JOURNEY GROUP PLC Interim Report 2016

JOURNEY GROUP PLC Interim Report 2016

CONTENTS 1 Executive Chairman s Letter to Shareholders 5 Unaudited Condensed Consolidated Income Statement 6 Unaudited Condensed Consolidated Statement of Comprehensive Income 7 Unaudited Condensed Consolidated Balance Sheet 8 Unaudited Condensed Consolidated Cash Flow Statement 9 Unaudited Condensed Consolidated Statement of Changes in Equity 11 Notes to the Unaudited Condensed Consolidated Accounts 17 Independent Review Report to Journey Group plc

EXECUTIVE CHAIRMAN S LETTER TO SHAREHOLDERS INTRODUCTION The Group has had a good first half of the year overall delivering results in line with expectations and making further progress strategically. Against a backdrop of adverse weather in the first quarter of 2016 and heightened economic uncertainty globally, it is encouraging that we can continue this growth momentum and shortly after the period end, the Board was delighted to announce the contract for four daily international flights from Los Angeles International Airport with an important new customer, American Airlines. The key highlights for the half year were: Financial Highlights: Revenue growth of 7% to $32.7 million (H1 : $30.5 million) EBITDA increased by 50% to $2.7 million (H1 : $1.8 million) Profit before tax of $1.8 million (H1 : $1.0 million) Basic earnings per share of 11.32 cents (H1 5.27 cents) Net cash at 2016 of $2,620,000 and at 31 August 2016 of $3,273,000 Interim dividend of 3.4 pence per share paid on 31 March 2016 in lieu of a final dividend for the previous financial year Operational Highlights: Air Fayre: Awarded and successfully launched contracts in mid-june with WOW Air and Dynamic International out of Los Angeles International Airport ( LAX ) Post the period end awarded a contract with American Airlines for four daily international flights out of LAX, two of which commenced mid-july 2016 with the remainder launching H2 2016 Watermark: Opened an office in the USA with encouraging number of new business enquiries Secured new business with Swiss International Air Lines AG Post-period end, on 23 August 2016, the boards of Jaguar Holdings Limited and the Independent Directors of Journey Group plc announced that they had reached agreement on the terms of a recommended cash offer by Jaguar Holdings for the entire issued and to be issued share capital of Journey to be effected by means of a Court sanctioned scheme of arrangement between Journey and its shareholders pursuant to the provisions of Part 26 of the Companies Act 2006. A circular setting out the full details of the Scheme and procedures to be followed by shareholders to approve the Scheme is expected to be despatched to shareholders later today.

EXECUTIVE CHAIRMAN S LETTER TO SHAREHOLDERS MARKET CONDITIONS Passenger numbers to May 2016 are estimated by IATA, the airline trade body, to have grown at approximately 5.3% globally. This is a rate which they describe as robust and in line with the average pace seen over the past decade. However, following a bumper year in there are signs that growth momentum globally has weakened slightly. This is partly attributed to the Brussels terrorist attacks and as a reflection of the ongoing fragile global economic backdrop including the uncertainty post Brexit. It is anticipated, however, that there may be some stimulus in the short term from lower fares resulting from the lower oil price environment. Reassuringly for the Group, in North America - Air Fayre s core market - carriers have focused their efforts on the larger domestic market with a key metric of domestic revenue passenger kilometres increasing 4.4% year-on-year up from 2.4% in the prior year. RESULTS The results for the half year were as follows: 2016 Revenue 32,664 30,494 EBITDA before exchange differences 2,686 1,812 Exchange differences 20 (12) EBITDA 2,706 1,800 Depreciation and amortisation (875) (757) Operating profit 1,831 1,043 Finance costs (56) (48) Profit before tax 1,775 995 Income tax expense (423) (282) Profit attributable to equity shareholders 1,352 713 Basic earnings per share Diluted earnings per share 11.32 cents 11.32 cents 5.27 cents 5.27 cents From a financial perspective, the Group had a good first half trading with revenue increasing by 7% to $32.7million and EBITDA increasing by 50% to $2.7 million from $1.8 million mainly reflecting Air Fayre s FedEx contract in Memphis and also the UAX (United Express Jets) for a full 6 months, as this contract only launched in later April. Consequently Operating Profit before tax and Profit before tax also showed increases of 76% and 78% respectively. The tax charge decreased to approximately 24% as a result of the greater proportion of US profits and related tax charges at an average rate of 39.5% combined with a tax credit relating to year, giving a Profit after tax of $1.35 million. The Basic earnings per share amounted to 11.32 cents compared with 5.27 cents last year. Net cash as at 2016 amounted to $2.6 million comprising cash of $5.0 million offset by finance lease debt of $2.4 million. This compares with net cash at 31 December of $3.6 million and at of $7.2 million. The reduction reflects a temporary increase in trade receivables in the US division, resulting from delays in the annual price updates, along with a decrease in trade payables and a small increase in inventory days. These metrics are related

to the new airline customers in recent months and associated new suppliers. Additionally, the company completed its buyback programme on 15 April 2016 with a repurchase of 164,815 shares and in so doing, returning 313,149 to shareholders. US DIVISION 2016 Revenue 24,944 20,802 EBITDA 2,303 1,438 Operating profit 1,465 727 The US Division delivered a strong first half performance despite several flight cancellations as a result of adverse weather in the first quarter and the impact of the ongoing United Airlines change in the mix of the types of aircraft utilised year on year. Revenue rose 20% to $24.9 million from $20.8m reflecting a full six months impact for both UAX Express Jets and the FedEx contract in Memphis. This also impacted EBITDA which increased by 60% to $2.3 million from $1.4 million and similarly Operating profit which more than doubled to $1.5 million from $0.7 million. Pleasingly, two new customers were awarded and launched during the first half of the year. One contract awarded was with WOW Air, the low cost Icelandic airline, to provide a buy on board catering offering and crew meals for four weekly international flights to Reykjavik out of LAX. The other was to provide a range of catering services for Dynamic International for their four weekly flights to Cancun from LAX including hot and cold meals, snacks, crew meals and international waste handling. In July we announced the award of the contract with American Airlines. Air Fayre will provide catering services for four daily international flights out of LAX from some additional space in the vicinity. Two flights commenced in mid-july 2016 with the remainder launching later in 2016 which will have a small positive impact on our performance in the second half of the year. PRODUCTS DIVISION 2016 Revenue 7,720 9,692 EBITDA before exchange differences 8 247 Exchange differences 4 (19) EBITDA after exchange differences 12 228 Operating (loss)/profit (25) 182 The Products Division Watermark was impacted by the reduction in business from Delta Airlines. As previously explained, the contract with Delta has not been renewed and will formally come to an end in [October 2016]. Revenue fell 20% to $7.7 million from $9.7 million. EBITDA fell to $12,000 from $228,000 with an operating loss of $25,000 in comparison with $182,000 profit for the prior year period. The strategically important opening of a US-based office in New York has enabled a focus on expanding business with the American carriers and already facilitated a number of new enquiries.

EXECUTIVE CHAIRMAN S LETTER TO SHAREHOLDERS DIVIDEND The interim dividend of 3.4 pence per share in lieu of a final dividend in respect of the year ended 31 December was paid on 31 March 2016 at a cost of 408,364. This was deemed beneficial to shareholders ahead of tax changes relating to dividends which took effect in April 2016. Consequently, the Board did not recommend the payment of a final dividend in respect of the year ended 31 December. RECOMMENDED CASH OFFER As announced on 23 August 2016, Jaguar Holding has announced a recommended cash offer of 240 pence per share for the entire issued and to be issued share capital of Journey. This values the Group at approximately 28.4 million and is to be effected by way of a court-sanctioned scheme of arrangement. Jaguar Holdings is a private limited company incorporated in England and Wales, which was formed at the direction of Harwood Capital LLP, Journey Group s largest shareholder. A scheme circular outlining the terms of the offer and the recommendation made by the independent Directors to vote in favour of the scheme is expected to be posted to shareholders on 8 September 2016. OUTLOOK The Group has delivered an excellent half-year performance overall, with a strong growth in profitability reflecting the impact of new customers launched in and we have continued to make good progress on our strategic objectives. To date, our strategy for growth has worked as we have been awarded and successfully launched a range of Air Fayre s catering services to existing and new customers from our LAX facility and demonstrated the transferability of the model with the opening of the facility at Memphis. Looking ahead, however, we are at an inflection point where future growth will require new contract wins and additional, potentially speculative, investment in capacity. Whilst the business has fared well in the public markets, [the Journey Independent Directors believe that] Journey will be better placed to deliver the next phase of its strategic objectives and to grow its US in-flight catering business as a private company. Consequently, as announced on 23 August 2016, Journey s Independent Directors are recommending shareholders accept the 240 pence per share cash offer for the Group. The Board continues to expect full year performance to be in line with expectations. Stephen Yapp Executive Chairman 8 September 2016

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT Note 2016 12 months to 31 December Revenue 3 32,664 30,494 63,574 Cost of sales (24,008) (23,073) (47,871) Gross profit 8,656 7,421 15,703 Operating and administrative costs (6,825) (6,378) (12,353) Operating profit 3 1,831 1,043 3,350 Finance costs 4 (56) (48) (96) Profit before tax from continuing operations 1,775 995 3,254 Income tax expense 5 (423) (282) (954) Profit attributable to equity shareholders 3 1,352 713 2,300 Earnings per share Basic Diluted 6 6 11.32 cents 11.32 cents 5.27 cents 5.27 cents 17.18 cents 17.18 cents

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 2016 12 months to 31 December Profit attributable to equity shareholders 1,352 713 2,300 Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Exchange differences on translating in presentational currency 48 50 (57) Other comprehensive income, net of tax 48 50 (57) Total comprehensive income attributable to equity shareholders 1,400 763 2,243

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET Note 2016 31 December Assets Non-current assets Property, plant and equipment 7 6,601 7,171 7,016 Goodwill 4,171 3,960 4,171 Intangible assets 598 115 612 Deferred tax 234-57 11,604 11,246 11,856 Current assets Inventories 1,302 980 1,006 Trade and other receivables 5,987 4,436 6,002 Other short-term financial assets - - - Prepayments 1,559 535 240 Current income tax 283 57 435 Cash and short-term deposits 8 5,040 9,722 6,508 14,171 15,730 14,191 Total assets 25,775 26,976 26,047 Equity and liabilities Equity attributable to equity share holders of the parent Issued share capital 5,715 5,380 5,715 Merger reserve 2,519 2,372 2,519 Foreign currency translation reserve (1,796) (954) (1,844) Retained earnings 8,530 10,450 8,169 Total equity 14,968 17,248 14,559 Non-current liabilities Interest bearing loans and borrowings 8 1,661 1,827 1,960 Deferred tax 659 212 553 2,320 2,039 2,513 Current liabilities Trade and other payables 7,728 6,986 8,069 Current income tax - - - Interest bearing loans and borrowings 8 759 703 906 8,487 7,689 8,975 Total liabilities 10,807 9,728 11,488 Total equity and liabilities 25,775 26,976 26,047 The interim condensed consolidated financial statements on pages 5 to 16 were approved by the Board on 7 th September 2016 and signed on its behalf by Stephen Yapp Executive Chairman

UNAUDITED CONDENSED CONSOLIDATED CASHFLOW STATEMENT 2016 12 months to 31 December Net cash flows from operating activities Profit after tax 1,352 713 2,300 Depreciation and amortisation 875 757 1,592 Share based payments 35 23 Finance costs 56 48 96 Income tax expense 423 282 954 (Increase)/decrease in inventories (296) (235) (261) Decrease/(increase) in trade and other receivables (1,303) 393 (878) Increase/(decrease) in trade and other payables (341) 415 134 Cash flows generated from operations 801 2,373 3,960 Interest paid (56) (48) (96) Income taxes paid (343) (34) (800) Net cash flows generated from operating activities 402 2,291 3,064 Cash flows from investing activities Purchase of property, plant and equipment (430) (370) (434) Purchase of intangible assets (16) (14) (541) Disposal of property, plant and equipment - - 15 Net cash flows generated from/(used in) investing activities (446) (384) (960) Cash flows from financing activities Dividend paid (577) (328) (333) Share buy back (449) - (3,068) Share based payments - - - Payment of finance lease obligations (341) (260) (630) Net cash flows used in financing activities (1,367) (588) (4,031) Net increase/(decrease) in cash and cash equivalents (1,411) 1,319 (1,927) Net foreign exchange difference 48 16 (57) Cash and cash equivalents at beginning of period 6,403 8,387 8,387 Cash and cash equivalents at end of period 5,040 9,722 6,403

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Condensed consolidated statement of changes in equity for the 2016 Issued share capital Merger reserve Foreign currency translation reserve Retained earnings Total equity At 1 January 2016 5,715 2,519 (1,844) 8,169 14,559 Dividend - - - (577) (577) Share Buy Back - - - (449) (449) Share based payments 35 35 Transactions with owners - - - (991) (991) Profit attributable to equity shareholders - - - 1,352 1,352 Other comprehensive income: Exchange differences on translating into presentational currency - - 48-48 Total comprehensive income - - 48 1,352 1,400 At 2016 5,715 2,519 (1,796) 8,530 14,968 Condensed consolidated statement of changes in equity for the Issued share capital Merger reserve Foreign currency translation reserve Retained earnings Total equity At 1 January 5,380 2,372 (1,004) 10,065 16,813 Issue of ordinary shares - - - - - Dividend - - - (328) (328) Share buy back - - - - - Share based payments - - - - - Transactions with owners - - - (328) (328) Profit attributable to equity shareholders - - - 713 713 Other comprehensive income: Exchange differences on translating into presentational currency - - 50-50 Total comprehensive income - - 50 713 763 At 5,380 2,372 (954) 10,450 17,248

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Condensed consolidated statement of changes in equity for the 12 months to 31 December Issued share capital Merger reserve Foreign currency translation reserve Retained earnings Total equity At 1 January 5,715 2,519 (1,787) 10,353 16,800 Issue of ordinary shares - - - - - Dividend - - - (333) (333) Share buy back - - - (4,174) (4,174) Share based payments - - - 23 23 Transactions with owners - - - (4,484) (4,484) Profit attributable to equity shareholders - - - 2,300 2,300 Other comprehensive income: Exchange differences on translating into presentational currency - - (57) - (57) Total comprehensive income - - (57) 2,300 2,243 At 31 December 5,715 2,519 (1,844) 8,169 14,559

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. CORPORATE INFORMATION Journey Group plc is a public limited company incorporated and domiciled in England & Wales. The Company s shares were publicly traded on the AIM market of the London Stock Exchange during the reporting period. The principal activities of the Group are described in Note 3. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES i. Basis of preparation The interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group s financial statements for the year ended 31 December, which were prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ( IASB ) and interpretations issued by the International Financial Reporting Interpretations Committee ( IFRIC ) of the IASB (together IFRS ) as adopted by the European Union, and in accordance with the requirements of the Companies Act applicable to companies reporting under IFRS. The same policies and methods as followed in the annual report have been used in the preparation of the interim condensed consolidated financial statements. The information relating to the six months ended 2016 and the six months ended is unaudited and does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group s statutory financial statements for the year ended 31 December have been reported on by its auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified and did not draw attention to any matters by way of emphasis, or contain a statement under section 498(2) or (3) of the Companies Act 2006. The interim condensed consolidated financial statements have been reviewed by the auditor and their report to the Board of Journey Group plc is included within this interim report. 3. SEGMENTAL REPORTING The Group is organised into two primary business segments, the US and Products Divisions. These reportable segments are the strategic divisions for which financial information is provided to the chief operating decision maker. The US Division is a supplier of catering and beverages to the domestic and international travel industry within the United States of America. The Products Division provides a broad range of travel supplies predominately to the international travel industry on a global basis. Segment revenues are based on the country of domicile of the customer; information is not available to produce segment revenues based on sales by destination. Segmental assets include all operating assets used by a segment and consist principally of operating cash, receivables, prepayments, inventories, goodwill and property, plant and equipment, net of allowances and provisions. Where allocation across segments is not possible, they are classified as unallocated corporate assets.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Segmental information by business segment for 2016 US Division Products Division Total Revenue Revenue from sale of unprocessed food* 23,548 1,396 7,720-31,268 1,396 Total Revenue 24,944 7,720 32,664 Segment result 1,465 (25) 1,440 Unallocated corporate expenses 426 Operating profit 1,866 Share based payments (35) Finance costs (56) Income tax expense (423) Profit attributable to equity shareholders 1,352 Segment assets 18,238 7,204 25,441 Unallocated corporate assets (184) 25,258 Current & deferred income taxes 517 Total assets 25,775 Segment liabilities (7,520) (2,417) (9,937) Unallocated corporate liabilities and eliminations (211) (10,148) Current and deferred income taxes (659) Total liabilities (10,807) *Revenue is recognised on raw materials that are bought in and sold on to caterers on the basis that the risks and rewards of ownership are initially assumed by Journey Group plc and are subsequently transferred to the caterer.

Segmental information by business segment for US Division Products Division Total Revenue Revenue from sale of unprocessed food 19,027 1,775 9,692-28,719 1,775 Total Revenue 20,802 9,692 30,494 Segment result 727 182 909 Unallocated corporate expenses 134 Operating profit 1,043 Finance costs (48) Income tax expense (282) Profit attributable to equity shareholders 713 Segment assets 16,920 7,258 24,178 Unallocated corporate assets 2,741 26,919 Current income taxes 57 Total assets 26,976 Segment liabilities (6,783) (2,406) (9,189) Unallocated corporate liabilities and eliminations (327) (9,516) Current and deferred income taxes (212) Total liabilities (9,728)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Segmental information by business segment for 12 months to 31 December US Division Products Division Total Revenue 42,396 17,799 60,195 Revenue from sale of unprocessed food 3,379-3,379 Total Revenue 45,775 17,799 63,574 Segment result 2,401 346 2,747 Unallocated corporate expenses 626 Operating profit 3,373 Share based payments (23) Finance costs (96) Income tax expense (1,018) Profit attributable to equity shareholders 2,236 Segment assets 17,596 7,532 25,128 Unallocated corporate assets 427 25,555 Deferred income taxes 492 Total assets 26,047 Segment liabilities 6,713 2,780 9,493 Unallocated corporate liabilities and eliminations 1,442 10,935 Current and deferred income taxes 553 Total liabilities 11,488 4. FINANCE COSTS 2016 12 months to 31 December Loans and overdrafts 4 4 8 Finance leases 52 44 88 Total finance costs 56 48 96 5. INCOME TAX The Group is organised into two primary segments, the Products and the US Divisions. Geographically, the subsidiaries in Products Division are based in United Kingdom, Australia and Hong Kong and the subsidiaries in the US Division are based in United States of America. The operating income of divisions is subject to income tax in their respective geographical territories. The movement in income tax expense is the result of movement in divisional profits applicable to different tax rates.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6. EARNINGS PER SHARE The basic earnings per share is calculated by dividing the profit attributable to equity shareholders (numerator) by the weighted average number of ordinary shares in issue during the period (denominator). The diluted earnings per share is calculated using the same numerator, adjustable for the share based payments charge, with the denominator adjusted for the dilutive effects of share options. The dilutive effect of share options for the six months period to 2016 reflects the number issued effectively for nil value, of ordinary shares that would have been issuable at that date under the management incentive scheme. Profit table 2016 12 months to 31 December Profit attributable to equity shareholders 1,352 713 2,300 Weighted average number of shares in issue 2016 12 months to 31 December For basic earnings per share 11,941,490 13,533,729 13,390,380 For diluted earnings per share 11,941,490 13,533,729 13,390,380 Earnings per share table 2016 Cents Cents 12 months to 31 December Cents Basic earnings per share 11.32 5.27 17.18 Diluted earnings per share 11.32 5.27 17.18

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7. PROPERTY, PLANT AND EQUIPMENT During the period plant and equipment has been purchased amounting to $430,000 ( : $370,000). There were no asset disposals in the reporting period. Capital commitments contracted for but not provided for at 2016 amounted to $222,567 ( : $nil). 8. NET CASH 2016 31 December Cash and short-term deposits 5,040 9,722 6,508 Current interest bearing loans and borrowings: Finance leases (759) (703) (906) Non-current interest bearing loans and borrowings: Finance leases (1,661) (1,827) (1,960) Net cash 2,620 7,192 3,642

INDEPENDENT REVIEW REPORT TO JOURNEY GROUP PLC Introduction We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 2016 which comprises the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated balance sheet, condensed consolidated cash flow statement, condensed consolidated statement of changes in equity and notes 1 to 8. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review 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, for our review work, for this report, or for the conclusions we have formed. Directors Responsibilities The half-yearly financial report, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing and presenting the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange. As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the halfyearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union, and the AIM Rules of the London Stock Exchange. RSM UK Audit LLP Chartered Accountants 25 Farringdon Street London EC4A 4AB Date 7 September 2016

Journey Group plc Building One The Square Southall Lane Heston Middlesex UB2 5NH United Kingdom Tel: +44 (0)20 8744 7080 Fax: +44 (0)20 8574 4991 www.journeygroup.plc.uk