On 30th September 2002, MyTravel Group
plc gave a trading update in respect of the financial year which ended on that date. A number of additional matters have now come to light and as a result the Company announces a further reduction in its expectations for that year.
A downgrade of £12 million is attributable to trading in the UK at the end of this summer being worse than expected and a downgrade of £8 million is attributable to a problem with reconciliations as we closed the UK accounts. In addition, we have identified amounts representing potential revisions to accounting estimates which are initially estimated in the range £15 million to £30 million and which may result in a further downgrade. Accordingly, David Crossland yesterday instigated a detailed review of the Group`s commercial activities and financial processes. These additional amounts are expected to be
non-cash items and non- recurring in nature.
Management changes have been made as follows: Peter McHugh, CEO MyTravel North America, will assume the position of Group Chief Executive, based in the UK, and Philip Jansen, who recently joined the Group as European Chief Executive, will become Group Chief Operating Officer, both with immediate effect. As previously announced, David Crossland will remain as Chairman and has deferred his retirement for up to a year.
It is not considered that any of the circumstances underlying this further reduction in expectations gives rise to a default under the Company`s existing financial facilities. However, the Board has resolved not to recommend a final dividend in respect of the year just ended. The Board anticipates that
dividends will be recommenced in respect of the current financial year.
David Crossland, Chairman of MyTravel, said:
“I have, in conjunction with David Jardine, instigated a comprehensive review of our commercial activities and financial processes. This will be reported on, in full, at the time of our preliminary results announcement at the end of November. We have also had a number of enquiries about possible disposals of non-core assets, which we will examine to see if they would generate shareholder value.
I have made immediate management changes and have a strong team around me to get the business back on track. Summer 2003 bookings in the UK since 30 September are currently running 44% ahead of last year.”