Thomas Cook continues to expect this year to be “challenging” citing the economic backdrop and difficult trading environment with “particularly poor” performances in its North American and French businesses.
The message came after the group revealed steeper winter half year losses of £643 million, including £300 million of non-cash goodwill impairments, up from £197.9 million.
The seasonal underlying loss from operations was £263 million, an increase of £97m on the same time a year earlier.
This reflects the inclusion of losses from acquired businesses in Russia (£10 million) and the Co-op in the UK (£15 million).
“The difficult trading environment increased losses, in particular the impact of MENA on the French result (£17 million increased loss) and the poor trading in the North American business (£25 million worse than prior year),” Cook said.
“Seasonal losses in the UK business are flat year on year excluding the acquired Co-op seasonal losses, whilst within Central Europe, our German business performed well with a 58% reduction in the seasonal operating loss at constant currency.”
Looking forward, the company said: “Whilst our booking position for the second half has improved trading will be dependent on how well the group performs during the important lates market.”
Revenue in Cook’s UK business was down by almost £30 million to £993.1 million in the six months to March resulting in the underlying loss increasing by £14.9 million to £173.6 million.
This reflected a cut in capacity in its mainstream and airline operations.
Controlled distribution increased to more than 82% due to the merger with the Co-operative group and Midlands Co-operative agencies.
“As previously announced, a rationalisation programme is underway to maximize the efficiency of the combined store portfolio with the main benefit of the merger expected to be seen in the second half of the year,” Cook said.
Chief executive Sam Weihagen said: “This has been a period of significant change for the group.
“At the beginning of this month we were delighted to announce the agreement with our banking group of longer term and more flexible funding.
“This, combined with the sale of Thomas Cook India, the sale and leaseback of some of our aircraft and the disposal of other non-core assets, provides the group with a much stronger financial platform.
“From this platform, we can re-energise our business and begin to rebuild profitability, reduce debt and continue to provide a fantastic holiday experience for our customers.”