Online travel shaken
|
|
The Independent 21 December 2003
The internet travel sector hit turbulence yesterday after the Civil Aviation Authority cast the spotlight on company balance sheets
by refusing to renew Online Travel Corporation's operating licence.
OTC, which operates a plethora of internet travel sites including deckchair.com and ThomasCook.com, unsettled the City by admitting it had been forced to turn to its shareholders to shore up its balance sheet. It is placing 55.3 million new shares - some 45 per cent of its issued share capital - with institutional investors to raise £7.9m net of expenses.
Shares in lastminute.com and ebookers tumbled 7 per cent as investors fretted about the strength of their own balance sheets. Lastminute, which failed to impress with its maiden profit last month, is also struggling to shake off a critical report from the stockbroker Collins Stewart that claimed its shares were "ridiculously overvalued".
Mark Jones, OTC's chief executive, said the placing meant the company could secure a new ATOL (Air Travel Operators Licensing). Without fresh funds, the group would have failed the CAA's net free asset test, which deems companies must have net free assets equalling at least 3 per cent of their projected turnover to be awarded an ATOL.
Mr Jones said that with net current liabilities of £2.8m, the group would have failed the CAA's test now, let alone next year when its own sales are forecast to soar sharply. "We were pre-empting the CAA because we thought our balance sheet needed strengthening. But we wouldn't have had enough free assets anyway," he said.
Shares in OTC, which came close to being taken over last year when its stock was worth 34p, rose 0.75p to 18p on confirmation that the new shares had been conditionally placed with about 15 institutional investors.
Mr Jones said: "The fundraising puts the company on a sound financial footing and will enable us to build on the sales growth we are experiencing." He said sales at the group's flagship OnlineTravel.com site had soared by 300 per cent over the past six weeks.
OTC, which has cut 50 jobs and closed three of its five offices in the past year, reported group losses of £5.9m for the year to 31 October, up from £3m the previous year.
Altium Capital, the group's broker, raised its pre-tax profit forecast for next year to £3.5m from £3.3m, adding: "The successful placing secures the medium-term financial health of the company."
|
Back to main page
|
|
A Britain of Lakes, Lochs, Loughs And Tarns
As I travel through Britain on many a hike or climb it can be very hard to not come across a body of water in some shape or form. Why even a National Park, the Lake District is named from bodies of wa (12/11/2012)
|
|
Tourism Ministers to debate barriers to travel
Reducing visa constraints, simplifying entry processes and developing policies that improve connectivity across borders are the topics on the agenda for the worlds Tourism Ministers as they meet (31/10/2012)
|
|
|
|
|
Live like James Bond
To celebrate the release of Skyfall we explore Bond’s Britain. The UK is the home of James Bond and his creator, Ian Fleming, so where better to live like the world-famous spy?
(10/10/2012)
|
|
|
|
|
There's more to London than sport, says Boris Becker
Tennis legend Boris Becker urges Games spectators to make the most of their visit to London, regretting the many times that he played tennis over the years without ever getting chance to properly expl (12/08/2012)
|
|
|
|
|
|
Sports tours and museums in London
Football, cricket, rugby, golf: name a sport and there\'s a good chance we Brits invented it, wrote the rules or are just plain obsessed by it. And if playing or watching your favourites isn\'t enough (09/07/2012)
|
|
|
|
|
|
|
|
|
|
|
Shakespeare: staging the world
During the summer of the London 2012 Olympic and Paralympic Games the British Museum is presenting a major exhibition on the world and works of William Shakespeare, supported by BP
(22/04/2012)
|
|
Coasteering and Cliff-diving in Wales
I am coasteering along the Pembrokeshire coastline of West Wales, getting a taste of the country’s wild side. Along with my group of travel partners, our wits and courage are put to the test.
(18/03/2012)
|
|
Hajj: Journey to the heart of Islam
The final exhibition in the British Museum’s series on spiritual journeys. This is the first ever major exhibition dedicated to the Hajj; the pilgrimage to Mecca which is central to the Muslim (17/02/2012)
|
|
|
|