The travel and leisure division of Scottish-based Minoan Group suffered a slump in full-year profits due to a wide-ranging dispute which hit many parts of the business.
The division’s net profit almost halved to £233,000 for a number of reasons including a dispute with a back office services provider, the company disclosed today.
This led to a “completely unexpected” one-off cost of £410,000. Overall pre-tax losses increased from £1 million in 2014 to £1.6 million in the year to October 2015.
Reporting annual results, the company said: “This dispute affected numerous parts of the business including total transaction value, the restriction of our expected expansion into foreign exchange and an increase in costs.
“All these matters have now been successfully resolved.”
The company added: “Were it not for this the travel and leisure profit before tax would have shown a significant increase and the growth in total transaction value would have been even stronger.”
Minoan, which runs a series of travel businesses across Scotland, added: “The current year has started well with gross revenues up 16% despite the current widely reported problems causing a number of popular tourist destinations to suffer major reductions in bookings.”
Chairman Christopher Egleton revealed that Minoan is considering splitting its travel and leisure division away from a planned resort development project in Crete.
The travel and leisure arm’s expansion has been hampered by not being independent, he said.
Minoan reported that total transaction value for the year was up by 20% to almost £61 million.
Reviewing the year, Egleton said: “The travel and leisure division has performed robustly, expanding total transaction value and increasing gross profits.
“Our ‘buy and build’ strategy of integrating specialist travel brands remains central to the business and we see opportunities for further expansion to create value,” he said.
“Overall 2016 promises to be a transformational year for the group, with the prospects for both arms of the business looking very strong.”