Published on Monday, July 25, 2011
Travelzest has warned it might not meet its Boardâ€™s expectations due to â€œexceptionally difficult trading conditionsâ€ in the UK.
Its half-year profits have dropped by 71% to Â£400,000, following UK restructuring costs of Â£1.6 million.
â€œGiven the difficulties inherent in forecasting in this industry and in these challenging economic times, there is a material risk the company will not achieve the board's current expectations.
â€œWe remain optimistic about the medium and longer-term prospects for the group despite the difficulties in the UK in the current year.â€
The company said its UK operations are struggling in an "exceptionally difficult trading environment that is affecting many tour operators".
As at 9 July, summer 2011 departures were down 57% year on year.
â€œThis decline reflects both a decrease in overall sales and reductions in our offerings to certain destinations,â€ said Travelzest.
It said it would continue to invest in new technology and would widen its hotel and air product in the second half.
â€œNew bank facility remains under negotiation, with an anticipated completion, assuming continued successful negotiations, of September 2011,â€ it added.
Travelzest is still in discussions about a potential takeover bid but said there is â€œno certainty the talks will result in an offer being madeâ€.
By Bev Fearis
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.