Friday, September 10, 1999 Published at 08:14 GMT 09:14 UK
Business: The Company File
Thomson holidays slump
Last-minute summer deals and Millennium packages fail to attract customers
Thomson Travel has issued a fresh profit warning, saying its full-year results will be significantly below the expected level.
The announcement alarmed the City, as it was the firm's second profit warning in a matter of weeks, and shares slumped in early trading. At 1130 GMT, they were down 21 pence (16.8%) at 104p.
The British travel group blamed problems with selling last-minute summer holidays and a lack of demand for Millennium breaks.
Only in July, the company announced the resignation of its chief executive, Paul Brett, and that it was braced for a fall in annual profits because of the Kosovo crisis.
Selling holidays "difficult"
The chairman, Michael Brown, said the market in the UK for last-minute summer deals was "substantially more difficult than last year".
The group had already been forced to increase its discounts on late holiday and Millennium deals in a bid to attract customers, he said.
While margins achieved in the UK on July and August departures were consistent with those forecast at the time of Thomson's last trading update in July, demand for September and October had "weakened significantly".
Mr Brown said demand for holidays over the Millennium period had also slumped: "As a result, the group is unlikely to achieve the level of profits previously expected for the Millennium period.
"In the light of these market conditions, the board now expects that group profits for the year before tax and goodwill amortisation will be significantly below the level expected at the time of the trading update in July."
Thomson's fresh profit alert came as the group unveiled a first half pre-tax loss of £5.1m for the six months to 30 June, compared to a £5.7m profit at the same time last year.
Including a £3.8m goodwill amortisation charge, the loss widened to £8.9m.
Thomson's eight acquisitions during the period helped push turnover up 25% to £1.4bn, from £1.1bn last year.
Shareholders are to receive an interim dividend of 0.75 pence a share.
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