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MyTravel says trading is worse than expected
MyTravel has admitted it is not performing as well as it had predicted just last month and is preparing to make further disposals.
The company said it had revised its expectations for its financial results for the current year and no longer believes that its summer performance will be better than last year.
Operating profit for the second half of the year will now be similar to that achieved during the same period last year, according to the company.
In a statement the company said: “This change in expectations arises principally because the margins achieved during the summer are lower than had been expected. This results from pricing decisions made last year in the UK, cost controls in the UK airline and difficult market conditions in Scandinavia and North America.”
It said: “Actions have been taken in the UK to ensure pricing and cost control actions going forward are more robust.” But it warned that in the medium term the Group’s earnings were subject to “significant risk through its high fixed cost structure and high levels of indebtedness and the Group will have to continue to manage its resources carefully.”
MyTravel said it has identified a number of businesses which could be sold, including a number of stand-alone US businesses. The company has revealed that it has just sold its Oasis Lakes holiday resort in Orlando to US firm Bluegreen Vacations for £15.1million.
Some of the pressure on MyTravel has been lifted with debtors agreeing that they can be repaid later than originally planned.
Bondholders have agreed in principle to be repaid by January 2007, three years later than previously arranged. The company hopes that this will give it enough breathing space to turn its poor performance around.
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