First Choice’s pre-tax losses widens to Ł82.5m
First Choice Holidays posted underlying loss before tax of Ł82.5m (2006: Ł76.5m) due to higher financing cost resulting from increased spend on acquisitions in the six months to April 30. (6/15/2007)
The underlying pre-tax loss was up from Ł76.5m to Ł82.5m as the interest charge rose from Ł9.5m to Ł16m. The underlying operating loss fell slightly from Ł67m to Ł66.5m. Group revenues rose 5.9 percent in the half year to April 30, to Ł1.02bn.
There were seven strategic acquisitions in niche specialist segments made in the first half for a maximum consideration of Ł145.8m (2006: Ł94.9m). Specialist sectors underlying operating profit improved to Ł5.1m (2006: Ł0.2m) during the same period.
The results come at a stage when as the group moves closer to completing its tie-up with Thomson, part of Germany’s TUI travel group, which should lead to cost-savings of Ł100 million. The company, as per the information available, said that it expected margins to fall further in its main package holiday business, hurt by higher fuel costs for its planes and increases in taxes for customers.
On the results, Peter Long, Chief Executive said: “I am pleased with the first half trading performance in what has been a challenging market, particularly in the UK and of course an exceptionally busy period for the company. The recent acquisitions are performing very well and the pipeline remains strong.”
“It gives me great confidence for the future that we have such strength in depth within our management team that we have been able to pursue a large corporate transaction with TUI, complete the competition process whilst still delivering a good trading performance and integrating a number of acquisitions. Over the next few months this capability will be vital as we focus on delivering the results through the key summer period and completing the merger.”
The company shared that for Summer 2007 Mainstream Holidays Sector revenues are up three percent, with long-haul revenues and bookings up 26 percent and 21 percent respectively. Specialist Holidays Sector revenues and bookings are ahead of last year by 18 percent and 16 percent respectively, while Activity Holidays Sector revenues are up five percent on a like for like basis. Online Destination Services bednight bookings are 32 percent up on prior year and Laterooms.com bednights and revenues are up 73 percent and 78 percent respectively.