The Investment column: Early bookings boost Airtours

Airtours' figures for the first three months to December are not the most meaningful data - it is hardly the most important quarter of the year for a tour operator and travel agent. They do, however, give analysts a chance to check their expectations and for the company to give a steer about the volume of early bookings.

Yesterday's 6.5p fall in the share price to 970p was a rather grudging reaction to a quarterly statement that reassured on both these counts.

Analysts pushed their expectations for the year to September a useful pounds 7m higher to pounds 110m on the back of buoyant booking figures showing early purchases of summer 1997 packages 45 per cent ahead.

But after the shares' breathtaking recent run, a pause was to be expected. When Airtours announced record profits for the year to last September a couple of weeks before Christmas the shares stood at just over pounds 7. Now they are the best part of pounds 10.

Less than five years ago you could have picked them up for 170p, and they have doubled in a year.

Yesterday's statement showed a 40 per cent rise in first-quarter sales thanks in part to the inclusion of Spies and Alba, the latest in Airtours' overseas pushes, and a 33 per cent drop in the seasonal loss before tax to pounds 12.1m. Part of the rationale for moving into overseas markets such as Scandinavia and Canada has been a desire to make the business less summer orientated and the strategy appears to be working handsomely.

Airtours shares have soared on hopes that the days of overcapacity and price wars are over for good, together with a touch of bid spice from the 29.9 per cent stake held by Carnival Corporation of the US. On the latest forecasts they stand on a prospective price/earnings ratio of 18 this year. That's a reasonable premium for a genuine growth company and the shares are still worth holding.