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Minoan travel boost to help narrow losses

Minoan Group expects to report narrower full-year losses thanks to a strong performance from its travel business.

KEY BRIEF: Duncan Wilson was appointed to build the travel business. Picture: Colin Templeton
KEY BRIEF: Duncan Wilson was appointed to build the travel business. Picture: Colin Templeton

Former Direct Holidays boss Duncan Wilson was appointed managing director of Minoan in 2009 with a brief to build the travel business.

Since then the AIM-listed firm has acquired a number of Scottish holiday operators, including Stewart Travel, Ski Travel Centre, King World Travel and John Semple Travel.

In a trading update yesterday, Minoan said its travel arm had put in a robust performance in the 12 months to the end of October 2012 with revenues topping £37 million and operating profits of £400,000.

The company said the operating profits came after taking off costs related to integrating its acquisitions and building the infrastructure for further expansion from its Glasgow head office.

The figures from the travel arm will reduce losses at a group level as Minoan continues to try to make progress on a multimillion-pound resort in Greece.

Trading since the financial year-end is said to have been buoyant with commission in the travel business running 20% ahead and predictions 2013 numbers will show a "substantial improvement" on those posted for 2012.

However, Minoan warned cash flows in the industry were under pressure and it told how large suppliers have been offering less generous terms.

In addition, it said further cash was being set aside in escrow to meet the Civil Aviation Authority's new ATOL Flight Plus regulations which means passengers will be refunded and repatriated it an airline or company involved in a holiday goes bust.

The first 50 Minoan travel kiosks in sub post offices have been installed across the UK with the company planning to give more information on that scheme once the accounts have been audited.

The fast-track planning application for Crete resort project has been confirmed in Greek law with an environmental assessment being carried out in order to secure what would be equivalent to outline planning permission in the UK.

Minoan said it hopes to submit the environmental report in the "near future".

It added the Greek Government was looking at implementing a number of new planning and tourism law but those would be "beneficial" to the Greek project if brought into law.

Christopher Egleton, chairman of Minoan, said: "The group has had an eventful year with the rapidly expanding travel business performing well and progress made on the Crete project.

"Our travel buy-and-build strategy is paying off, with the recent acquisitions now integrated and the installation of the first 50 sub post office-based travel kiosks.

"All this has helped to deliver a good set of trading figures from the travel business.

"We are also pleased to see the Crete project's Fast Track status officially confirmed in law and we are due to submit our Environmental Assessment shortly."

Shares in Minoan ended the day up 0.12p, or 1.69%, at 7.5p.

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