City & finance In brief
■ Swift steps in as British Airways finance head British Airways has appointed Nick Swift as chief financial officer. He will move from the same role at transport firm Go-Ahead Group next March, replacing Keith Williams, who will become BA chief executive when the airline’s merger with Iberia is completed in January. A vote on Monday by both airlines’ shareholders is expected to rubber-stamp the merger.
■ Opodo directors poised to buy company The directors of online travel agency Opodo are believed to be in talks about a potential £400m management buyout. Opodo’s owner, Technology firm Amadeus, has been looking to sell the OTA since August. A management buyout is one option, while private equity firms are also believed to be looking at buying the business.
■ New accounts bolster Avis Europe’s income Avis Europe’s rental income rose 4.5% in the four months to the end of October, compared with the same period in 2009. The company said its UK business was benefiting from winning several new accounts over the past 18 months.
■ Dart increases shareholder dividends Jet2 owner Dart Group is to pay a dividend to shareholders of 40p per share for the half-year ending in September 30. The dividend will be paid in January 2011 and is an increase on last year’s dividend of 36p. Pre-tax profits jumped 38% for the six-month period. ■ Jet2 load factor rise boosts profits, p24
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‘Big two’ to face dipin2010 profits
Rob Gill. TUI TRAVEL and Thomas Cook will lay out their strategies for 2011 next week as they announce their full-year results. Both companies have admitted that the results will be “at the lower end” of city analysts’ expec- tations, due to the ash cloud, general election, World Cup and good early summer weather. Cook unveils its results on December 1 for the
year to the end of September, while Tui’s results will follow the next day. Analysts expect underlying profits, excluding
one-off costs such as those caused by the ash cloud, to be similar to last year’s, but pre-tax profits are likely to fall because of higher interest payments following refinancings this year. Pre-tax profits were lower than underlying
Last year’s financial results
Thomas Cook (2008-09) Revenue: £9.3bn Operating profit: £415m Underlying pre-tax profit: £308m Pre-tax profit: £56.1m
Tui Travel (2008-09) (results restated in October 2010) Revenue: £13.9bn Operating profit: £401m Underlying pre-tax profit: £324m Pre-tax loss: £94m
Holidaybreak results to be level pegging
HOLIDAYBREAK, OWNER of Explore, Superbreak and PGL holiday camps, is expected to announce static figures when it precedes Thomas Cook and Tui Travel with its full-year results on November 30. Nick Batram, leisure analyst with KBC Peel Hunt, said he expected Holidaybreak’s profits to be “broadly flat” in comparison with last year’s, when its operating profit was £28.6 million. “We will see strong performance from the
16 26.11.2010
education division,” he said. “The camping sector is resilient and a consistent performer every year. “There could be some weakness in hotel
breaks due to a shift in product mix. But Super- break has sold well through agents, compared with online. Superbreak has a good reputation with the trade because its gets decent prices and good commission rates.” Batram said that Holidaybreak was “streets
The camping sector’s resilience has helped Holidaybreak
ahead” of Tui with its education division. “PGL is a very successful operation while Tui’s
efforts in education have been pretty limited,” he added.
profits for last year because of merger cuts, In recent surveys, analysts expected an underlying operating profit of around £450m for Tui, and about £400m from Cook. Nick Batram, leisure analyst with KBC Peel Hunt, said: “I’m not expecting any shocks next week. Both companies will probably talk about cutting costs and repositioning their products.” But Tui provided one shock last month when it announced a £117m black hole in its accounts due to a problem with its computer booking systems going back at least seven years. These losses have already been accounted for
by restating last year’s results so will not affect next week’s numbers. Tui chief financial officer Paul Bowtell resigned over the issue, but is continuing in the role until the end of the year. “Having dropped the ball, I think Tui will talk about its financial robustness,” said Batram. Douglas McNeill, an analyst at Charles Stanley Securities, added: “It is important that Tui is able to reassure the City about its financial reporting.” The big subjects on Cook’s agenda include
the retail merger with The Co-operative Travel plus plans for an expanded online travel agency. “There should be some uplift for the big operators next year, as you are unlikely to see this year’s combination of events hitting again at the same time,” said Batram. “They should also benefit from smaller op-
erators’ struggles. Banks are tightening payment terms, which will not help small companies.”
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