Travelzest shares struggle despite FY profits

After a “restructuring and re-energising year”, Travelzest has reported an improvement in sales and profits, with its two Canadian businesses faring better than its UK brand portfolio.

After a “restructuring and re-energising year”, Travelzest has reported an improvement in sales and profits, with its two Canadian businesses faring better than its UK brand portfolio.

In the year end to October 2009, Travelzest recorded total transaction values of £189.5m, a 6% increase on 2008 restated numbers.

Revenues fell by 13% to £38.3m from £44.3m, but Travelzest was still able to turn round last year’s operating loss of £2.3m into a £1.3m gain.

Underlying operating profit came in at £5.5m with a profit after tax of £719,000.

The only breakdown between its Canadian and UK operations in the results shows the extent to which revenues from the UK were hit during the year. 

Of the £38.3m revenues, £21.4m came from the UK, compared with the previous year when the UK accounted for £28m.

At the same time, the Canadian operations’ revenue has increased slightly from £16.4m to £17m. “A drop in passenger volumes from the UK” was behind the fall.

The statement said following the UK restructure, Travelzest is now “more functionally based rather than brand based.”

It added that “rather than a series of largely independent small businesses pursuing similar strategies and duplicating resources, most of the companies in the UK operate as one business, with a unified operational structure, common strategies and sales operations.”

Travelzest’s UK brands include holiday.co.uk. flight.co.uk, Captivating Cuba, The Tapestry Collection and the Best of Morocco.

Looking ahead, it is “cautiously optimistic” for the current financial year.

“We are seeing promising economic indicators from Canada and very early signs of the same in the UK,” it said, adding that the lates market is of growing importance to the business.

However, despite Travelzest’s return to the black, the market has not responded well to the results. At 10.30am its shares on London’s Alternative Investment Market were trading at 9p, 1.75p or 16% down on last night’s close of 10.75p.

Earlier this morning the shares had fallen as low as 8p.