First Choice Holidays beat forecasts with a 20 per cent rise in annual profit today despite lagging sales for summer 2004 as customers continue to book holidays late.
The British firm, which has battled a slump in tourism by cutting costs and capacity and focusing on specialist holidays, said profit before tax, goodwill and exceptional items jumped to £87.1 million sterling ($151.2 million) in the year to October 31st.
Analyst forecasts had ranged from £80 million to £85 million, with a consensus of £83.1 million.
Holiday firms worldwide have been suffering a drop in tourism in the global economic downturn, which earlier in the year was exacerbated by the Iraq war and outbreak of the SARS virus.
First Choice, which runs over 650 Travel Choice high street travel agents, has fared better than most by focusing on higher-margin niche holidays, such as sailing, trekking and golfing.
Sales for summer 2004 were running about 20 per cent below last year, but this was part of a trend towards late bookings, and sales would recover in the new year, the firm added.
First Choice raised its annual dividend by 11 per cent to 5 pence per share and named Mr Michael Hodgkinson, a former CEO of airports group BAA, as chairman from March 11th, 2004.