WMK Journey Grp

RNS Number:2745Z
Watermark Group PLC
29 June 2007


FINAL embargoed until Friday 29th June 2007 at 07:00 BST.



                              WATERMARK GROUP PLC
                                        
                                  AGM Statement


Watermark Group Plc, a leading provider of in-flight products, catering and
cabin management services to the airline and travel industry, announces that at
the Annual General Meeting to be held at noon today, Stephen Yapp, Executive
Chairman will make the following statement.


New management team and structure

Following shareholder approval for the issue of #8 million Convertible Bonds on
4 June, I joined the Board as Executive Chairman. The refinancing has provided a
necessary degree of stability to the business and we can now focus on restoring
value for shareholders. Under my direction, the group's range of in-flight
products and services will be managed through two discrete trading divisions,
each led by a Managing Director. The clear structure will significantly improve
accountability within the group and enable us to implement more effective
performance management processes. Over time, I believe this will improve the
operational efficiency of the organisation.


Nick Scott, previously the group's Commercial Director, was appointed MD
Services on 8 May and the Board is actively seeking to fill the position of MD
Products. The Board's other executive director is Peter Fitzwilliam, who was
appointed as Chief Financial Officer on 8 May.


Alongside the executive directors, we have two non-executive directors. Danny
Bernstein, who has extensive experience in the airline industry, is Senior
Independent Non-Executive Director, and Graham Bird is representative of SVG
Investment Managers, the group's largest shareholder. To further strengthen the
Board, we intend to make an additional non-executive appointment and are
currently undertaking a search for an individual with complementary skills and
experience.


Key tasks

The past year has seen change in senior management, a decline in profitability,
a significant increase in debt and, recently, the resultant focus on refinancing
the group. After this difficult period, the initial task for the new management
team is to stabilise the business by establishing clear organisational
structures, setting short-term objectives and providing support for
customer-facing and operational staff.


Looking beyond this initial period, the Board will focus on the following key
objectives for the business:


   *restoring underlying profitability
   *resuming growth
   *focusing on cash management



Profitability

Restoring profitability will be achieved through a number of steps. First, by
improving the organisational structure and accountability, we will be able to
improve performance through better monitoring and management using key
performance indicators. Secondly, by giving ownership of processes to key
operational staff, we will benefit from the motivation and entrepreneurialism of
our staff. Thirdly, by focusing on specific bottlenecks in our processes and on
areas of high spend, we will be able to improve the way we operate.


Initial areas of opportunity for improvements in profitability have been
identified in both divisions. Within Services, these are through improved
operational efficiency at our Heston facility close to Heathrow; within
Products, they are in improved international logistics and purchasing. Reviews
have begun in both areas to establish the scale and timing of the opportunities
available. The Board will provide an update of progress at the time of our
interim results.


Growth

Whilst the immediate focus for the management team will be on stabilising the
business and restoring underlying profitability, the Board believes that
excellent long-term growth prospects exist in both Divisions. By way of example,
the changes brought about by the open skies agreements will create new
opportunities which we believe will be positive for Watermark. The Encompass
contract with Air Canada has also established a platform which should provide
further options for the group in future. Over the coming six months, the Board
will examine these prospects and report its findings at the full year results.


Cash management

The recent refinancing has established a stronger financial base for the group.
Long term financing has been obtained through the issue of Convertible Bonds and
the group's bank debt has been reduced to a more comfortable level. The Board
will remain focused on improving the cash-generation characteristics of the
group so as to strengthen the balance sheet and provide the financial base to
fund the group's profit improvement and expansion ambitions over the coming
months and years.


Trading outlook

Watermark operates with a high level of contracted turnover, and this provides a
stable base from which to effect the proposed improvements. We have a base of
high quality customers, who have been supportive throughout our refinancing and
we look forward to working with them and offering continual improvements in the
services we offer.


Under the new management, a comprehensive review of the group's financial
performance and position is currently being undertaken and the Board anticipates
being able to provide guidance for the year when the company announces its
interim results in September.



Enquiries:

Stephen Yapp
Executive Chairman
Watermark Group plc
Tel: 020 8606 2000


Jeremy Carey/Andrew Dunn
Tavistock Communications
Tel: 020 7920 3150



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

END
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