MyTravelGroup Hits Turbulence

U.K. company’s stock takes a major tumble after news of accounting errors

MyTravelGroup plc stock is in a pile of trouble, having lost more than half its value recently.

Better known by its original name Airtours, the U.K.-based company saw its stock fall even farther last week. Although the company won’t show the $165 million profit previously projected for this year, it still expects to make a profit of about $75 million, according to a spokesman.

The stock started its tumble as the firm revealed a number of accounting errors combined with aggressive accounting practices sanctioned by previous auditors Arthur Andersen and successors Deloitte & Touche.

A third profits warning this year led to the recent resignation of CEO Tim Byrne; he was succeeded by Peter McHugh, who has been CEO of MyTravel USA.

The group, which operates a major, vertically integrated tour business in the United Kingdom, also owns companies on the Continent and in North America, most notably SunTrips in San Jose, Calif., and Travel Services International in Florida.

TSI encompasses Auto Europe and a number of big cruise retailers, among other operations.

The spokesman said he believed all the bad news was out now and that the markets could put the stock price back into balance with real business results after third-quarter results are released on Nov. 23.

Meanwhile, he said, there seemed to be “no knock-on effects” from the stock tumble on the operations side in the United States.

He added that MyTravel was not looking to sell its U.S. division.

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