MYT shares jump almost 30% in one day.

[MissChief]

And it looks like the banks are really interested in MyTravel as a long-run successful travel business. Talk today of financing to 2006. And yet...the knives are out and people from the competing companies all seem to feel threatened. So let's celebrate some good news, or at the very least some good rumours.

[Colonel Klink]

Isn't it a nice change to hear that banks or inverstors are taking the long term view that MYT is a sound business and a good investment, with a future? It was an excellent business before the accounting debacle, built up over many years of public confidence by Crossland and will now hopefully be that again. Maybe change the name back again?
Good luck to all the pilots whose jobs are now hopefully safe!:cool:

[BAe 146-100]

Hi,

I'm really pleased for MyTravel. They are one of the best Uk charter airlines. :D.

Thanks
BAe 146-100

[Pub User]

The shares I bought a couple of weeks ago are up by 70% !!

I started dabbling with shares in 1979, and that's easily the best short-term rise I've had. If they rise a bit more I may even be able to afford a holiday.

[beardy]

Let me know when they are back to 250p. I might then be back in the black.

[javelin]

Well, let's hope that the Mail on Sunday gets the story correct this week and publishes the upturn in their trading :hmm:

[WhiteDevil]

hiya,
exactly how would one go about buying shares in an airline? I would like to have a small investment somewhere for later life, but can sell off if needs be :)

[Youwererobbed]

Fingers crossed it is good news and pilots jobs are safe, but don't get carried away yet.
The only reason that some sort of financial backing is being considered is because the debt of MyTravel is so large that the banks will make more money from the debt interest payments than seeing the company go bust. The other slightly more interesting part of this is that the value of the company as a whole (basically share price X No of shares plus cash reserves) has to be greater than the sum of it's liabilities (the cost of getting holiday makers home if it goes bust) for the CAA to be able to isssue a license to operate as a tour operator. This was clearly not the case a few weeks ago and the CAA would have had no choice but to suspend MyTravels license when it came up for renewal (bet that this renewal is due in the next 6-8 months). The banks that provide the capitalisation aren't daft and will obviously artificially lift the share price to ensure that company value exceeds liabilty. That is exactly what is happening now and what will continue to happen for the next few months till license renewal.
This has coincided with broker comment that the major carriers may be at the bottom of the slump (war over, SAR possibly under control, oil price drop etc etc).
So short term, 2-3 years MyTravel will probably be OK. Long term they have no chance of survival, as soon as the amount of debt is reduced enough that the banks own debt is not effected then all support will be taken away and the company will collapse. This doesn't have to mean massive job losses, more likely a take-over from another source.
The problem for MyTravel and the supporting banks is to keep share price above liability levels for the long term.
Who in this industry can look further than 2-3 years ahead? Even BA has problems (similar vein to MT in that the banks can't afford for BA to go bust), the Low Cost are expanding much too quickly (this is the most common form of company problems) and facing stricter regulation from EC. When Easy and Ryan have to provide compensation and/or hotels for flight cancellations or delays then they will find it much tougher to compete.
So MT may not have along term future but who does at the moment...at least it's not more bad news.
The trick to survival at the moment is to owe so much money to the banks that if you go under the bank goes under. Strange world we live in.

[fmgs]

So, Youwererobbed, what you're saying, in effect, is that other operators are in even bigger trouble? :hmm:

Thank-you for confirming what the MT people have been saying.

Won't be long before the press discover that there's an even bigger story waiting to be told, about those other operators, then.

[U/S President]

Youwererobbed: If MyTravel didn’t meet the financial criteria for its licence, the CAA would revoke it straight away and at any time. So you theory that “this renewal is due in the next 6-8 months” and that the banks “will obviously artificially lift the share price to ensure that company value exceeds liabilty” at that point in time is wrong.

The share price is rising on the back of good news concerning MyTravel’s sales for Summer 2003 and the fact that no more accounting errors have been found, as some investors feared. (And given that Deloitte & Touche, Ernst & Young and PricewaterhouseCoopers have all been over the books with proverbial fine-tooth combs, there really shouldn’t be any more errors).

Unbelievable, how some people can put a negative spin on any piece of news. Last week it was the Mail on Sunday saying that because the banks had requested MyTravel change its hedging policy for Summer 2004, it meant the “that the banks will not keep the company running after this summer” (article (http://www.thisismoney.com/20030427/nm62216.html)). And now we have Youwererobbed saying that “as soon as the amount of debt is reduced enough that the banks own debt is not effected then all support will be taken away”. Come on.

[kinsman]

Youwererobbed

Not sure your analysis is correct! Banks can no more influence the share price than we can, look at some of the banks own share prices over the last year or so. It is a question of confidence in the market and at the moment there is not very much of that around. MYT’s share price should be around 80p but for obvious reasons this is not the case at the moment!

The debt mountain is not really that big in real terms, £450 – 500 million, TUI has a 500m bond not to mention another 4-6 billion of outstanding debt, given your reasoning the CAA should pull their bond in the UK now as they are valued at 2.5 billion on the German stock exchange. MYT's Off book debt leases etc are relatively short term and covered by day too day operations. If the refinancing goes ahead the share price will rise to around 60 – 80p, I hope! In the short term I expect to see the share price drop again next week as some investors make a few quick bucks. Then again if I were that good at predicting share prices I would not have lost so much money last year!

The CAA bond is not really an issue, if we don’t get the financing in place it is game over at the end of the summer. If the financing is put in place and with the current figures I can see no reason for it not to be, then the share price will rise and our debt is reduced (convertible bonds) and many of our problems start to go away! Banks are in the business of lending money and as long as you can keep paying the interest and have cash flow they will be only too happy to lend it to you. They stand to make 12 million in interest charges this year from MYT!

The hedging situation the Mail made such a big deal over is a bit of a non-story as those who hedged at the beginning of the year may catch a cold. When the financing issue is dealt with then I have no doubt MYT will hedge against next year. Delaying this process may prove to have been a good move, granted a case of serendipity.

The company is proving it is a sound business and can continue to operate even with all the bad press. The future looks much better than it did a few months ago but I am bracing for another round of bad publicity from the press, they hate good news these days so they like you are bound to look on the black side and play down the good news!

Put in perspective look at the debt some of our competitors have and no one is suggesting they are about to go bust! MYT’s biggest problem has been the management that were running the company until last year and the connection to the ENRON scandal, which drove down our share price. The debt can be managed if the banks feel the company is basically sound, which it appears to be. I am confident the worst is behind us as long as the refinancing goes ahead.

The bottom line is that a good portion of our debt is due to the low share price; if the share price rises then a good part of the debt ceases to be an issue. The share price will rise if the financing is put in place and the company continues to perform and make money. Even under the old management they managed to turn a good profit every year except last year. Had the old board run the company as it is being run now then our share price would still be around £5 and I would be a lot better off than I am now!

[Youwererobbed]

U/S President the tour operators license isn't revoked immediately or can be revoked during the period of issue. It's only when a company comes to renew it's license that the CAA looks up it's worth against liabilty.

I hope it is good news, but MT has massive problems that are nothing to do with the airline part of it's operation. Air Europe (remember them?) was the same and eventually it disappeared. The accountancy review isn't good news rather a lack of more bad news that there isn't anything worse being hidden from the investors.

Unfortunately the banks have no reason to keep MT running other than to reduce their own liabilities, as soon as that happens they'll be off. Bankruptcy may be the only answer in the long term but for now it would serve no purpose to the banks hence the desparate need to keep the company up and running which it can only do with the rubber stamp from the CAA.

Remember at one time ( 4 weeks ago) the whole of MT was worth about £47 million (yep that is million)....not much security there for the big boys to invest..why do you think that they have decided to restructure the firms finances? Maybe because the airline/tour industry is a good long term bet...ummmm...or maybe not.

This is all about the guys in the city trying to minimise the losses as best they can over the next few years.

If you owe the banks millions you're in trouble......if you owe billions then the banks are in trouble. Thats how it works.

[kinsman]

Youwererobbed

Banks make money by lending money! We do not owe the banks big money at least not in banking terms! They are making a lot by supporting us, they will continue to support us as long as we service the debt and they are making money out of us.

If the tour operation were not viable the CAA would pull the bond make no mistake! We must of course meet the bond requirements to renew it at the end of the year that is rather stating the obvious but that should not be a problem for the reasons I gave earlier.

MYT is a very different set of problems to ILG; to draw parallels is really not appropriate or correct!

I am pleased to see some good press reports appearing today, I hear there is even a nice one in the Sun!

[U/S President]

Indeed there is a positive article in The Sun (http://www.thesun.co.uk/article/0,,9-2003201129,,00.html).

The article ends with: “This is excellent news. It was heartbreaking to see a firm like MyTravel - which is important to so many Britons - in the state it was in. Hopefully it can now be saved.”

And most of the more reputable papers also carry positive MyTravel stories:

The Telegraph (http://www.telegraph.co.uk/money/main.jhtml?xml=%2Fmoney%2F2003%2F05%2F03%2Fcntrav03.xml)

The Times (http://www.timesonline.co.uk/article/0,,5-667255,00.html)

The Guardian (http://www.guardian.co.uk/business/story/0,3604,948383,00.html)

[bijave]

Do MYT hire ? If so, on which type of aircraft ?

Thanks.

[Alberts Growbag]

From Yahoo Business News May 3rd.




MyTravel bookings drop

LONDON (Reuters) - Package holiday firm MyTravel Group, battling to recover from profit warnings and accounting errors, has reported a drop in summer and winter bookings but sees signs of recovery as war in Iraq ends.


The firm, formerly known as Airtours, also said a review of the value of some of its assets was likely to lead to a "significant" impairment. It added it was making progress on a proposed extension of its credit facilities.


The Iraq conflict has hit bookings for holiday firms across the world, putting further pressure on a sector that was already suffering from an economic downturn and the aftermath of the September 11, 2001, attacks on the United States.


However, MyTravel (LSE: MT.L - news) has fared worse than most because it had previously ramped up capacity in a bid to capture market share. This left it committed to high fixed costs and having to cut prices on unsold holidays when the market turned down.


The group, which has changed its chairman, chief executive and finance director in recent months, has embarked on a strategy to cut costs and has announced over 2,000 job losses over the last year. It employs over 20,000 staff worldwide.


Group winter bookings were four percent behind last year, in line with capacity reduction, and summer bookings were three percent down, MyTravel said.


"While current trading conditions continue to make it difficult to comment with any certainty on the outlook for the rest of the year, bookings over the last two weeks, particularly in the UK, have been encouraging," Chief Executive Peter McHugh said in a statement.


MyTravel , which is in financing talks with its banks, also said it had proposed extending the maturity of all senior credit facilities to May 2006.


Shares in MyTravel, which have plunged over 90 percent over the last year, closed at 11.20 pence on Thursday. The company has a current stock market value of around 56 million pounds.

[willoman]

It is worth reading the article on MYT in todays Business section in the Sunday Times. It would appear that MYT are adopting a smoke and mirrors approach to present financial difficulties- quote ' Something doesn't feel quite right about MyTravel and the announcement it made on Friday' unquote.

The article centres on MIPS (minority-interest preference shares ) - these originally appeared as equity on the company balance sheets. They have now been transferred to debt rather than equity as a result of '' modifications to the arrangements relating to the MIPS ''

Peter Mc Hugh, chief executive of MYT, declined to say why this had occurred.

Hmmmm....

Final quote from the article - 'Mc Hugh and the MyTravel team should be nervous'

[A4]

Willowman

"The article centres on MIPS (minority-interest preference shares ) - these originally appeared as debt on the company balance sheets. They have now been transferred to equity rather than debt as a result of '' modifications to the arrangements relating to the MIPS ''

I think you mean the other way round. They USED to shown as equity, they are now shown as debt. If anything this is making MYT's accounts more transparent than "smoke and mirrors".

A4

[cargo boy]

Sorry to be the bearer of not so good news but this has also been reported in the Mail on Sunday today:The finance director of Airtours has quit, dealing a fresh blow to its parent company, troubled tour operator MyTravel.

Kenton Jarvis has accepted an offer from rival holiday firm Thomson. 'We are sorry to see him go,' MyTravel chief executive Peter McHugh said. He added that he was 'very conscious' of the need to retain key management staff as MyTravel grapples with its financial problems, but he declined to give details of any additional incentive schemes that might have been put in place to prevent poaching by competitors. Friends of Jarvis said he had become increasingly disillusioned as MyTravel lurched from one crisis to another.

Jarvis is the latest in a series of senior executives to quit. MyTravel has already changed its chairman, chief executive and finance director after a disastrous 2002 when it was laid low by accounting scandals and profit warnings. It is cutting 2,000 jobs. On Friday it announced further amendments to its accounts, which saw debts increase by £210m. The shares are trading at 14p, valuing the firm at £69mNo doubt another blow to morale for the crews and other employees. No point in shooting the messengers though as they are only reporting the desertion of Jarvis.

[carlos vandango]

This guy quit to go to Thomsons? Frying pan and fire spring to mind. What a tangled web the IT industry weaves.:confused:

[U/S President]

It would appear that willoman has a reading age somewhat less than the average primary school child :sad:.

To quote willoman: “They have now been transferred to equity rather than debt”.

To quote from the original article that willoman was trying to read: “they will now be treated as debt instead of equity”.

Spot the difference?

I was going to suggest he purposely misquoted the article to put MyTravel in a bad light, but that would probably lead to accusations that I’m paranoid :ugh:.

You can read the article here: Sunday Times (http://www.timesonline.co.uk/article/0,,2095-667782,00.html). But you’ll need to register for a free username.

[willoman]

I apologise for my misquote over debt/equity but that does not change the emphasis of what was a fairly damning report from the Sunday Times.

I wonder if Jarvis's departure was influenced by the ongoing financial alterations occurring at MYT.

If you had a few spare quid, would you purchase MYT shares ? - I certainly wouldn't.

[kinsman]

Well someone bought a few shares at the end of last week willowman!

However, the article does make interesting reading. I am not sure I would call it damming! It raises a question or two for sure but as far as I can see the MIPS should never have been treated as an asset, so if anything this is making matters more transparent rather than less.

With the level of scrutiny the banks have applied to MYT over the last few months I can only assume they are happy with the situation if they are continuing to move towards refinancing in June. As for the CAA, if the finance is put in place in June they will renew the bond at the end of the year and breath a sigh of relief!

I wonder how many travel companies these days meet the CAA rules? My guess is none of the major players!

[U/S President]

The article isn’t damning but it is rather stupid nethertheless.

The thrust of the journalist’s complaint is that some preference shares issued by MyTravel are going to be treated as debt rather than equity from now on, as part of the company’s commitment to put it finances in order. The journalist complains that MyTravel haven’t given sufficient reason for the change but then says “In what way, exactly, should the MIPS ever have been treated as equity?” - thereby answering his own query.

The journalist then goes on to speculate that, come November, the CAA will revoke MyTravel’s ATOL because they will have “hardly anyone overseas” so it’ll be cheaper to repatriate customers than doing it in the height of the summer. This argument makes no sense: if the CAA were sufficiently worried, it would revoke the ATOL now before the summer season properly starts.

The article ends with “You can buy one of their cheap and cheerful winter packages to Corfu if you want, but I’m sticking to Center Parcs in Sherwood Forest”. Now, I’m not saying that newspapers should go out of their way to encourage people to take holidays abroad because I know the British tourism industry needs customers too, but is it really the place of the Business Editor at a broadsheet paper to weave this kind of personal opinion into a Business article? And if he thinks that all the MyTravel Group sells is “cheap and cheerful” packages to Corfu then he really hasn’t done enough research. With tour operators like Tradewinds, Bridge and Cresta in the portfolio there’s a lot more to MyTravel than the bucket and spade brigade.

[kinsman]

On a lighter note the author of the article clearly knows little of the travel industry, as we don’t go to Corfu in the winter. Then again he clearly does not rate our competitors, as he seems to think the only other option to an MYT holiday is to stay at home!

[Knifedge]

So, it's 9:45 on Tue morn, and another rise in share price.

It's a funny old world, but if you believed in the product, and showed it by buying shares, there is the potential to have doubled your money in two working days.

If those of you with doubt put as much energy into supporting a company as you did in constant put downs MYT is not the only company that would benefit.

Too many of you speak a bad game on the back of trumped up self belief and importance. You have absolutely not contact with facts or indeed the real world.

Stop.


Life is best viewed with a vertical horizon.

[driftdown]

WhiteDevil

Try www.share.co.uk for share purchasing.