Specialist travel group Travelzest reported a 2010 loss of more than £12 million after a restructuring of its UK businesses.
The group reported a basic loss per share of 8.80p based on a loss of £12.769 million against a profit of £719,000 in 2009. The company ended the 12 months with net debt down to £8.8 million from £9.6 million the previous year.
As part of the group restructuring, the board decided to fully amortise the remaining goodwill of £11.3 million relating to the UK businesses.
“This decision was taken after reviewing the performance of the UK operations since they were acquired and the ability of the UK operations to generate improved returns in the near future,” a company statement said.
Underlying operating profit before these items increased by 11% to £6.1 million from £5.5 million. The growth was primarily driven by a strong performance by Travelzest’s North American operations.
The parent company of tour operating brands such as Best of Morocco, Peng Travel, Tapestry Collection and VFB Holidays, saw total transaction value increase by 15% to £217.6 million. Revenue was up by 14% to £43.8 million from £38.3 million.
The improved trading figures follow a period of structural change including the consolidation of UK operations with the number of offices cut from seven to three, with launch of a main hub in Cheltenham.
The company also launched luxury brand Travelzest Holidays to promote all merchant product through one distribution channel.
Chief executive Jonathan Carroll said the company was reviewing its financing needs for the next three years and had begun discussions with several banks in the UK and Canada “to identify the best commercial terms available”.
“Once in place, this new financing will put the group in a yet stronger position to capitalise on the market opportunities that we foresee,” he said.
Reviewing the year, Carroll said: “During the year we completed the largest part of the restructuring of the group. The tasks involved were not trivial and their completion within the time frame we set was challenging.
“We have completed in one year the consolidation of nine reservation systems to four, five accounting systems to one, and 10 offices to six.”
He added: “The Travelzest team has performed exceptionally well in a very difficult trading environment and has worked beyond expectations in restructuring and building a sound foundation for Travelzest to develop and grow in the future.”
Chairman Mark Molyneux said: “We are cautiously optimistic about our markets for the next 12 months. The UK economic climate is likely to remain difficult, with consumer confidence dented by public sector expenditure cuts.
“However, we are more positive about the Canadian economy, which accounts for a substantial portion of our North American activity. Here we see an improvement in consumer confidence, which we hope will be translated into new business for the group. As ever, the late booking market is important and we continue to focus marketing effort on this area.”
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