PROFITS AT Dún Laoghaire-based tour operator and travel agent Sunway Holidays more than halved last year to €194,136 as the company expanded its business.

Tanya Airey, Sunway's managing director, told The Irish Times that the decline in profits was due to the costs associated with the expansion of its activities to North America and its launch of skiing trips in Europe.

Accounts just filed for the company show that its after-tax profit declined from €512,746 in 2006.

No revenue figure is given but the accounts show that Sunway's gross profit fell by 3.5 per cent to just under €7.4 million in the year to the end of October 2007.

Its administrative expenses rose marginally to almost €7.2 million. This gave it an operating profit of €220,060 compared with €570,514 in 2006.

Ms Airey said bookings for the year to date had been encouraging but said the next two months would be crucial in determining the outcome for the year as a whole for Sunway.

"We're about 5-10 per cent ahead of last year but we won't know until the end of the [summer] season," she said.

"One month can make a big difference in this business. Obviously when it rains, it helps a lot."

Ms Airey said recent increases in jet fuel prices had not yet been passed on to consumers by way of surcharge. "We're absorbing it at the moment."

Sunway's accounts show it spent €1.49 million on acquisitions in the year to the end of October 2007, when the company acquired Dublin agent O'Mara Travel.

The accounts show that O'Mara had capital and reserves of €462,045 at the end of the financial year having recorded a profit in 2007 of €43,850.

As a result of the acquisitions, Sunway's staff numbers increased to 83 from 54 in 2006 but its total employment costs declined to €4 million last year from €4.6 million a year earlier.

Its wages and salaries costs declined by 6.4 per cent to €3.6 million while its pension expenses were down by 61 per cent to €254,602.

Directors' pay was €1.8 million in 2007, down just more than €1 million on the previous year.