Trading Update

RNS Number : 4718Z
Western & Oriental plc
21 July 2008

Western & Oriental plc

Trading Update

As announced in the group's interim results in May 2008, Western & Oriental plc reported that bookings and reported revenue were in line
with expectations for the first half of the year, however the Board remained cautious for the remainder of the financial year. Since then
consumer confidence in the UK has significantly deteriorated and the leisure market has become even more challenging.

Booking levels have largely remained in line with expectations for a number of the businesses, in particular the conference and
incentive (C&I) division has performed well. However, an increasing number of those bookings depart in the next financial year.
Additionally, the company has seen increased pressure on the tour operating businesses to price-match against our competitors. This pressure
on prices means margins are being maintained at similar levels to the prior year, rather than improving as had been anticipated. Due to this
combination of lower sales and lower margins, the company now anticipates a significant shortfall in reported earnings compared to market
expectations for the year as a whole, and the group will remain loss making.

Pleasingly, there has been little evidence of clients cancelling bookings, and confirmed bookings for the full year should exceed
original expectations, again with C&I performing particularly well. This level of confirmed bookings will result in a forward order book in
excess of �25 million at 30 September 2008, compared to �18.9 million at 30 September 2007, representing like for like growth of over 15%.
While, this strong forward order book will form a good foundation for the next financial year, the company expects the difficult trading
conditions to continue for the foreseeable future.

Cost savings
As announced in May, the company has identified approximately �1 million of annual overhead cost that will be eliminated from the cost
base by the end of this financial year. In addition to these savings, the company is identifying further ways to reduce costs in light of
current market trading conditions. However, this will lead to further one off costs in the current year. The group is also likely to bear
some additional one off costs in relation to the implementation of the new mid-office operating system for the UK tour operations. This
project remains on course for completion by 30 September 2008.

Outlook
The group's cash balances remain at a similar level to that reported at 31 March 2008 and the group continues to have no debt. The Board
believes that this difficult trading market will eventually give rise to acquisition opportunities for Western & Oriental that would not
necessarily exist in a more stable market place. However, during this current period of market uncertainty the group does not anticipate
making further acquisitions. By taking the above actions to reduce the overall cost base and focusing on the integration of our acquired
businesses, the Board believes that the group will be able to sustain the business and continue to move towards profitability for the year
ending 30 September 2009. The Board remains confident in the overall business strategy.

21 July 2008

Enquiries
Western & Oriental plc
David Howell, Chairman 0207 821 4078
Steven Hall, Finance Director 0207 821 4076

Collins Stewart 0207 523 8353
Adrian Hadden

Temple Bar Advisory 0207 002 1080
Tom Allison 07789998020
Caroline Merrell

About Western & Oriental plc
Western & Oriental is a specialist luxury travel group with a number of established high quality brands. The company was admitted to
trading on AIM under the ticker symbol WEST in March 2006. The Group acts as a tour operator, travel agent and conference and incentive
organisers, offering a premium service for tailor-made and specialist packaged holiday programmes to destinations worldwide.

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

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