Airtours carves out bigger place in sun

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The Independent Online
HOLIDAYMAKERS fleeing the recession led to soaring profits at Airtours, the holiday tours group, last year.

The company, which also operates a charter airline, yesterday reported a one-third surge in taxable profits to pounds 36.5m for the year to 30 September. The result, achieved on a 40 per cent jump in turnover to pounds 406m, was at the top end of market estimates.

However, earnings per share improved just 11 per cent to 27.47p. The total dividend has been lifted 26 per cent to 7.25p.

The profits jump includes an increase in interest income from pounds 4.8m to pounds 8m last year, thanks to a growing cash pile. Airtours ended the year with net cash of pounds 155m, up from pounds 103m. The high balances are partly due to seasonal factors, but even at their lowest point they amounted to pounds 65m last year.

Hugh Collinson, managing director, said the company planned to use some of the cash to expand into holiday markets through acquisitions. It is also moving into skiing holidays from next year.

The total number of passenger carried jumped from about 1.2 million to 1.6 million. About 46 per cent chose Spain, but long- haul destinations such as the Caribbean and Florida were also popular.

The group's total share of the UK market was estimated at about 14 per cent, compared with 14.8 per cent for Owners Abroad and 27.7 per cent for Thomson Holidays, the market leader.

The results also reflect the first full year's profits from the charter airline, which carries 55 per cent of the company's holidaymakers in the summer peak season.

The average price for a package during the year was broadly unchanged at about pounds 300.

In late September Airtours acquired Pickfords Travel, the agency business, from NFC for pounds 16m.

It said the business was performing in line with expectations and had provided it with a nationwide presence.

Airtours said bookings this year were up about 19 per cent compared with a 14 per cent decline in the industry as a whole.

Despite a firmer dollar, demand for Florida was holding up well. There has been some switching from Cyprus to Turkey, which is growing in popularity.

The shares closed unchanged at 260p.