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MyTravel cuts UK losses
MyTravel’s UK operating loss has been reduced by 48% to under £30 million in the year ending October 31.
The group’s overall operating profit was up by £42.3 million to £55.2 million in the period.
Group pre-tax losses were slashed from £153.4 million to £18.3 million.
The performance in the UK was aided by a 23% cut in capacity, including withdrawal from cruise operations, and the closure of 130 Going Places branches in the last year while growing online sales. New business-to-business and consumer websites are being launched this month.
Cutting UK capacity enabled 24% more holidays to be sold at brochure prices and a 12% increase in the average selling price, resulting in an operating loss of £29.5 million against £57 million the previous year.
A focus on cost control in the UK led to savings in selling and marketing, general and administration costs of £46.3 million.
MyTravel said average UK selling prices for winter 2005-06 in the charter business were ahead year-on-year and summer 2006 bookings “remain encouraging”.
Airtours Holidays’ bookings are 3% down for winter and up 11% for next summer while Going Places same store sales are up 7% since November 1.
“Overall in the UK, we have achieved better prices compared with previous periods as we have imporved the quality of our offering,” a group statement said. “However, margins are under pressure from the cost of fuel.”
Increased fuel costs weighed down the company, reducing the operating profit by a minimum of £47.3 million, according to chief executive Peter McHugh.
“Without the impact of fuel, we would have been a year ahead of our turnaround targets,” he said.
The group continues to target an operating profit in all divisions for 2006 and a margin of 3.5% in the UK in 2007.
The results come against a background of terrorist attacks and natural disasters. MyTravel revealed that the bombings cost the group £16.2 million in repatriation costs and lost margin – including £6.8 million for the UK division.
The company also had to evacuate 3,133 UK customers and 729 from Canada from the Yucatan peninsula due to Hurricane Wilma.
More to follow…
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