The new boss of Thomas Cook is to deliver a plan to reinvigorate Europe’s second largest travel group by next spring.
Harriet Green made her first statement since joining last week as group chief executive as Cook reported strong late summer sales in the past 12 weeks although cumulative UK bookings were down by 1% at the end of July.
Green said: “My initial focus is to review our businesses, quickly establish priorities and develop a clear plan to reinvigorate Thomas Cook, which I expect to be able to present to you next spring.
“The group has been through a difficult period, but much has been achieved which has strengthened the balance sheet and improved liquidity. The strength of the Group’s brands and the quality of its businesses and people provides a foundation from which to bring the business back to full strength.”
Cook reported an operating loss of £26.5 million for the three months to June 30, down from a profit of £20.1 million the same period last year based on a 6% decline in revenue to £2.3 billion.
“This reflects the challenging trading environments across all markets and increased operating costs as a result of acquisitions and input cost inflation,” Cook said.
Re-organisation costs in the UK, North America and West Europe came in at more than £33 million in the quarter together with professional fees relating to the group’s financing.
Net debt at June 30 was £1,099.3 million against £902.5 million a year ago due to increased seasonal losses. Cook’s disposal programme has so far generated proceeds of £164.8 million.
The completion of the sale and leaseback of eight further aircraft and the disposal of HCV in July generated an additional £122 million which have been received and the disposal of Cook’s Indian business is expected to deliver a further £87 million.
“The recent poor weather across many of our markets has boosted recent sales after a relatively subdued market in April and May,” Cook said.
‘Overall UK bookings remain stable. Mainstream bookings have shown a significant improvement in recent weeks and there is now 33% less left to sell, whilst pricing over the last four weeks is up 8%, demonstrating that yield measures introduced as part of the turnaround plan are starting to take effect.”
Differentiated product accounts for 35% of mainstream holidays, up 7 percentage points on last year. The programme is 88% sold and departures in June and July have achieved record load factors. Bookings remain strong for the specialist & independent business with bookings up 8% year on year.
Cook admitted that sales of corporate Olympic and Paralympic packages have been “challenging”.
The company said: “The outlook for this year remains challenging. However, recent booking trends are encouraging and the UK turnaround plan is delivering against its objectives.
“The group’s quarterly financial trend is showing signs of improvement and we expect that in the fourth quarter the variance will narrow delivering a full year result broadly in line with expectations.”