STRUGGLING Lancashire holiday firm MyTravel has dealt investors a fresh blow with its second profits warning in three months.

City experts said it was most unusual for a holiday firm to issue a warning now because summer is its busiest trading period.

Shares in the debt-ridden company tumbled almost 10 per cent to 16.25p after it admitted margins had been weaker than expected given the high proportion of holidays sold at knock-down prices to fill last minute seats.

In a circular to shareholders asking for their approval on the sale of a string of businesses to help its ailing balance sheet, MyTravel said the UK holiday market had been weaker than expected in late summer with more trips sold as "lates".

The company, formerly known as Airtours, employs more than 300 people at sites in Helmshore and Accrington. It said it now expected to make an operating loss for the second half.

The warning comes just over three months after MyTravel scaled back expectations set out with its first half results in June.

With the holiday market looking up after the war in Iraq, MyTravel had been hoping for a better summer than last year. But it issued a statement in August warning that margins over the summer had been lower than expected and the picture in second half would be similar to that of a year earlier.

The revised update came in a circular to shareholders ahead of an extraordinary general meeting on November 17 to seek approval for three major disposals.

MyTravel wants shareholders to back the sale of its US cruise operations, the car rental business Auto Europe and the hotel room distribution operation World Choice Travel in deals worth almost £147million.