Event business decline drags Western & Oriental into red
Wednesday, 20 May, 2010
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The poor UK economy, airline industrial action and continuing riots in Thailand pushed specialist luxury travel group Western & Oriental into the red in the six months to March.
The loss was particularly attributable to a fall in events revenue due to the effect of the global financial crisis on certain industry sectors.
The group recorded a pre-tax loss of £0.9 million against a £0.2 million profit a year earlier.
Total booked revenue was up by 21.8% year-on-year to £27.4 million, with tour operating sales up by 29.3% to £21.6 million.
Some brands, notably Tropical Locations and Key2Holidays, saw growth in excess of 50% year-on-year, the group reported.
Chairman David Howell said: “Despite the challenging economic environment, revenue for the first half of the financial year, both on a booked and departed basis, was ahead of management’s expectations.
“Gross profit margins remain strong and overall costs are below expectations.
“This combination delivers an acceptable result in light of the prevailing market conditions for the seasonally weaker first half of the year.
“While the board continues to remain cautious in relation to the UK economy generally and recognising the effect of airline industrial action, the Icelandic volcanic eruption, the riots in Thailand, and an improved forward order book, the board anticipates progress in the seasonally stronger second half of the financial year compared to the first half.
“The group remains well placed to take advantage of longer term improvements in the travel and events sectors.”
He added: “The recent volcanic eruptions in Iceland and subsequent blanket UK airspace flight ban as well as airline industrial action and unrest in Thailand have had an impact on a small number of our customers that were in resort.
“We continue to clarify the costs of these events which will be shown as separately disclosed items in the full year results.”
by Phil Davies
Phil Davies
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