MyTravel shares slump but boardroom pay doubles
Tuesday 23 March 2004
MyTravel shocked its beleaguered investors again yesterday by warning that a fresh financial restructuring could virtually wipe out their shareholdings. Its shares crashed 37 per cent to 9.5p.
The company, which racked up pre-tax losses of almost £1bn last year, also highlighted the fragile state of the holiday market, warning that the UK summer market remained "challenging" and margins "under pressure".
Peter McHugh, the chief executive, told the 200 investors who turned up for MyTravel's annual meeting: "We have to recognise that any restructuring may result in very significant dilution of the interests of shareholders."
Although a deal with its banks and bondholders last year secured its financial future until the middle of 2006, Mr McHugh said having net liabilities of £673m "severely restricts the group's room for manoeuvre".
Yesterday's annual meeting saw the departure of Eric Sanderson, the former chairman, who became the ninth board director to quit in the past 17 months. He is being replaced by Michael Beckett, the Ashanti Goldfields chairman.
Shareholders attacked the company's remuneration bill, which doubled last year to £8.6m. Arthur Kilmartin, from Bramhall, Greater Manchester, said: "Is it right, is it appropriate, is it even half decent, that the current package for the chief executive should resemble that of somebody running a successful company rather than one riding dangerously close to the knacker's yard?"
Separately, ebookers, the long-haul travel specialist, saw its shares plunge 25 per cent after its preliminary profits missed market expectations. Although the group said demand for flights to destinations such as Australia and South Africa had returned in the fourth quarter after a tough year, its higher-margin car and hotel bookings were weak, causing margins to plummet.
As part of a management reshuffle, the company's chairman and chief executive, Dinesh Dhamija, is considering splitting his controversial double role.
Elsewhere in the travel industry, Carnival, the US-based cruise ship giant that acquired P&O Princess last year, said bookings and prices had bounced back as its first quarter earnings beat expectations.
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