A POTENTIAL merger between Kuoni and First Choice now appears unlikely following the resignation of Kuoni chairman Andreas Schmid.
Schmid resigned after a “fundamental difference of opinion with the board on issues relating to the management of the company”, believed to be caused by his determination to pursue a merger with First Choice.
It is claimed that he failed to inform chief executive Armin Meier of merger talks until a very late stage, having already secured himself the chairmanship of the merged company. Kuoni refused to comment on the allegations.
Talks between the companies have been suspended and, with Schmid’s resignation, industry observers now believe a deal is unlikely, certainly under the arrangement Schmid proposed.
“If the chairmanship was to come from Kuoni then it would have been a First Choice-led business with a First Choice chief executive,” an expert said.
“It seems unlikely Kuoni would want to give up control. Ownership for the Swiss is much more important than it is for the English.”
Meanwhile, Kuoni’s UK division’s year-on-year bookings were up by 2% for the first six months of the year. Turnover rose by 1.9% to £138 million, although pre-tax profits reduced from £10.2 million to £9.7 million.
The UK figures include a small North American business. Managing director Sue Biggs said she was “happy with the performance against the backdrop of difficult trading circumstances in the UK”.
She cited the recent spell of good UK weather and political problems in the Middle East as having hit long-haul holidays due to price reductions in the short-haul market.
The Maldives, Thailand and Mauritius are performing well while Sri Lanka, Egypt and the US are taking longer to recover, Biggs added. Direct sales in the UK have hit 54% following the introduction of online dynamic packaging booking technology Wizard DIY.
Overall, group turnover increased by 11.2% to £755 million with gross profit up 9.4% to £160 million. Gross profit margins declined from 21.5% to 21.2%.