First Choice Holidays profit up 2.7 per cent

LONDON: The U.K. travel company First Choice Holidays Plc. posted a 2.7 per cent increase in its net income to 72 million pounds, compared with 70.1 million pounds in 2005. Sales rose 11 per cent to 2.7 billion pounds.

The company, headquartered in Crawley, is in talks with a number of parties including rival MyTravel to sell its package holiday business. Chairman Michael Hodgkinson said a transaction may not happen but the company is sure that its strategy and flexible business model will ensure that it is well placed to continue to outperform the market and deliver sustainable growth in 2007 and beyond.

The company said its mainstream holiday revenue rose 15 per cent in the current trading for winter 2006-2007, against the market’s 9 per cent fall. This has been possible because long-haul revenues and bookings rose 40 per cent and 26 per cent respectively. However, for the summer 2007, the company’s mainstream revenue fell 5 per cent, compared to an 11 per cent drop in the market.

The company’s package holiday business is estimated to be worth 500 million pounds. Besides MyTravel, Germany’s TUI and Thomas Cook and Switzerland’s Kuoni are also understood to have made offers for the unit.

First Choice plans to develop its adventure and short-breaks businesses. It has already changed its focus to profitable adventure holidays than on flight sales and cheaper no-frills holidays and this actually helped the company to improve its financial performance. It has package holidays as well as independent accommodation and flights. It also undertakes yacht charters in the Caribbean and organizes vacation trips for adventure tourists to climb Mount Kilimanjaro in Tanzania.

The company revealed it has ordered two more Boeing 787 aircraft to meet long-haul demand.

The company’s shares rose 3.8 per cent to 274 pence, valuing it at around 1.45 billion pounds. The company is paying a final dividend of 5.4 pence a share, an increase of 16 per cent.