Greece, oil prices and services dispute blamed for Minoan profit warning

Greece, oil prices and services dispute blamed for Minoan profit warning

The Greek financial crisis, a dispute over back office services and the impact on business travel caused by plunging North Sea oil prices have combined to trigger a profit warning by Minoan Group.

The Scottish-based travel organisation’s attempt to win final approval for a resort in Crete has been held up by the financial turmoil Athens.

It was hoping to gain the green light for the project by April but this has been delayed.

Minoan said in a trading update: “In the hope that the agreement between Greece and the EU/members of the eurozone will now be ratified by the Greek parliament, the group has been advised that normal government procedures will resume shortly thereafter.”

The company added: “As can be imagined, the long-running situation in Greece and, tragically, recent events in Tunisia have also had an impact.

“In addition, there has been a dispute with our back office services provider relating to cash settlements, which has now been resolved.

“The effect of this on our profitability means that the group's results for the current financial year will no longer meet current market expectations but are expected to be in line with the previous year.”

The underlying performance of the group's travel division has continued to improve with gross sales up by 15% and commissions up by 17% in the current financial year.

“This is despite difficulties in Aberdeen relating to the oil price, which have had a detrimental effect on the performance of our corporate travel division,” Minoan said.

“This will be ameliorated going forward by the recent acquisition of other non-oil related corporate customers.”

The group added: “As these items are all one-off, we do not believe they will impact upon trading in the financial year ending 31 October 2016 and accordingly we believe that market expectations for this period remain valid.

“Nonetheless, the group is continuing to pursue a number of opportunities about which we will update the market and shareholders when they are concluded.

“The board is confident that the group's travel division will bear significant fruits in the coming year.”

The group’s interim results are due to be published at the end of the month.

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