Usit, the student and youth travel group which came under new ownership in June 2002, made a loss of €14.3 million during the year to October 31st, 2002, according to accounts just filed.

However the new owners of Usit Ireland Ltd state in the accounts that they believe the group will trade profitably in the future.

The loss to October 31st, 2002, included exceptional items of €10.41 million.

The loss in 2001 was €9 million. The company recorded a profit of €1.9 million in 2000.

Usit Ireland was taken over by new investors after the Usit group was placed in examinership in February 2002. The new owners are Mr Michael Tunney, Mr David Andrews and Mr Neil O'Leary.

The student and youth travel operation saw sales drop by 28 per cent during the year to October 31st, 2002, when compared with the previous year. The directors' report which accompanies the accounts states that the downturn was due to a combination of the effects on the travel industry of the September 11th, 2001 attacks on the US, and the period of examinership.

The group collapsed after it encountered a cashflow crisis following the attacks on New York and Washington.

The new investors took on Usit Ireland Ltd and invested €2.5 million.

"Other support in a wide range of areas is also being provided by the new shareholders," according to the directors' report.

"The directors consider that the ongoing restructuring of the group provides a suitable platform to enable it trade profitably in the future."

The directors stated that they were confident the company could return to profitability in 2003.

The company had a turnover of €51.68 million in the year to October 31st, 2002, compared to €72.68 in the previous year. The principal exception item recorded for 2002 was restructuring costs of €10.6 million. A similar level of restructuring costs was recorded in the profit and loss account for 2001 (€10.4 million).

A second Usit company, Usit World.com Ltd, which was also acquired by the investors, is owned by Usit Ireland Ltd since July 2002 and its results have been included in the consolidated accounts of Usit Ireland Ltd since that date.

Usit World.com is a developer of computer programmes.

The Usit Ireland Ltd accounts show that retail travel sales provided the bulk of turnover in the year to October 31st, 2002, (€39.9 million out of a €51.6 million total).

The exchange programmes run by Usit provided turnover of €2.7 million and Usit's accommodation centres provided turnover of €4.8 million. The vast bulk of the company's turnover arose in the Republic.

Directors' emoluments were €16,500 in the year to October 31st, 2002, compared to €122,064 the previous year. The board comprises the three investors as of June 17th, 2002. The directors in place before that have all resigned.

The number of staff employed by the company fell from 341 in 2001, to 301 in 2002.

Details of the investment made by the investors are given in the notes to the accounts. The investors put in €510,000 by way of share capital and €1.99 million in the form of loan notes. Loan notes of €725,000 have been repaid to the shareholders.

The company and its subsidiaries have five-year property rental commitments totalling €5.56 million. During the year to October 31st, 2002, the company disposed of number 5 College Green, Dublin.