Wednesday, November 17, 1999 Published at 09:40 GMT
Business: The Company File
Airtours profits jump 12%
Airtours said next year's summer bookings were strong
Profits at tour operator Airtours jumped 12%, but it expects poor Millennium bookings to hit its first quarter results.
Many tour operators overestimated demand for Millennium holidays. Earlier this year, Thomson Holidays issued a profit warning, blaming lack of interest in the Millenium.
Airtours said bookings for next summer were already 29% up on this time last year, while bookings for winter 1999/2000 are 5% up on the same time last year.
Pre-tax profits in the year ending 30 September were £156.5m, compared with £140.3m a year earlier.
The company plans to pay a final dividend to shareholders of 6.6 pence a share. This gives a total for the year of 8.25p, an increase of 10% on last year.
Sales rose 23% to £3.77bn from £3.05bn.
"Over the past year Airtours expanded its existing operations, completed acquisitions and started businesses in new and existing markets resulting in a 20% growth in passenger volumes and expansion of geographic coverage," Airtours Chairman David Crossland said.
The company said finance director Tim Byrne was to become managing director on the retirement of Harry Coe.
First Choice bid
Airtours stressed that its failed bid for First Choice, which cost it £4.5m, did not affect its growth strategy.
Earlier this year, the European Commission blocked the company's bid for First Choice, as it would have left the UK market in the control of three firms.
Airtours has until 2 December to appeal against the decision.
The appeal process could take two or three years and cost the company £2m or more, some analysts said.
Whether or not it appeals, Airtours is planning other non-UK acquisitions, particularly in the French, Belgian and Dutch markets.
To this end, the company has amassed a warchest of £760m.
"We are not raising this just to put it in the bank, "Mr Crossland said. " We do have very considerable cash reserves and they are there to make strategic acquisitions."
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