New Thomas Cook chief executive Harriet Green described the £590 million overall annual loss the group reported as “unacceptable” but said the company was on the road to recovery.
Fielding questions from the media after Cook reported its annual results this morning, Green, who has been in the job just 17 weeks, said last year’s results were a “trough from which we can only improve”.
She said the group was actually showing underlying operational profitability and that she was encouraged by an upturn in fourth quarter trading, although she said it was still too early to talk about next summer.
“Thomas Cook, in my opinion, is not broken – it’s viable and working and we have turned a corner. There is huge potential here. There is a lot to do but we have started a new chapter at Thomas Cook,” Green said.
Green signalled further efficiency changes at the company, with a further £100 million in cost cutting measures promised over the next three years.
The targets were “robust” and Green said “I guarantee these are only the start. We are going to be obsessed about customer care while driving innovation in all that we do.”
“We need to build a more efficient organisation and break down silos. We need to reduce costs and start generating cash,” Green said.
Of the £100 million in cost cutting, Green revealed £40 million would come from airline operations, £35 million from internal re-structuring and the remainder from taking out unnecessary technology platforms that do not benefit the customer.
Chief financial officer Michael Healy said the group had reduced its net debt during the year by £103 million and it would continue to focus in driving this down by improving cash generation and improving the management of working capital and additional asset sales.
Asked about potential job cuts Green would not be drawn on numbers but said she would be forging a “more streamlined business”.
“Because we have so many duplicated activities, so many silos across the group we will have a more streamlined business, but I do not know what these numbers will look like or where that impact will be.
“We employ 31,000 people, 17,000 in the UK. As we reshape we may have a greater need for certain skills, whether it’s around the web or technology, and less in other areas, as we continue to enhance the customer experience.”
Green said Cook has a “very significant and important” high street presence but that Cook will continue to look at the profitability and the customer service of each of its channels as it forges an “omni-channel” future.
“We are looking at it based on what consumers need and want. As of last year we streamlined by about 147 stores and I think based on what customers are saying that has not been to the detriment of customer service.”
Green revealed Cook is developing a concept high street store in Leeds as it seeks to offer the best distribution channel for its customers.