From FT.com
Mytravel drops as H1 losses widen
Former Airtours says not confident of year recovery By Ivar M Simensen FT Investor, 09:06 BST May 22, 2002
LONDON (FT Investor) - Mytravel dropped more than 20 per cent on Wednesday after the UK holiday operator formerly known as Airtours reported widening first-half losses and warned it was no longer confident of recovering the losses this year.
Shares of Mytravel [MT, News, Chart, Research] were 24.2 per cent lower at 170.75p in early London trade and rival First Choice [FCD, News, Chart, Research], the tour operator, dropped as much as 11 per cent to 105p.
"There's a lack of visibility in the industry and a lack of confidence in the stock," said Richard Finch of UK broker Williams deBroe.
After the effects of September 11 hit first-quarter earnings, the company said the recovery depended on a turnaround in family bookings at brochure prices, particularly for the UK peak season.
"To date, we have not recovered this shortfall and can therefore no longer be confident of recovering all the increased first-quarter losses," said Tim Byrne, chief executive.
The company said pre-tax losses in the first six months widened to £157m from £97.6m one year ago as group turnover dropped 17.6 per cent to £1.73bn.
Mytravel said it expected an improved performance in the second half but could not be confident of reporting full-year growth.
Credit Suisse First Boston cut its 2002 pre-tax profit estimate by 20 per cent to £117m after the results and put its recommendation under review.
"Germany is the joker in the pack and clearly the biggest long-term challenge, regardless of September 11 or not," said Mr Finch.
"It is difficult to be the number three player in an over-supplied market."
Williams de Broe rated Mytravel a 'hold' before the results and Finch said the stock was getting closer to a sell rating. "They have previously enjoyed a premium rating, trading at higher multiples than competitors, but the stock has clearly lost its shine," Mr Finch added.
Ivar Simensen is a reporter for FT Investor in London.
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