MyTravel in financial trouble
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Mytravel in the S$%t
From the BBC website
More than £300m ($466m) was wiped off the market value of MyTravel after the UK holiday company admitted there were problems with its accounts.
The company, formerly known as Airtours, is best known on the High Street for its Going Places chain of travel agents.
It warned investors that its profits could be £50m lower because of the accounting problems and a drop in sales.
I have... instigated a comprehensive review of our commercial activities and financial processes
David Crossland, chairman
The news sent the company's shares tumbling 82% to 13 pence, although by early afternoon they had crawled back to 25p.
It was the second time in two weeks that the firm had said its profits would fall below expectations.
After the last warning the chief executive Tim Byrne resigned.
MyTravel said that since that last trading update, on 30 September, "a number of additional matters have come to light".
Acounting hole
MyTravel said profits would be £12m lower than expected because trading in the UK at the end of this summer had been worse than anticipated.
And a further £8m would be wiped off profits because of a hole in the accounts.
MyTravel Group
MyTravel package holidays
Late Escapes holiday business
Going Places travel agents
MyTravel and MyTravel Lite airlines
North European and US travel businesses
As well as those amounts, the company said it might have to make revisions to accounting estimates.
Those revisions could take £15m-30m off profits.
The move comes days after corporate troubleshooter David James warned, in an exclusive interview with BBC News Online, that accounting errors were set to prompt a spate of "major crises" in UK firms.
In-house review
MyTravel chairman and founder David Crossland saw his 10% shareholding in the company fall on Thursday morning to about £6m from almost £40m the evening before.
He said he had instigated a detailed review of the group's commercial activities and financial processes.
MyTravel has appointed the head of its North American operation, Peter McHugh, as the new chief executive.
More than £300m ($466m) was wiped off the market value of MyTravel after the UK holiday company admitted there were problems with its accounts.
The company, formerly known as Airtours, is best known on the High Street for its Going Places chain of travel agents.
It warned investors that its profits could be £50m lower because of the accounting problems and a drop in sales.
I have... instigated a comprehensive review of our commercial activities and financial processes
David Crossland, chairman
The news sent the company's shares tumbling 82% to 13 pence, although by early afternoon they had crawled back to 25p.
It was the second time in two weeks that the firm had said its profits would fall below expectations.
After the last warning the chief executive Tim Byrne resigned.
MyTravel said that since that last trading update, on 30 September, "a number of additional matters have come to light".
Acounting hole
MyTravel said profits would be £12m lower than expected because trading in the UK at the end of this summer had been worse than anticipated.
And a further £8m would be wiped off profits because of a hole in the accounts.
MyTravel Group
MyTravel package holidays
Late Escapes holiday business
Going Places travel agents
MyTravel and MyTravel Lite airlines
North European and US travel businesses
As well as those amounts, the company said it might have to make revisions to accounting estimates.
Those revisions could take £15m-30m off profits.
The move comes days after corporate troubleshooter David James warned, in an exclusive interview with BBC News Online, that accounting errors were set to prompt a spate of "major crises" in UK firms.
In-house review
MyTravel chairman and founder David Crossland saw his 10% shareholding in the company fall on Thursday morning to about £6m from almost £40m the evening before.
He said he had instigated a detailed review of the group's commercial activities and financial processes.
MyTravel has appointed the head of its North American operation, Peter McHugh, as the new chief executive.
Last edited by Racing Snake; 21st Oct 2002 at 13:51.
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This would be the same David James that troubleshot Dan-Air and then saw them sold for a pound and still considered it a success is it? A success because he and his team AND the banks all got their share before selling the company down the river. How somebody as good as him could miss that wacking great tax credit still beggars belief.
Tell him to keep his damned nose out of my company.
Tell him to keep his damned nose out of my company.
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don't worry lurkio
......quote taken out of context, from another article, broadcast before the "hole" at MyTravel was discovered.
Nothing printed appears to connect DJ with MyTravel.
Nothing printed appears to connect DJ with MyTravel.
I wonder how many other UK Holiday companies will be revising their profit forecasts downwards. Surely it can't only be My Travel which is experiencing difficult trading conditions.
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Financial press report reads 'My Travel is likely to have to sell off one of its crown jewels, possibly the My Travel Airways charter airline with its fleet of more than 30 planes'. If this should transpire remember tupe.
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What will cause MY Travel's demise, IF it is going to happen, is two things. Passengers changing travel arrangements for next summer - worrying about MY still being able to "deliver." That will hit profits yet again, and will break a few straws on the way.
And the announced whopping "black hole" of £50m that Arthur Andersen's dodgy accounting practices have created, and spotted by Deloittes. No way back from that. It will break them if the shares don't lift above the pittance they are now. Know colleagues who have/had shares that were worth a bomb, now they are worth virtually bu@@er all! And, don't forget the pension fund, that will be a source of interesting specualtion in the next few days.
Better hope that David James doesn't get involved. But if he is employed by a bank or an administrator he knows his first job is to secure HIS substantial fee and what is owed to the employer who put him there. He even knows how to avoid letting Customs and Inland Revenue get in first - now that IS clever. He is ruthless, and that is being nice!
The airline industry has in many ways created it's own dilemma by it's incestuous growth, problem is then all about gearing the debts that follow. If I were a small airline now I would be making lots of noisy promises about next summer's traffic uptake.
Sorry FD drivers but you are going to have to sweat for a while, and the smell ain't gonna be none too sweet. But I do wish you well.
And the announced whopping "black hole" of £50m that Arthur Andersen's dodgy accounting practices have created, and spotted by Deloittes. No way back from that. It will break them if the shares don't lift above the pittance they are now. Know colleagues who have/had shares that were worth a bomb, now they are worth virtually bu@@er all! And, don't forget the pension fund, that will be a source of interesting specualtion in the next few days.
Better hope that David James doesn't get involved. But if he is employed by a bank or an administrator he knows his first job is to secure HIS substantial fee and what is owed to the employer who put him there. He even knows how to avoid letting Customs and Inland Revenue get in first - now that IS clever. He is ruthless, and that is being nice!
The airline industry has in many ways created it's own dilemma by it's incestuous growth, problem is then all about gearing the debts that follow. If I were a small airline now I would be making lots of noisy promises about next summer's traffic uptake.
Sorry FD drivers but you are going to have to sweat for a while, and the smell ain't gonna be none too sweet. But I do wish you well.
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city analysis - 18/10
In the "financial press" this morning(18/10) news is that the company, now worth just £140m, is "viable" until next March, when current banking arrangements need to be renewed.
Doubts were expressed about their ability to redeem a £220m convertible bond, due in March 2004. This forms part of the group's regulatory capital, necessary under Civil Aviation Authority rules for a licence to fly holidaymakers, and secured by "assets which are readily recoverable"!
However, it will almost certainly require some asset sales from MyTravel. Top of the list are Cresta and Leger, both of which may be subject to a management buy-out, and also TSI, the American Travel Agency bought in 2000 for £240m. Other suggestions include £100m from the sale of their freehold hotels.
Apparently, yesterday LunnPoly(TUI) took MyTravel brochures off their shelves, due to the uncertainty. Mind you, it is some time since I saw a MyTravel brochure in Lunn Poly anyway!
Doubts were expressed about their ability to redeem a £220m convertible bond, due in March 2004. This forms part of the group's regulatory capital, necessary under Civil Aviation Authority rules for a licence to fly holidaymakers, and secured by "assets which are readily recoverable"!
However, it will almost certainly require some asset sales from MyTravel. Top of the list are Cresta and Leger, both of which may be subject to a management buy-out, and also TSI, the American Travel Agency bought in 2000 for £240m. Other suggestions include £100m from the sale of their freehold hotels.
Apparently, yesterday LunnPoly(TUI) took MyTravel brochures off their shelves, due to the uncertainty. Mind you, it is some time since I saw a MyTravel brochure in Lunn Poly anyway!
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And, don't forget the pension fund, that will be a source of interesting specualtion in the next few days.
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And the announced whopping "black hole" of £50m that Arthur Andersen's dodgy accounting practices have created, and spotted by Deloittes.
The "black hole" is the creation of the directors. Period. They are the ones who are responsible for the accounts and sign them off as "true and fair".
The fault primarily rests with them.
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More than a touch naive if I may say so 10bob
The fact is that the downturn in business was not reported a fortnight ago and was forced by Deloitte's. This was as a result of Andersen's 'potential revision's.' What the directors sign for is that which they and the auditors agree to. It was in fact a method adopted by Andersen's in favour of Enron. The directors, therefore, were left with no alternative than to resign. A signature is laid on the company's accounts as a direct result of those which their auditors give them. Collusion might be a word to use, but who can tell? The dirtectors might yet feel the wrath of law.
MY travel have to rely on credit from their bankers, Barclay's and Royal Bank of Scotland, for a renewal of £250m of those credit facilities. That has been shelved for the moment to see where the airline goes.
Don't ever misunderstand the power of the banks!
However, tour operators are withdrawing their business already. When the confidence in their ability to produce the profits they forecast takes a dive so does the airline. Hard facts but nonetheless facts.
It is a tough and ruthless business.
The fact is that the downturn in business was not reported a fortnight ago and was forced by Deloitte's. This was as a result of Andersen's 'potential revision's.' What the directors sign for is that which they and the auditors agree to. It was in fact a method adopted by Andersen's in favour of Enron. The directors, therefore, were left with no alternative than to resign. A signature is laid on the company's accounts as a direct result of those which their auditors give them. Collusion might be a word to use, but who can tell? The dirtectors might yet feel the wrath of law.
MY travel have to rely on credit from their bankers, Barclay's and Royal Bank of Scotland, for a renewal of £250m of those credit facilities. That has been shelved for the moment to see where the airline goes.
Don't ever misunderstand the power of the banks!
However, tour operators are withdrawing their business already. When the confidence in their ability to produce the profits they forecast takes a dive so does the airline. Hard facts but nonetheless facts.
It is a tough and ruthless business.
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What will finish Mytravel is a lot of speculation that they are about to go bust. It won't matter that they are making money or that they have assets! A lot of speculation in the press and uninformed information circulating can do a hell of a lot of damage.
The likes of Lunn Poly are taking action to try and ensure the end of one of their main rivals. As for the total C#$$ regarding the pension fund, give me a break where does this information come from.
If these informed city insiders are so good at predicting the future of a company why are pensions, endowments etc in such a poor state? The only folks stealing from the Mytravel pension fund are the brokers who have lost a small fortune for us this year, the so called city insiders. These guys have no more idea of what is going to happen next than anyone else. They probably get their hot poop from CNN the BBC or this forum like the rest of us!!!!!!!!!!!!!!!!!!!
Guys this is a rumour network but we all owe it to each other to be responsible. False rumour and idle speculation costs jobs. It may be yours next, or mine!
There is a storm coming in our industry and it's name is George Bush! Good luck to us all.
The likes of Lunn Poly are taking action to try and ensure the end of one of their main rivals. As for the total C#$$ regarding the pension fund, give me a break where does this information come from.
If these informed city insiders are so good at predicting the future of a company why are pensions, endowments etc in such a poor state? The only folks stealing from the Mytravel pension fund are the brokers who have lost a small fortune for us this year, the so called city insiders. These guys have no more idea of what is going to happen next than anyone else. They probably get their hot poop from CNN the BBC or this forum like the rest of us!!!!!!!!!!!!!!!!!!!
Guys this is a rumour network but we all owe it to each other to be responsible. False rumour and idle speculation costs jobs. It may be yours next, or mine!
There is a storm coming in our industry and it's name is George Bush! Good luck to us all.
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Spot on Kinsman. I used to work up there and thats exactly how it works! The only thing the city boys are interested in is how they can make there buck, regardless of how it affects companys or ther employees!!! 
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Back you up 110% kinsman. The jets are all FULL with pax. I hope that this is the end to bad news but the media seem determined to destroy the company. Crossland & Co need to come out on Monday AM with the gloves off. MYT will still make a PROFIT. Most of the carriers on the Ocean last night are losing money hand over fist. Hard times, but the company will prevail.
763 Jock,
The jets may be "FULL", but that doesn't mean to say those seats/holidays were sold at a profit. IT companies will sell the last seats/holidays at a loss just to recoup some of the money they have already spent on the products.
Better to sell a 500.00 holiday for 100.00 than not sell it at all.
The jets may be "FULL", but that doesn't mean to say those seats/holidays were sold at a profit. IT companies will sell the last seats/holidays at a loss just to recoup some of the money they have already spent on the products.
Better to sell a 500.00 holiday for 100.00 than not sell it at all.