Irish Continental Group (ICG), the Irish Ferries company, has announced the acquisition of two British-based travel companies, Tara Travel and Gerry Feeney Travel, for up to £4 million sterling (€6.06 million).
This represents its first move, under the existing management team, into the travel agency business. Asked if this development would affect the group's relations with other travel agents which sell Irish Ferries' services, ICG's managing director, Mr Eamonn Roth well, said the acquisitions were not designed to sell more Irish Ferries tickets but to enhance its holidays in Ireland business.
It has had a "lot of hits" on its Internet site and the acquisitions should boost this business and enhance the range of travel services offered.
The business of the two travel agencies, which is largely ethnic Irish, will be sold through its own call centre. Irish Ferries business only forms a "very small" proportion of the two agencies' turnover, said Mr Rothwell. The two, he added, would continue to sell tickets for competitors, such as Stena Line and Ryanair. ICG, he said, did not intend to buy other travel agencies.
The two travel companies will be managed by Mr Gerry Feeney, managing director of Gerry Fee ney Travel. ICG said the companies provided a full range of travel services from 10 locations, eight of which were in the London area. The initial consideration will be £3.75 million; £1.75 million in cash on completion, and £2 million sterling in loan notes. Deferred consideration of up to £0.25 million is payable over the next three years, based on performance.
The companies have a turnover of £22.3 million sterling and generate pre-tax profits of £0.39 million. The consideration is on a pre-tax multiple of 9.6. The net assets amount to £1.1 million.
Irish Ferries last month announced it had commissioned a shipyard to build "the world's largest cruise ferry" in a deal which will cost €100 million (£79 million) and boost the company's cargo capacity. The 50,000 tonne vessel, with a speed of 22 knots, with a passenger capacity for 2,000, will be launched on the Dublin-Holyhead route in the spring of 2001, replacing the Isle of Inishmore.
ICG's latest results showed a pre-tax profit of €2.6 million (£2.1 million) in the six months ended April 30th, compared with a loss of €1.3 million in the comparable six months in 1998. Traditionally the company incurs a loss in the first half but a pick-up in freight levels led to the profit this year. The company is looking for further growth in the second half.
