First half losses at CNG Travel Group almost trebled to $22 million (€18.3 million), the company said yesterday.
This week's sale of its on-line hotel booking business, Places to Stay, to Fexco for $2.5 million resulted in its profit and loss account taking a once-off hit of $12.8 million.
However, increased costs throughout the business in the first six months of the year also contributed to the deficit.
Investors reacted to the news by selling the stock. At the close of business on London's Alternative Investment Market (AIM) last night, it was quoted at 31 pence sterling (45.3 cent), a 9 per cent fall on its opening price of 34 pence.
Last June, the company issued an profit warning and announced its intention to sell Places to Stay, as that element of the business was losing heavily.
At the same time, its chief executive and founder, Finbarr Power, left the company. CNG's shareholders include Michael Smurfit and Menolly Homes boss Séamus Ross, whose son sits on the board.
The sale left it with its online booking software, TLC, which it licenses to travel agents, and the profitable US corporate travel specialist, Tzell.
Total group turnover, including Places to Stay, for the six months to the end of June grew 16 per cent to $31.2 million from $26.9 million in the same period last year.
Cost of sales grew $4 million to $21 million, leaving it with a slightly increased gross profit of $21 million. Administrative expenses grew $5 million to $15 million and write-offs doubled to $2 million.
This was in addition to the $12.8 million charge for the reduction in its assets that resulted from the Places to Stay sale.
First-half operating losses were $19.5 million, compared with $3 million last year. Pretax losses for the same period were $22 million, compared with $8.8 million at the end of June 2004.
However, the company's figures show that $18.5 million of its operating losses were attributable to Places to Stay, while the remaining elements of the business lost $976,000, compared with a gain of $1.4 million last year.
The group said its like-for-like operating loss was $3.3 million. Its loss per share for was 0.35 US cents, down from 1.78 cents.
