New product and pricing helps Thomas Cook UK hit profits high

AN improved performance by Thomas Cook in the UK has helped its German parent company return to profit for the first time in four years.

The group posted profits, after taxes and minority interests, of £105.4 million for the 12 months to October 31 2005.

The figure compares to losses of £176.4 million for the previous 12 months ­ a turnaround of £281.8 million.

The company cited an enhanced product mix and improved pricing measures in the UK as a key factor in recording group sales of £7.7 billion.

The group has recorded its highest ever gross profit margin of 24% following a 0.5% increase.

Thomas Cook group finance chief Ludger Heuberg said the UK and Ireland division achieved the best level of profitability group-wide.

However, details of the UK¹s profit performance will not be published until later in the week.

The group results did show the UK division posted sales of £2.5 million for the 12 months compared to £2.3 million the year before.

Meanwhile, the group is changing its strategy in a bid to move away from the vertically integrated company structure to increase sales by up to 10% over the next three years.

Chief executive Thomas Holtrop said the company aims to reduce its fixed capacity costs.

“We are gradually departing from the ideal of an integrated leisure travel group,” he said. “Not because the model itself was bad but because it has outlived its usefulness.”

Heuberg said the move would see the company compete more effectively in the component based and dynamic packaging markets.

“The classic package holiday is not the only offering in the market,” he said. “We will be more component based.”