Specialist tour operator Holidaybreak has reduced its first half losses and told the City that, unlike TUI and Thomas Cook, the impact of the ash cloud will not be material to its financial results.
“Although not material in Group terms, this event could impact the division’s full year profits by up to £0.8 million,” it said.
Overall, Holidaybreak’s first half losses were reduced to £20 million before tax compared with £36.3 million in the first half of 2009. It has also reduced its net debt by £30 million to £129.2 million and is cash positive in the first half of the year for the first time.
By division, its hotel breaks unit Superbreak made an operating profit of £4.2 million on revenues of £65.1 million. In the first half of 2009, it made £5.3 million on revenues of £64.5 million.
It explained: “Declining hotel leisure rates, attractive rail fares and the availability of popular theatre shows, such as Lion King and Wicked, have allowed us to offer customers better value short break packages, although increased sales through retail travel agents has affected margin.”
Hotel break sales are currently running 3% behind last year.
Its educational travel unit tends to make its money in the second half of the year and lost £3m in the first half. However, it is 93% fully booked for 2010 and 30% for 2011.
Adventure travel lost less than one million pounds in the half compared with more than £10m in 2009. Camping also reduced losses, from £13.4m to £12.4m, with Holidaybreak saying this unit “is expected to deliver strong cash flow and good margins in the full year”.