Errors hit First Choice for pounds 8.6m

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The Independent Online
First Choice Holidays, Britain's third-largest tour operator, revealed yesterday that it had taken an pounds 8.6m exceptional charge to cover accounting errors dating back over a two-year period. The charge increased the company's first-half operating loss to pounds 33.1m compared with pounds 25.7m the previous year.

The company said that following a review of its financial systems, the financial control function had been re-organised and strengthened with new personnel recruited.

First Choice, which ousted its chief executive Francis Baron last November following a breakdown in boardroom relations, is developing a new business plan under the new chief executive, Peter Long.

A full review of operating expenses is being undertaken and the company said the benefits would be seen from next year. It was now taking a lower- risk approach to the package holiday business.

Ian Clubb, First Choice's deputy chairman, said the windfall share gains from Halifax and Alliance & Leicester building society conversions had yet to filter through to the holiday market.

Reporting a 6 per cent increase in bookings for this summer compared to last year as at 21 June, the company said the biggest growth had been in long-haul holidays. In the Mediterranean, holidays to Turkey had been growing fast.

After cutting its full-year dividend by a quarter in December, the half- year payout is a third lower than last year at 0.9p per share.

Pre-tax losses were pounds 30.9m in the six months to 30 April against pounds 23.4m previously.