Shareholders back UK tour operator's strategy

Worried shareholders supported fresh moves today by tour operator MyTravel to shore up its battered balance sheet.

The sale of a string of businesses worth £147m (€210.7m) won unanimous approval, although investors at a special meeting in Manchester also took the opportunity to question management over the fragile state of the company.

MyTravel – formerly known as Airtours – dealt a fresh blow to recovery hopes earlier this month with its second profits warning in three months.

The company, which secured new terms with lenders on £221.6m (€317.6m) of debt in September, blamed the warning on the higher proportion of holidays sold at knock-down prices in order to fill last-minute seats.

Peter Hepworth, from Doncaster, South Yorkshire, told chairman Eric Sanderson that a “rosy picture” had been painted of the company’s prospects at this year’s annual general meeting.

He said: “The company is still in a mess and still on its knees. How are they to get us out of this hole? I personally see it as a very long haul.”

Mr Sanderson said that he did not believe he had painted a false picture at the AGM.

He added: “We have considered all the options open to the company and taken advice and we are quite clear that pursuing the plan to achieve these disposals and working on the turnaround is the best option.”

The disposals, which should ensure MyTravel has sufficient working capital for the next 12 months, include the sale of US cruise operations, car rental business Auto Europe and hotel room distribution arm World Choice Travel.

Addressing around 100 shareholders, Mr Sanderson added: “At the end of the day we would envisage the core businesses we have in the UK, Scandinavia and Canada remaining in the group. We see this as the key to the business going forward.”

Chief executive Peter McHugh, who helped build the US businesses now being disposed of, said later the sale of other assets could not be ruled out.

But he did not envisage any large-scale redundancies in the firm’s UK workforce of between 11,000 and 12,000.

Mr McHugh added: “We have been trying to get the cash to see us through the winter, but also to get rid of businesses where we haven’t been able to make a profit for some time.

“Clearly the summer was a setback, but having completed these disposals, we will have sufficient equity to move forward and implement the turnaround plan.”