Travelzest sees half-year profits plunge by 71%

Travelzest has warned it might not meet its Board-¬™s expectations due to -¬---exceptionally difficult trading conditions-¬~ in the UK.

Its half-year profits have dropped by 71% to -£400,000, following UK restructuring costs of -£1.6 million.

-¬---Given 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.

-¬---We remain optimistic about the medium and longer-term prospects for the group despite the difficulties in the UK in the current year.-¬~

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.

-¬---This decline reflects both a decrease in overall sales and reductions in our offerings to certain destinations,-¬~ said Travelzest.

It said it would continue to invest in new technology and would widen its hotel and air product in the second half.

-¬---New bank facility remains under negotiation, with an anticipated completion, assuming continued successful negotiations, of September 2011,-¬~ it added.

Travelzest is still in discussions about a potential takeover bid but said there is -¬---no certainty the talks will result in an offer being made-¬~.

By Bev Fearis