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Tui finance chief quits as £88m hole revealed

Tui Travel finance chief Paul Bowtell has quit after an audit revealed £88 million of “irrecoverable balances” that would have to be written off.


A statement today said the £88 million was relating to the integration of IT systems in its UK mainstream business.


This is in addition to an initial £29 million originally identified – giving total write-offs of £117 million.


“These have arisen as a result of failures to reconcile balances adequately in legacy systems in the retail and tour operator businesses in Tui UK,” the company said.


“As a result, Tui Travel now believes it is appropriate to restate its results for the year ended 30 September 2009.”


The company said Bowtell had decided to resign after discussions with chief executive Peter Long. He will leave at the end of 2010.


Long said: “It is now clear that at the time of merger there were weaknesses in the legacy systems we chose to use in the Tui UK business. 


“Despite the fact that this situation had built up over a number of years, Paul is behaving honourably and I am disappointed that he will be leaving the group. 


“I have specifically asked Paul to remain with the business to see through the full year audit and production of our preliminary results.  I will miss working with him and wish him every success for the future.”


The statement added: “As a result of process improvements during the year, the impact in 2010 has been limited to £5 million, in line with the third quarter statement.


“Accordingly, Tui Travel remains confident that full year results for the year ended 30 September 2010 will be in line with previous guidance and that net debt will be lower than previous guidance.”


A “full and detailed review” of systems and processes has now been conducted and the company said it was satisfied that the weaknesses in the systems have been rectified.


Tui UK is now under a new leadership team of Johan Lundgren, managing director Northern Region and Colin McKinlay, who joined on October 1 as finance director from Homeserve, where he was UK finance director and prior to that gained extensive experience within the travel industry.


The company added that stronger recent trading trends highlighted in its last trading update have continued.


The company’s preliminary results for the year ended September 30 are to be released on December 2.


 

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