Thomas Cook claims its “transformation remains on track” as it revealed it expects its full-year earnings would be in the range of £315 million and £335 million.
Cook expects to deliver growth this financial year to November of between £89 million and £109 million and said growth would be the equivalent of between 39% and 48%.
Last financial year the travel giant reported like-for-like earnings before interest and tax of £102 million.
Cook said it also remains hopeful the net debt will reduce further to between £300 million and £350 million by the end of this financial year, having reduced from £788 million at the end of the 2012 to £421 million last September.
The firm expects all parts of the business to deliver results in quarter four, despite a dip in the German market which has caused weaker margins due a combination of reduced demand and excess capacity.
The operator said UK bookings were in line with last year but that that headline average selling prices were 4% lower than last year. The fall was attributed to a “change in product mix” and a “greater level of market capacity”.
Cook said it expects selling prices to improve as it looks to increase the number of exclusive hotel offerings, adding that it remained confident the UK business would achieve pre tax earning margin targets of 3.5% for this financial year, and its 5% target for the 2015 financial year.
In a statement Cook added: “Bookings for exclusive hotel products have continued to show strong growth for the Summer 2014 and Winter 14/15 seasons. We remain encouraged by early Winter 14/15 bookings in the UK; with 29% of capacity sold and bookings and average selling prices higher than last year.”
Harriet Green, group chief executive, said: ““The successful transformation of our company continues. We are also very encouraged by the progress we are making against our most important strategic targets and KPIs.
“In particular, we have delivered more Wave 1 and Wave 2 cost out and profit improvement benefits, a higher rate of web bookings and importantly, given the encouraging customer demand for our exclusive Concept and Partnership hotels, more opportunities for profitable growth.
“We expect our operational performance in this second year of our transformation to show a material improvement on FY13, notwithstanding the impact this year of economic and geopolitical factors on our customers.
“Our achievements over the last 24 months demonstrate the impact of a transformed team capable of delivering significantly greater shareholder value in the future.
“I look forward to sharing more progress on our targets and opportunities for sustainable profitable growth at our full year results in November, when we expect to report a ninth consecutive quarter of improved profitability.”
Cook said it looked forward to reporting a “ninth consecutive quarter of increased profitability in the final three months of this financial year”.
Booking volumes in the Summer 14 ‘lates’ market indicate a later booking pattern compared to last year in all of major source markets, according to Cook.
The statement added: “The impact of continuing price softness, largely due to higher levels of market capacity, has been offset by the acceleration of our cost out measures.”