No rest for Travelzest as management prepares for take off

Friday, Feb 18 2011 by
No rest for Travelzest as management prepares for take off

In the Summer of 2008, all plans for jetting off to faraway shores were cancelled for the top team at AIM listed holiday group Travelzest (LON:TVZ) . Talks with a potential suitor, rumoured to be Tui Travel, over a possible 115p per share takeover came but then faded away as the chilly economic climate took its toll. In the aftermath of those talks and amid mounting tension within the company’s board, the founders of Travelzest’s prized asset, Canada-based itravel2000, stepped up to take management control. Their remit was to refocus the group’s hitherto fragmented UK operations and get the group flying again.

For CEO Jonathan Carroll and FD Jack Fraser, the process of streamlining Travelzest’s portfolio of holiday businesses was mammoth and has only just finished. Under their stewardship, the reorganisation took just seven months in a year that saw them still manage to deliver revenue growth of 14% to £43.8m. Losses came in at £12.7m but the team is adamant that Travelzest has a bright future. Their task now is to build on a stable platform of intertwined travel operators in the UK and recreate the performance and profitability of the two North American businesses, The Cruise Professionals and itravel2000.

Travelzest’s London listed peers range in size from AIM companies Western & Oriental (LON:WEST) and All Leisure Group (LON:ALLG) to FTSE SmallCap Holidaybreak (LON:HBR) and FTSE 250 quoted Thomas Cook (LON:TCG). With the Travelzest share price trading at around 14p, Carroll and Fraser unsurprisingly feel aggrieved at what they see as a substantial under-valuation – bearing in mind the North American businesses continue to perform well. However, there is no doubt between them that the message to the market is that Travelzest is at the start of a post-turnaround growth phase. After weathering dire economic conditions, negotiating an Icelandic ash cloud and overhauling the UK operations, they are in not quite ready for a holiday themselves just yet.

Gentlemen, as founders of itravel2000, you were brought in to manage Travezest at a difficult time for the group. What did you see when you arrived?

Jonathan Carroll: Well that’s a great question. When we sold itravel2000 in October 2006…

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