Published on Monday, July 25, 2011

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

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