Kuoni's profits fall after bill for First Choice bid hits £11m

Kuoni's profits fall after bill for First Choice bid hits £11m

KUONI saw profits tumble in the first six months of the year after the operator revealed it spent £11.2m on its failed bid for First Choice.

The enormous cost reduced profits for the six months to June 30 from £11.7m to just over £500,000. It compares to a £14m profit over the same period last year.

Kuoni launched its bid for First Choice in April and finally pulled out in July when shareholders rejected the deal in favour of a possible rebid by Airtours.

Despite the bid costs, the Swiss company was adamant it would post record profits for the year end and predicted double-digit growth.

Chairman Daniel Affolter said the UK has performed well in an unpredictable market.

"Despite a volatile environment, UK and North America managed to further expand market share," said Affolter. "The merger project with First Choice caused a particular stir among the British public."

He said organic growth and the acquisition of long-haul operator Voyages Jules Verne in January helped increase its turnover by 25% to £150m while the market as a whole only increased by 4%.

"We predict record year-end profits provided there are no unexpected developments," added Affolter.

He issued a word of caution however by pointing out that the 'difficult environment' had forced Thomson to revise its earnings forecasts.

Kuoni's Swiss operation increased turnover by 9.4% to £151m with its other European businesses growing 26.7% to £175m.

Turnover in its business travel division, which has operations in Germany, Austria and Hungary, dropped 4.9% to £33m.

Meanwhile, Voyages Jules Verne and Airwaves are expected to expand into new offices in Dorset Square in London.


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