MyTravel seeks to rebuild position

MyTravel Group, the troubled British tour operator that owns Panorama and Direct Holidays in Ireland, today said it was seeking to rebuild its financial position and that first half trading is in line with expectations.

In a trading statement the company, formerly called Airtours, said although its current financial arrangements are in place until mid-2006, it is already looking at ways of restructuring its balance sheet "to bring the company back to full and lasting financial health".

As at 30 September 2003, the company's net liabilities were £673m (€1.4bn).

The firm has not yet clarified what form the restructuring will take, or whether it will include a debt-for-equity swap.

Looking ahead, the holiday firm said: "Although there is more to be done, we are ahead of schedule on delivering the cost savings and believe that they are now likely to exceed the target of £150m (€223m)."

MyTravel said its first-half trading is in line with expectations and also in line with its aim of returning to profitability in 2005.

"We expect the results for the first half of the year to be in line with our expectations and show a significant improvement over last year in operating performance," said chief executive Peter McHugh at the company's annual general meeting today.

"For the 2003/2004 winter season, charter bookings are at levels that are consistent with capacity in all regions," he said.

"The market in the UK for Summer 2004 has continued to be challenging, with further market evidence that customers are booking later.

"Margins have been under some pressure, however we have maintained an acceptable share of the market and we have taken action to reduce capacity and cost. Early indications for the summer 2004 season in Canada and Northern Europe are encouraging," he added.

MyTravel shares were trading down 30% at 3pm in London at 10.25p, down 4.75p, as investors reacted to the balance sheet restructuring announcement.