MyTravel Group said on Wednesday its annual profit would be less than previously expected following difficult trading conditions, sending its shares down as much 20 percent.
MyTravel said it expected to report an operating profit of between 55 million pounds and 60 million pounds, compared to previous expectations of 75 million to 85 million, as the UK would not return to profit.
We no longer expect the UK business to return to profit this year despite substantial and continuing progress in turning around the business, Chief Executive Peter McHugh said in a conference call.
He said despite recent terror incidents in Turkey and Jordon, security alerts in the UK and fuel and foreign currency rises, the UK performance was expected to improve from a 27.4 million pounds operating loss in 2005 to a 10 to 15 million loss this year
McHugh said the group had accelerated its cost reduction programme in the UK, including cutting marketing spending and travel, and that he expected a recovery to be underway by 2007.
McHugh said that more people would go on holiday next year as there would be no soccer World Cup, which meant this year people stayed home to watch or went to Germany for their holiday and he did not expect the UK to have another record hot summer.
The company said in a trading update that it expected pretax profit of 40 million to 45 million pounds for the full year, its first annual profit since 2001, compared with the loss of 17.4 million seen the year before.
Shares in MyTravel, which have underperformed the UK travel and leisure sector by 17 percent over the last 12 months, were down 18 percent at 165 pence by 8:08 a.m., valuing the group at around 750 million pounds.