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Midlands Co-op sales rise by 10%
TRAVEL SALES for the Midlands Co-operative have increased by 10% to £181m, according to the society’s half-year results. Midlands Co-op said its travel business had been boosted by a better foreign exchange performance and a recovery in business travel during the six months to August 7. Overall, its trading profit for the half-year period was up by 18% to £18.9m on the back of sales of £526m – an increase of 5% on the same time last year. Sales were boosted by strong performances from its supermarkets and funeral businesses. The society’s travel agencies will become part of the planned Thomas Cook/Co-op Travel merger.
In brief
■ IHG sees business traveller boost in US InterContinental Hotels Group has been boosted by the return of business travellers in the Americas region. IHG has seen revenue per available room increase by 6.7% for the third quarter between July and September. Occupancy rates across its brands in North and Latin America have also gone up by 3.8 percentage points.
■ UK travel firm insolvencies on the rise The number of insolvencies in the travel and leisure sector rose in September compared with the same month last year. Credit checker Experian said 113 travel and leisure firms went bust in September compared with 107 in September 2009.
■ $250m flotation on horizon for NCL NCL is set to go public after it announced its latest financial results this week. The cruise line’s parent company, NCL Corporation, has filed paperwork with US authorities to become a listed company and hopes to raise $250m through the flotation. NCL, which is based in Miami, made a net profit of $93m for the three months to the end of September – an 8.6% rise compared with the same period in 2009.
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14 29.10.2010
‘Missing millions’ takes toll on Tui
Rob Gill. TUI TRAVEL’S shares have partially recovered from the shock caused by the resignation of chief finance officer Paul Bowtell after the discovery of a £88m hole in its accounts. The operator saw shares fall 11% last Thurs-
day in the wake of the news – the company’s biggest daily fall this year. But Tui shares recov- ered some of their lost value in subsequent days. Bowtell resigned after Tui announced it had found another £88m in “irrecoverable balances”
The Bowtell effect Tui’s shares partially recovered after news of £88m hole
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Oct 20 Oct 21
in addition to the £29m it had already revealed in its trading statement in August. These losses were caused by problems with the company’s different computer systems following the merger between Tui and First Choice in 2007 but some of the losses date back even further. City analysts said this was a historic accounting issue but questioned why it took so long to identify the problem. They also raised concerns about the high num- ber of write-offs or “exceptional items” in tour operators’ accounts such as this year’s ash cloud, which has cost Tui £105m. Wyn Ellis, leisure analyst at Numis Securities, said: “It is a legacy issue but the problem in the sector is the number of large write-offs which call into question the quality of the earnings.” Mark Brumby, of Langton Capital, said it was
Thomas Cook Group (re-based) Tui Travel FTSE 100 (re-based)
“reassuring” that Tui’s blunder was historic. But he added: “One would have thought that
between the company’s auditors and the finance department they should have seen this earlier.” Tui’s £117m write-offs will not affect its annual
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results for 2009-10. The company has instead downgraded its results for the previous financial year 2008-09, with underlying operating profits being reduced from £443m to £401m. Bowtell will stay in his position until the end of 2010 to finalise the annual accounts.
RCL hikes forecast to $537m
ROYAL CARIBBEAN has increased its profits fore- cast for 2010 following a strong summer period boosted by better-than-expected late bookings. The world’s second biggest cruise company
says it is on course to make a net profit of $537m this year – $9m above its previous estimate. Royal Caribbean has been boosted by a 55% rise in profits to $356.8m for the three months to September 30 thanks to the strong late-booking market and lower costs. It made a net profit of $230m for the same period in 2009. Revenue was also up from $1.8bn in 2009 to $2.1bn this year while yields increased by 5.2%.
Chief executive Richard Fain said: “The economy is still tough, but even facing such headwinds our outlook is encouraging.” He added that yields for 2011 bookings were
currently above those for this year although he admitted it was “early in the booking cycle”. He said if this trend continued, the company would set a new profits record in 2011. Royal Caribbean should also enjoy a better
cash flow position as it launches fewer new ships in the next two years.
■MSC sees 110% sales rise for 2011, p18
020 7921 8011
rgill@ttglive.com
Rob Gill
Share price (p)
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