First Choice narrows losses
First Choice has credited its change of focus to long and medium haul holidays for the achievement of reducing its first half losses.
The travel group posted a pre-tax loss of £50.9 million for the six months to April 30, an improvement on a £55.1 million loss the previous half-year.
First Choice says long and medium haul destinations now represent 60% of capacity.
Chief executive Peter Long said: “In our mainstream holiday sector, we are focussed on generating higher quality earnings through the growth of medium and longhaul destinations, the reduction of shorthaul capacity, in particular flight-only sales and through the introduction of exclusive product, such as our Holiday Village concept.”
Mr Long outlined the details of the company restructure and said results would now be given per sector. Dermot Blastland heads the mainstream holidays sector, Richard Prosser oversees specialist holidays, Nigel Jenkins is in charge of activity holidays and Joan Vilà oversees online destination services.
The specialist sector performed the best, driven by success in Canadian and Continental Europe business. It posted the only profit before tax of the four sectors, of £1.9 million, up from a loss of £1.4 million year-on-year.
The mainstream sector posted a loss of £32.7 million for the half year, an improvement on a £34.5 million loss year-on-year. Mainstream was also in line with expectations for May and June, although Mr Long said the sector remained “challenging”.
Activity holidays lost £5.7 million in the half year, up from a £5.3 million loss. First Choice blames unprofitable ski revenues and acquisitions over winter including Trips Worldwide Limited (a niche UK operator specialising in South America), Caradonna Caribbean Tours (scuba diving) and The Adventure Company (US supplier of adventure holidays).
The online destinations sector posted a loss of £0.3 million for the six months to April 30, compared to a profit of £1.4 million year-on-year. First Choice said underlying trading was ahead for the period, but blamed the loss on investment in the sector including opening new offices.
In a statement the group added: “Online holiday bookings in mainstream holidays have increased by more than 100% in the first half. Given our experience to date, we believe that this is an area that will continue to grow substantially.”
At 10.19am First Choice shares were up one pence to 128 pence.
Report by Ginny McGrath
Ginny McGrath
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