p16-17 city oct10 7/10/08 19:21 Page 17
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city & finance news
Sleeping easy? Bed bank profits
Stock market
BA’s merger with
Lowcostbeds 2007 £308,462
2006 £141,659
slide missed
Iberia faces delay
Hotels4U 2007 £270,648 loss
2006 £1,736,783 profit
THE PLANNED merger between British Airways
Cook and Tui’s
and Iberia is set to be delayed as BA concentrates
Youtravel 2007 £907,000 loss on shoring up its sales and share prices.
2006 not applicable
‘mini-boom’
BA shares dropped 19p to 145p on Monday
when markets around the world plummeted
HotelConnect 2007 £132,159
2006 £445,788
amid global economic fears, leaving the airline’s
stock 67% down on its peak of 450p.
Somewhere2stay 2007 £66,000
Mark Lewis.
Chief executive Willie Walsh told Spanish jour-
2006 not applicable
THE big two operators took hits during Monday’s nalists the merger with Iberia would take longer
massive FTSE stock slide, but analysts said than expected because the crisis in the industry
underlying factors pointed to outperformance in meant managers were concentrating on the core
the coming months and years. business rather than the merger deal.
The market was less confident of a recovery in The airline is thought likely to want to delay
the aviation market where even the falling oil the merger until its share price recovers.
price could not disguise underlying weakness.
Tui Travel plunged 9.29% on the biggest FTSE
one-day fall since Black Monday in 1987, while
Thomas Cook fell 3.55%. On Tuesday, Tui rallied
Powell role at Tui
r pressure
with a gain of 4.86%, but Cook fell another 0.98%.
Andrew Lee, analyst at Dresdner Kleinwort, Marine expanded
said the slide did not truly reflect the position of
the operators. He said they were benefiting from TUI MARINE is reshuffling its executive team in a
tighter capacity since the collapse of XL, and oil shake-up that will see managing director Cheryl
HotelConnect finished its year to January this prices falling from $130 a barrel to around $80, Powell take on an extra role.
year with a pre-tax profit of £132,100, down from but no share price gains. “They have had their Powell, who is managing director of Le Boat,
£445,700 the previous year. own mini-boom, but the market does not seem Yachts and Overseas Clubs UK, will also take
Commercial manager Ian Ackland said he to have priced that in,” he said. on the role of global distribution for Tui Marine
expected consolidation to affect bed banks Despite the share price slump, Joseph Thomas Yachts.
active in the beach market rather than the city of Investec said the underlying fundamentals Powell’s key task will be to bolster profits and
break sector in which his company was focused. following last year’s mergers remained strong, sales for Tui Marine Yachts, Sunsail Bareboat,
“Bed banks in that area are going to have to and Tui remained a good proposition. Sunsail Flotilla, Sunsail Corporate, Sunsail
fight harder. We are in a more favourable posi- “These are two companies which were doing Schools, The Moorings Bareboat, The Moorings
tion because we are stronger in cities,” he said. badly in a good market, but having put them- Power, The Moorings Crewed Yachts and
Investment in technology had hit profit, he added. selves on an even keel with the mergers, could Footloose.
Stuart Jackson, managing director of Monarch be doing well in a bad market,” he said. Powell will be expected to use her 10 years’
Group bed bank Somewhere2stay, which made a However, Laurie Price, analyst at Mott Mac- experience to repeat her previous success, which
pre-tax profit of £66,000 in the year to October Donald, said he had never seen such poor condi- included driving a profitability turnaround of
2007, said consolidation would be “a priority” for tions for the travel industry, and predicted more £26m in her previous role in retail and taking
independent accommodation-only suppliers. aviation failures before the situation improved. Sunsail Clubs into the black.
Jackson said the sector should be increasing “It is almost inevitable that there will be other Meanwhile, Nick Stafford, senior vice-president
prices and aiming for margins of 10-15% rather casualties, and it is a pity that people will suffer a for The Moorings and Sunsail, will leave the
than the present 2-5%, which were unsustainable. loss because the airlines aren’t bonded,” he said. company and will not be replaced.
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10.10.2008 17
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