New profit warning issued by MyTravel

STRUGGLING package tour firm MyTravel has put out a second profits warning in just over three months - dealing another severe blow to embattled investors.

Shareholders in the debt-ridden company, including former Kwik-Fit tycoon Sir Tom Farmer, were stunned to see ten per cent wiped off the value of the company following the announcement that margins had been weaker than expected.

That was because of the high number of holidays sold at knock-down prices at the last minute to fill seats, the firm said.

MyTravel said the UK holiday market had been weaker than expected in the summer, with more trips sold as "lates" than was normal.

In a circular to shareholders it explained that conservative accounting policies had prompted fresh revisions to profit estimates for the six months to the end of September, the second half of its financial year.

The company now expected to make an operating loss for the second half.

The circular also asked for approval to sell a string of businesses to improve its ailing balance sheet.

The Manchester-based company, formerly known as Airtours, wants shareholders to back the sale of its US cruise operations, the car rental business Auto Europe and the hotel room distribution operation World Choice Travel in deals worth almost £147 million.

The company had been hoping for a better summer than last year, with the holiday market looking up after the Iraq war.

But it issued a statement in August warning that margins over the summer had been lower than expected and the picture in second half would be similar to that a year earlier.