Travelzest profits up after UK downsizing

Travelzest profits up after UK downsizing

Moves by Travelzest to reduce its UK operations to focus on business in Canada has helped boost profits as it seeks further disposals.

The travel group, which sold subsidiary Fair’s Fare in May, saw winter half-year pre-tax profits come in at £1.9 million against £400,000 in the same time the previous year.

Travelzest said the sale process continues with the field narrowed to a small number of preferred parties.

“Due diligence is underway with those parties,” said the company, which runs brands such as VFB Holidays, Best of Morocco, Captivating Cuba, holidays.co.uk and flight.co.uk.

Canadian businesses contributed revenue of £15 million, up by 1.8%, out of a reduced total of £18.8 million. This was down by £1 million over the equivalent six months in 2010-11.

Travelzest continues to drive online growth in Canada through its itravel2000 and The Cruise Professionals brands.

But, looking forward, the company said: “Our small UK operations are finding market conditions challenging with our advanced bookings down 42% reflecting weak demand and the sale/closure of certain UK businesses.”

Chief executive Jonathan Carroll and non-executive chairman Nigel Jenkins said in a joint statement:  "The group's Canadian operations continue to perform well and our efforts to reduce and control costs over the long term have enabled us to significantly increase our profitability.

“We will continue to drive the Canadian operations and will build on the strong platform we have created which we believe will benefit the wider group.”

They added that actions taken to lower operating costs and reduce the group's presence in the UK have improved profitability despite declining revenues.

“We have now substantially reduced the Group's UK activities with the sale of JMB Travel, Travelzest Holidays and Fair's Fare and the closure of Tapestry Collections.  As a result of these actions, the group now has a lower risk profile.”

They said Canadian operations, in particular itravel2000, have performed well in the first half of the financial year.

“These operations continue to excel but face pressure on margins due to price competition,” the joint statement said.

“We remain confident about the prospects for the Canadian operations and believe that is where we are going to drive future growth.

“With this in mind, we will continue to develop the brands we have in Canada and focus on continuing to improve the group's profitability.”

The group's current banking facilities expire in June 2013.

“If a sale of the group has not been completed prior to autumn of 2012 the group anticipates beginning discussions about new banking arrangements in the autumn of 2012,” it said.

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