145 248,682
Other investments   15 15 – –
    15 15 265,145 248,682
       Company
       £’000
Cost and net book value 
At 1 October 2004       248,682
Acquisition of subsidiary undertakings       39,608
Transfer of investments to subsidiary undertakings      (23,145)
At 30 September 2005       265,145
Principal Group investments
The Company and the Group have investments in the following subsidiary undertakings which principally affected the profits and net assets of the Group. 
To avoid a statement of excessive length, details of investments which are not significant have been omitted.
All of the subsidiary undertakings have been consolidated in the Group financial statements. 49
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
11 Fixed asset investments (continued)
The principal subsidiary undertakings of Holidaybreak plc are as follows:
      Proportion of Proportion of
     Country of share capital share capital
     incorporation held by the held by the
     and operation Company (%) Group (%)
Camping operators: 
Greenbank Holidays Limited      England 100 
Easycamp BV     Netherlands  100
Hotel Breaks operators: 
Superbreak Mini-Holidays Limited     England  100
Business Reservations Centre Holland BV     Netherlands  100
Bookit BV     Netherlands  100
BV Weekendjeweg.nl     Netherlands  100
Adventure Travel operators: 
Explore Worldwide Limited     England 100 
Explore Aviation Limited     England  100
Regal Diving & Tours Limited     England 100 
Djoser BV     Netherlands 100 
Holding and other companies: 
Business Reservations Centre Holland Holding BV     Netherlands  100
Eurocamp Travel GmbH     Germany  100
Eurocamp Travel (Schweiz) AG     Switzerland  100
Camping in Comfort BV     Netherlands  100
Keycamp Holidays Netherlands BV     Netherlands  100
Keycamp Holidays (Ireland) Limited     Ireland  100
Eurosites A/S     Denmark  100
Superbreak Mini Holidays Group Limited     England 100 
Eurocamp Travel B.V     Netherlands  100
Camping Division Limited     England 100 
Holidaybreak Air Travel Limited     England 100 
Holidaybreak Trustee Limited     England 100 
Holidaybreak Holding Company Limited     Isle of Man 100 
Holidaybreak Insurance Company Limited      Isle of Man  100
Sites Services SARL     France 100 
Greenbank Packages Limited     England 100 
Greenbank Services Limited     England 100 
Other investments
       Group
       £’000
Cost 
At 1 October 2004 and 30 September 2005      615
Provisions for impairment 
At 1 October 2004 and 30 September 2005      600
Net book value 
At 30 September 2004 and 30 September 2005       15
Other investments (cost of £600,000) are redeemable preference shares in the former printing business of Baldwin Limited. Full provision is retained against 
this investment.  50
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Notes to the Financial Statements (continued)
Year ended 30 September 2005
12 Assets held for disposal
 Group
      2005 2004
      £’000 £’000
Mobile-homes held for disposal      3,283 3,526
13 Debtors
  Group  Company 
    2005 2004 2005 2004
    £’000 £’000 £’000 £’000
Trade debtors    7,892 9,366 – –
Amounts owed by subsidiary undertakings    – – 8,367 48,179
VAT receivable and other debtors 
– Explore Worldwide freehold property sale debtor    1,325 – – –
– VAT receivable and other debtors    6,837 6,327 23 9
Prepayments   7,683 5,140 259 27
    23,737 20,833 8,649 48,215
14 Creditors: amounts falling due within one year
  Group  Company
    2005 2004 2005 2004
    £’000 £’000 £’000 £’000
Bank loans and overdrafts    55,835 7,610 74,912 55,521
Obligations under hire purchase contracts    5,845 7,151 – –
Payments received on account    10,522 5,580 – –
Trade creditors    36,328 35,524 67 24
Amounts owed to subsidiary undertakings    – – 104,552 137,628
Corporation tax     2,702 1,936 – –
Social security and PAYE    351 320 – –
Other creditors    3,113 2,703 – –
Accruals and deferred income 
– Explore Worldwide freehold property purchase accrual   3,248 – – –
– accruals and deferred income    19,385 21,564 446 325
Dividends payable   9,233 8,381 9,233 8,381
    146,562 90,769 189,210 201,879
15 Creditors: amounts falling due after more than one year
  Group  Company
    2005 2004 2005 2004
    £’000 £’000 £’000 £’000
Bank loan     – 11,698 – 11,698
Obligations under hire purchase agreements   11,588 17,438 – –
    11,588 29,136 – 11,698
Borrowings are repayable as follows:
  Group  Company
    2005 2004 2005 2004
    £’000 £’000 £’000 £’000
Hire purchase agreements: 
– Within one year or less or on demand    5,845 7,151 – –
– More than one year but no more than two years    4,971 5,846 – –
– More than two years but no more than five years    6,617 11,125 – –
– More than five years    – 467 – –
Bank overdraft: 
– Within one year or less or on demand    4,281 89 4,189 –
Bank loan: 
– Within one year or less or on demand    51,554 7,521 70,723 55,521
– More than one year but no more than two years    – 8,367 – 8,367
– More than two years but no more than five years   – 3,331 – 3,331
Total borrowings    73,268 43,897 74,912 67,219 51
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
16 Derivatives and other financial instruments
The hire purchase agreements are repayable in twenty four quarterly instalments and interest is charged between bank base rate plus 0.78% and bank 
base rate plus 0.9%.
The bank loan is secured by a fixed and floating charge over the Group’s assets.
Page 9 of the Financial Review provides an explanation of the role that financial instruments have had during the period in creating or changing the risks the 
Group faces in its activities. The explanation summarises the objectives and policies for holding or issuing financial instruments and similar contracts, and 
the strategies for achieving those objectives that have been followed during the period.
The numerical disclosures in this note deal with financial assets and financial liabilities as defined in Financial Reporting Standard 13 ‘Derivatives and Other 
Financial Instruments: Disclosures’ (FRS 13). Certain financial assets such as investments in subsidiary companies are also excluded from the scope of 
these disclosures.
As permitted by FRS 13, short-term debtors and creditors have been excluded from the disclosures, other than the currency disclosures.
Interest rate profile
Financial assets 
The Group has no financial assets other than the following cash deposits:
      2005 2004
      £’000 £’000
Sterling      38,105 26,790
Euros      11,846 4,206
US dollars     424 367
      50,375 31,363
The deposits form part of the normal financing arrangements of the Group. Financial assets are analysed as follows:
      2005 2004
      £’000 £’000
Money market – on call      47,547 20,842
Money market – monthly     2,828 10,521
      50,375 31,363
Financial liabilities
After taking into account interest rate swaps and forward currency contracts entered into by the Group, the interest rate profile of the Group’s financial 
liabilities was as follows:
      2005 2004
      £’000 £’000
Fixed rate      20,000 20,000
Floating rate     53,268 23,897
      73,268 43,897
The financial liabilities of the Group are denominated as follows:
      2005 2004
      £’000 £’000
Sterling      48,367 43,897
Euros     24,901 –
      73,268 43,897
      2005 2004
Analysis of the fixed interest rate profile is as follows:
Weighted average fixed interest rate (%)      5.41 5.91
Weighted average period for which rate is fixed (years)      0.25 0.75
 
Floating rate liabilities includes £18,000,000 which has a capped rate of 6.0% and a floor rate of 4.2%.
The interest rate on the remaining floating rate bank loans is linked to one-month and six-month LIBOR. The interest rate on floating rate hire purchase loans 
is linked to a mixture of bank base rate and three month LIBOR.
The maturity profile of the Group’s financial liabilities is set out in note 15. 52
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Notes to the Financial Statements (continued)
Year ended 30 September 2005
16 Derivatives and other financial instruments (continued)
Currency exposures
As at 30 September 2005, the Group had no material currency exposure after taking into account the various forward contracts held at the year end.
As at 30 September 2005, the Group also held various open forward contracts taken out to hedge expected future foreign currency exposure. 
Borrowing facilities
The Group had the following undrawn committed borrowing facilities at the year end:
      2005 2004
Expiry date      £’000 £’000
In one year or less      15,615 10,000
In more than one year but less than two years      – –
In more than two years but less than five years     49,664 54,605
      65,279 64,605
Fair values
There is no material difference between the book values and fair values of the Group’s financial assets and liabilities at 30 September 2005.
17 Provisions for liabilities and charges 
 Group Company
    2005 2004 2005 2004
Analysis of deferred tax balances:    £’000 £’000 £’000 £’000
Accelerated capital allowances    5,519 5,441 3 2
Short-term timing differences    (212) (119) (12) (9)
Other timing differences   765 800 727 762
    6,072 6,122 718 755
 Group Company
    2005 2004 2005 2004
The movement during the year was as follows:    £’000 £’000 £’000 £’000
At 1 October 2004    6,122 4,621 755 227
(Credited) charged to the profit and loss account   (50) 1,501 (37) 528
At 30 September 2005    6,072 6,122 718 755
18 Called up share capital
      2005 2004
      £’000 £’000
Authorised 
90,000,000 ordinary shares of 5p each (2004: 90,000,000)     4,500 4,500
Allotted, called up and fully paid 
48,319,465 ordinary shares of 5p each (2004: 47,617,452)     2,416 2,381
Shareholders’ authority for the purchase of up to 4,773,200 of the Company’s ordinary shares of 5p each was still valid at the end of the year.
During the year 702,013 ordinary 5p shares were issued, with a nominal value of £35,101 in respect of options exercised under the Company’s share option 
schemes.
Details of outstanding share options over ordinary 5p shares in Holidaybreak plc as at 30 September 2005 are as follows:
     Number of Exercise 
     shares price  Dates of
     under option range (p) exercise
1991 Savings Related Share Option Scheme     4,552 252.0 2005–2006
2001 Savings Related Share Option Scheme     302,007 343.0–500.0 2005–2011
1991 Executive (Performance Related) Share Option Scheme    30,454 195.0–310.0 2001–2010
2001 Company Share Option Plan     296,879 453.5–647.0 2002–2015
1996 Unapproved Share Option Scheme (‘A’ Options)     340,485 310.0–624.0 2002–2015
1996 Unapproved Share Option Scheme (‘B’ Options)    1,399,222 315.0–624.0 2004–2014
     2,373,599
Further details of the Company’s share option schemes, together with details of performance criteria are contained in the Directors’ Remuneration Report 
on pages 31 to 35. 53
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
19 Reserves
    Share 
    premium Other Profit and 
    account reserves loss account Total
Group    £’000 £’000 £’000 £’000
At 1 October 2004     34,427 (3,709) 3,397 34,115
Premium on new shares issued    2,452 – – 2,452
Movement in own shares    – (66) – (66)
Exchange differences    – – 195 195
Retained loss for the year    – – (740) (740)
At 30 September 2005    36,879 (3,775) 2,852 35,956
Profit and loss account
The cumulative amount of goodwill resulting from acquisitions which has been written off prior to the adoption of FRS10 ‘Goodwill and Intangible Assets’ is 
£89,905,000 (2004: £89,905,000).
      2005 2004
Other reserves      £’000 £’000
Own shares      (3,862) (3,796)
Other     87 87
      (3,775) (3,709)
       Group 
Own shares       £’000
Cost and net book value 
At 1 October 2004       3,796
Additions       739
Transfers to participants      (673)
At 30 September 2005       3,862
Shares of the Company are held under trust by Holidaybreak Trustee Limited (a wholly owned subsidiary of Holidaybreak plc) and Mourant & Co. Trustees 
Limited, for the benefit of participants in the Holidaybreak plc Executive Share Option Schemes.
During the year Mourant & Co. Trustees Limited has purchased 120,233 ordinary 5p shares in Holidaybreak plc on behalf of the trust. At the year end, a 
total of 743,587 ordinary 5p shares were held.
    Share 
    premium Other Profit and 
    account reserves loss account Total
Company    £’000 £’000 £’000 £’000
At 1 October 2004     34,427 37,048 8,820 80,295
Premium on new shares issued    2,452 – – 2,452
Movement in own shares    – (66) – (66)
Retained profit for the year   – – 342 342
At 30 September 2005    36,879 36,982 9,162 83,023 54
Holidaybreak plc
Annual Report and 
Financial Statements 2005
20 Reconciliation of operating profit to operating cash flow
      2005 2004
      £’000 £’000
Operating profit      23,195 20,724
Depreciation charges, amortisation and impairment of goodwill     26,269 23,144
(Increase) decrease in debtors      (1,579) 1,144
Increase in creditors     4,101 1,262
Net cash inflow from operating activities      51,986 46,274
Companies acquired in the year contributed £9,658,000 to the Group’s net operating cash flows, received £44,000 in respect of net returns on investment 
and servicing of finance, paid £358,000 in respect of taxation and utilised £591,000 for capital expenditure.
21 Analysis and reconciliation of net debt
      Other 
    1 October  non-cash 30 September
    2004 Cash flow items 2005
    £’000 £’000 £’000 £’000
Cash at bank and in hand    31,363 19,012 – 50,375
Overdrafts   (89) (4,192) – (4,281)
    31,274 14,820 – 46,094
Debt due within one year    (7,521) (44,830) 797 (51,554)
Debt due after one year    (11,698) 12,495 (797) –
HP contracts   (24,589) 7,156 – (17,433)
Net debt    (12,534) (10,359) – (22,893)
During the year the Group entered into hire purchase contracts in respect of assets with a total capital value at inception of £nil (2004: £6,734,000).
      2005 2004
      £’000 £’000
Increase (decrease) in cash in the year      14,820 (2,076)
Cash (inflow) outflow from (increase) decrease in debt and lease financing    (25,179) 19,629
Change in net debt resulting from cash flows      (10,359) 17,553
New hire purchase contracts      – (6,734)
Net debt at beginning of year     (12,534) (23,353)
Net debt at end of year      (22,893) (12,534)
22 Guarantees and other financial commitments
a) Capital commitments
      2005 2004
      £’000 £’000
Contracted for but not provided for      – –
b) Contingent liabilities
The Group’s bankers have provided guarantees of approximately £17,836,000 (2004: £18,326,000) in respect of the Group’s trading activities. 
c) Pension arrangements
The Group has defined contribution pension schemes for its directors and senior employees. The pension charge for the year, reflecting amounts paid, was 
£930,000 (2004: £908,000).
d) Lease commitments
Annual commitments under non-cancellable operating leases are as follows:
 Property Office equipment
    2005 2004 2005 2004
Group    £’000 £’000 £’000 £’000
Leases which expire: 
– within one year    – 25 186 20
– within two to five years    601 397 352 271
– after five years   183 46 – 41
    784 468 538 332
Leases of land and buildings are typically subject to rent reviews at various intervals specified in the lease and provide for the lessee to pay all insurance, 
maintenance and repairs costs. There are no operating leases in the Company.
Notes to the Financial Statements (continued)
Year ended 30 September 2005 55
Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
Communication with Shareholders
Holidaybreak is committed to excellence in investor relations. We aim to 
provide large and small shareholders, market analysts and the financial 
media access to up-to-date information about our business and current 
progress. Principal sources of information are our award winning corporate 
website, the annual report and accounts, interim report and the email alert 
service.
Four statements are released during the financial year. Two are combined 
with the Chairman’s statements, issued at the time of the annual and  
half-year results announcements, and the others are on the day of our AGM 
and in September of each year. We aim to inform investors of any additional 
developments during the year. For example, we circulated an update to 
shareholders following the signing of contracts to purchase the two Dutch 
businesses in December 2004. There is an opportunity for shareholders to 
question the Chairman and other Directors at the AGM.
Progress of the Investor Relations programme, which is primarily carried 
out by the Chief Executive and the Finance Director, is reviewed by the 
Directors at monthly Board meetings. 
Institutional Investors
One-to-one meetings and group workshops are offered to analysts and 
institutional investors, usually following results or trading announcements. 
These presentations are posted on our website to allow all shareholders 
access to the material contemporaneously. We endeavour to satisfy any 
additional requests for meetings or information, subject always to our 
obligation to ensure that information of a potentially price sensitive nature is 
released first by way of a stock exchange announcement. 
Private Investors
Company announcements are posted on our website and e-mail alerts are 
sent out simultaneously to those who have registered on our distribution 
list. We also mail our shareholders individually. For this purpose we use our 
database of shareholders, which includes those individuals whose shares 
are held in nominee accounts. 
Shares by Category of Shareholding
(Number of fund managers)
 % of total
Active investment and unit trusts (56) 61.83
Index funds (13) 5.46
Insurance companies (11) 9.74
Pension funds (40) 9.80
Others including managed, private clients and PEPS 6.02
Directors, employees and trustees of Holidaybreak plc  
 share schemes 3.24
Holdings not analysed 3.91
Corporate Website
Our corporate website, www.holidaybreak.co.uk, is an indispensable 
information resource for anyone interested in Holidaybreak plc. In 
recognition of the site’s ease of use and depth of information, Holidaybreak 
was awarded ‘IR Best Practice Website Award for a Smaller Quoted 
Company’ at the Investor Relations Best Practice Website Awards 2005.
Enquiring About Your Shareholding
If you want to ask, or need any information about your shareholding, please 
contact the Company’s registrar, Capita Registrars, Northern House, 
Woodsome Park, Fenay Bridge, Huddersfield HD8 OLA (telephone: 0870 
162 3131) or visit www.capitaregistrars.com.
Shareholder Information
Share Dealing Service
A share dealing service is available to existing shareholders to buy or sell the 
Company’s shares via Capita Share Dealing Services. Online and telephone 
dealing facilities provide an easy to access and simple to use service. For 
further information on this service, please visit capitadeal.com – online 
dealing or telephone 0870 4584577 – telephone dealing.
Please note that the Directors of the Company are not seeking to encourage 
shareholders to either buy or sell shares. Shareholders in any doubt about 
what action to take are recommended to seek financial advice from an 
independent financial advisor authorised by the Financial Services and 
Markets Act 2000.
Share Price Listing
The current Holidaybreak plc share price is listed in the following national 
and regional newspapers:
Financial Times The Times The Independent 
The Daily Telegraph The Guardian The Daily Mail 
The Daily Express Manchester Evening News Scotsman
The share price may also be viewed on our website at www.holidaybreak.co.uk 
and on various teletext and internet financial sites. The Holidaybreak website 
includes interactive comparative share price graphing against relevant indices, 
and a record of volumes traded.
Substantial Shareholdings
As at 1 December 2005, the Directors were aware of the following interests 
of over 3% of the Company’s issued share capital (these include both 
material and non-material holdings and are not all disclosable in accordance 
with sections 198-208 of the Companies Act 1985).
 Number of % of issued 
 shares share capital
Aberforth Investment Managers 8,390,183* 17.36
Fidelity Investments 5,213,707* 10.79
Morley Fund Management 2,898,645*  6.00
Barclays Global Investors 2,884,111*  5.97
Legal & General Investment Management 2,633,370*  5.45
Credit Suisse Asset Management 2,046,415  4.23
Framlington Investment Management 1,895,000  3.92
Scottish Widows Investment Partnership 1,656,832 3.43
* Includes interests disclosed under sections 198-208 of the Companies Act 1985.
Some substantial shareholdings are split into more than one registered 
holding.
Shares by Size of Registered Holding
(As at 1 December 2005)
 Number of Number of  
 holders shares % of total
Up to 1,000 1,388 548,823 1.14
1,000–9,999 346 943,871 1.95
10,000–49,999 65 1,618,555 3.35
50,000–99,999 29 2,122,135 4.39
100,000–499,999 59 14,101,502 29.17
500,000 and over 21 29,002,708 60.00
 1,908 48,337,594 100.00 56
Holidaybreak plc
Annual Report and 
Financial Statements 2005
Shareholder Information (continued)
Shareholder Discounts
The Directors of Holidaybreak plc would be delighted if as many shareholders as possible were to benefit from the Company’s shareholder discount 
scheme and enjoy the variety of quality holidays that we offer. Shareholders with more than 200 shares are able to benefit from the scheme, which allows a 
10% reduction on the full brochure price of any holiday booked direct with a UK based member of the Group. Full details of the scheme can be sent out on 
request and are also available on the Company’s website at www.holidaybreak.co.uk. 
Financial Calendar
Year end 30 September 2006
Results
Annual General Meeting 14 March 2006 
Interim Results May 2006 
Trading Update September 2006 
Preliminary Results December 2006
Dividend
Final Dividend 
– ex dividend 29 March 2006 
– payable 25 April 2006
Interim Dividend 
– payable August 2006 
Directors’ interests
As at 30 September 2005 the Directors’ beneficial interests in the share capital of the Company were as follows:
 
 30 September 2005 30 September 2004 
  or date of appointment if later
    Number of  Number of 
    ordinary 5p Number of ordinary 5p Number of 
    shares options shares options
Robert Ayling    5,000 – 5,000 –
Bob Baddeley    30,000 143,910 34,716 162,620
Matthew Cheetham    1 65,410 1 37,149
Nick Cust    3,488 145,668 3,073 147,557
James Greenbury    4,000 – – –
Sally Martin    – – – –
Carl Michel    1,000 – 1,000 –
Simon Tobin     – 136,271 – 132,285
James Wallace     4,000 – 4,000 –
Mark Wray    12,772 144,450 6,076 148,959
In addition to the above beneficial interests, the Executive Directors held a non-beneficial interest in shares held by Holidaybreak Trustee Ltd as trustee of 
the Holidaybreak plc Employee Share Trust and Mourant & Company Trustees Ltd as trustee of the Holidaybreak plc Employee Benefit Trust (the ‘Trustees’). 
Shares are held by the Trustees to satisfy options made under the Company’s share option schemes.
As at 30 September 2005, the Trustees held an aggregate total of 743,587 shares (2004: 835,655).
None of the Directors has any other interests requiring disclosure under Schedule 7 to the Companies Act 1985.  Holidaybreak at a Glance
£303.0m
group turnover
(2004: £281.6m)
£79.8m
gross profit
(2004: £72.3m)
£35.8m
operating profit*
(2004: £31.4m)
Holidaybreak
Group
Holidaybreak is a European 
specialist holiday group with 
market leading positions 
in the UK and other 
major European markets. 
The business generates 
substantial cash, delivers 
industry-leading margins 
and has proven resilient in 
a rapidly changing market 
environment.
The Group has the financial strength 
to exploit changing market trends and 
will grow the portfolio of brands under 
the Holidaybreak umbrella organically, 
by investment in growing areas of the 
current business and by acquisition. 
Internet is at the core of the marketing strategy.  
The three operating divisions have different product 
and business models but share important strengths 
– market leadership, multi-channel distribution 
and high standards of product and service quality. 
Together they make a strong and well-balanced 
business.
 1 Holidaybreak at a Glance
 2 Chairman’s Statement
 4 Chief Executive’s Review
 8 Financial Review
10 Hotel Breaks Division
14 Adventure Travel Division
18 Camping Division
22 Directors and Advisors
24 Corporate Social Responsibility
26 Corporate Governance
30 Directors’ Report
31 Directors’ Remuneration Report
36 Independent Auditors’ Report
37 Consolidated Profit and Loss Account
39 Balance Sheets
40 Consolidated Cash Flow Statement
41 Statement of Accounting Policies
43 Notes to the Financial Statements
55 Shareholder Information
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Holidaybreak plc
Annual Report and 
Financial Statements 2005
European specialist holiday group
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European specialist  
holiday group
Annual Report and 
Financial Statements
Holidaybreak plc    Annual Report and Financial Statements 2005