Cox & King

The Cox & Kings brand has evolved over 250 years of history and today is one of the recognised holiday brands that caters to the overall travel needs of Indian and international travellers. 

The core business of Cox & Kings is the sale of packages for leisure travel where two or more components of travel, such as flights, hotels, car rentals, transfers and ground handling services, are bundled together in advance and sold to customers.

Cox & Kings has broad international presence and reach with subsidiaries in the UK, Australia, New Zealand, Japan, the US, the UAE, Germany, Hong Kong, Greece and Singapore. Cox & Kings provides four key service offerings: leisure travel, corporate travel, visa processing and foreign exchange.

Company has grown at fast space in past

Financial

Dec Quarter result

Dec-11 quarter loss was mainly by reason of acquisition. Cox & King acquires Holidaybreak plc for GBP 323.43 million

Holidaybreak is an education and activity travel group listed on the London Stock Exchange. Holidaybreak provides educational and activity trips for school children as well as worldwide adventure holidays, short breaks in the UK and Europe, and mobile-home and camping holidays on sites throughout Europe. The group has three operating divisions: Education and Adventure, Hotel Breaks and Camping, which have leading positions in the UK and other major European markets, and has more than 15 long-established and widely recognised brands.

Business of Holidaybreak is seasonal. Typically it shows loss in Oct to Mar period & profit in Apr to Sept period.

Cox & King may show loss for FY 2011-12 due to

1. Due to seasonal nature of business Holidaybreak likely see loss in Q4 ending Mar-12.

2. Company has borrowed heavily for acquisition.

Debt Status

Mar-11 Cox & King  : 844 crore

Sep-11 Cox & King : 1335 crore

Sep-11 Prometheon Holdings (UK) Ltd (SPV of HBR) : 941 crore

There is also risk of integration of Holidaybreak with Cox & King.

As loss has been declared in Dec-11 quarter, market sentiment is down. In future price may come down as loss may be declared in FY 2011-12.

We are not recommending buy at current valuation. But any further decline in future will be tempting opportunity.

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