LONDON (SHARECAST) – TUI Travel has had to restate results for the 2008/09 and take an extra £88m charge linked to the integration of IT systems in its UK mainstream business following the merger with First Choice Holidays in 2007.
That takes total writedowns to £117m as £29m of them had already been flagged when the company published third quarter results in August.
“These have arisen as a result of failures to reconcile balances adequately in legacy systems in the retail and tour operator businesses in TUI UK,” the firm said Thursday.
Finance boss Paul Bowtell falls on his sword as TUI lays the blame firmly at the door of the old management team. He’s off at the end of 2010. “TUI Travel is satisfied that the weaknesses in the systems have been rectified,” it said.
Bowtell joined the board of TUI Travel in June 2007 and had been finance director at First Choice Holidays since 2004.
TUI stressed that the adjustments to the results are non-cash in nature and have no impact on cash and net debt and, due to process improvements during the year the impact in 2010 has been limited to £5m, in line with the third quarter statement.
“Accordingly, TUI Travel remains confident that full year results for the year ended 30 September 2010 will be in line with previous guidance and that net debt will be lower than previous guidance,” chiefs said today.
Following the revisit, underlying operating profit for the year ended 30 September 2009 falls by £42m to £401m, all of which relates to TUI UK.
TUI warned in August that profits this year will be at the low end of forecasts after UK bookings faltered.
But today it confirmed stronger recent trading trends have continued.
Results for the year ended 30 September are due on 2 December.