Travelzest suffered a 71% plunge in half-year profits after UK restructuring costs of £1.6 million and warned it may fail to meet expectations for the full year due to “exceptionally difficult” trading conditions.
The company's half-year pre-tax profits fell by £1 million to £400,000. Travelzest warned the results for the full year will depend on “what remains a challenging and unpredictable economic climate”.
In a statement, Travelzest said: “Given the difficulties inherent in forecasting in this industry and in these challenging economic times, there is a material risk the company will not achieve the board's current expectations.
“We remain optimistic about the medium and longer-term prospects for the group despite the difficulties in the UK in the current year.”
Travelzest confirmed it remains in discussions about a potential takeover bid, first disclosed in April. But the company said there can be “no certainty the talks will result in an offer being made”.
The group is also negotiating alternative banking facilities with a new lender and hopes to restructure its debt by September. It repaid £2.3 million last November and had a capital repayment due in May this year deferred by Barclays.
In a statement, it said: “The group has no reason to believe that further deferrals of the May 2011 capital repayment will not be forthcoming from Barclays between now and September 2011, or such later date that the alternative facilities are put in place.”
Travelzest chief executive Jonathan Carroll said: “Our restructuring is complete in the UK and, while we have experienced exceptionally difficult trading conditions, I remain confident of our ability to grow in this market. I am delighted with the progress we are making in growing our business in North America."
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