Tour operator First Choice Holidays signalled bright times for the company with strong winter bookings and a 20 per cent rise in profits.

Despite operating in "the most difficult period in the history of the industry", the Crawley-based firm said pre-tax profits for the year to October 31 improved to £87.1 million.

Demand for specialist trips in the winter season was ahead of last year, while its mainstream business had fewer holidays left to sell.

Chief executive Peter Long also forecast strong bookings during the new year, with holiday sales for next summer showing an "encouraging improvement", although 20 per cent down on last year.

Profits from its mainstream UK business increased 16 per cent to £37 million, while losses from its operations in Canada were slashed to £700,000 from £7 million a year ago.

The group's brands include Unijet, Falcon, JWT, Eclipse and Sovereign. It also owns the Bakers Dolphin and Travel Choice shops.

First Choice has invested heavily in specialist businesses such as cultural tours and activity holidays involving sailing, skiing and trekking in recent years.

Its European specialist business enjoyed "excellent growth" during the year, with profits up 21 per cent to £24.5 million. Profits from UK specialist holidays were static by comparison at £19.6 million.

The full-year results were the last delivered by First Choice chairman Ian Clubb, who announced his retirement after more than nine years at the helm. He will be replaced by former BAA chief executive Sir Michael Hodgkinson.

First Choice made two acquisitions during the year, buying cross-country skiing and summer walking specialist Waymark Holidays in December last year and US-based outdoor activity business Trek America in July.

Mr Long added the company had "never been in better shape" as it announced a 13 per cent increase in its full-year dividend to 5p per share.

Its results were in sharp contrast to struggling rival MyTravel.

It confirmed two directors had quit before tomorrow's announcement of full-year post pre-tax losses of £350 million, a figure which will rise to more than £600 million once exceptional items are added.

The debt-ridden tour operator has been undergoing a costly restructuring since last year and has issued two profit warnings in the past three months.

Duncan Wilson, the chief executive of the UK and Ireland arm of MyTravel, quit last week following the warning in early November that summer trading had been "weaker than expected".

His departure was followed yesterday by aviation director Bill McGrorty and overseas purchasing director Bill Allen.

MyTravel's brands include Airtours Holidays, long-haul specialists Tradewinds, Bridge Travel and Panorama.

Wednesday December 10, 2003