MyTravel Group plc registers £42.3 million increase in operating profit

Terming its progress as “strong” one in its last financial year, MyTravel Group plc has managed £42.3 million increase in operating profit to £55.2 million.

As per the information available, MyTravel said its turnaround strategy was on course, driven by the increasing popularity of holidays in North Africa, Cuba and Brazil. At the pretax level, MyTravel made a loss of 18.3 million pounds, after charges partly relating to Going Places store closures, down from a proforma loss of 153.4 million. Full-year group operating profit rose to 55.2 million pounds, the group said on Thursday, up more from last year's proforma 12.9 million.

The group clarified that it changed its financial year to end October last year (from September), such that the prior year audited comparative information covers the 13 months to October 2004. As a result, prior year unaudited pro forma information for the 12 months to October 2004 is shown to enable more

meaningful comparisons.

Peter McHugh, chief executive, MyTravel Group plc said, “This is a particularly good result in view of the increased cost of fuel, which we estimate has reduced operating profit by a minimum of £47.3 million. Without the impact of fuel, we would have been a year ahead of our turnaround targets. As it is, we achieved another record profit in Northern Europe. In North America, despite a number of problems encountered over the summer, our performance was good. In the UK, we made excellent progress year on year despite the high fuel prices,” said McHugh.

“All in all it has been a good year for MyTravel, our turnaround is on course and the outlook for 2006 is positive. Across all divisions, our strong management team is making significant progress. Our emphasis continues to be on margin rather than volume and the flexibility we have achieved in recent years allows us to make appropriate adjustments where necessary. We continue to target an operating profit in

all divisions for the current financial year and a margin of 3.5% in the UK in 2007,” added McHugh.

The company said Internet sales accounted for around 20 percent of group sales this year, up from just under 10 percent a year ago, and that the group expected 23 to 24 percent of sales to be made online next year.

According to Reuters, analysts at CSFB said in a research note that the results looked “very strong...The net effect...is certainly positive in our view. We expect to revise estimates slightly upwards.”