Cook sees upturn but admits market remains 'challenging'

Cook sees upturn but admits market remains 'challenging'

Thomas Cook today described summer trading as “more encouraging” while admitting that the financial year will be challenging.

Overall UK summer bookings at the end of March are down by 2% over the same period last year, with specialist and independent bookings up by 14%.

Mainstream bookings are down by 10% with 17% less capacity to sell over summer 2011,

“Following recent improvements to our websites, mainstream online bookings have seen a substantial uplift and were up 19% in the last four weeks,” the company said in a trading update this morning.

Winter trading was described as “subdued” with an improvement in bookings in recent weeks. Bookings from the UK for winter 2011-12 are down by a total of 4% with mainstream down by 9% and specialists and independent up by 1%.

“The UK programme is currently 91% booked overall which is broadly in line with last year,” the company said.

“Mainstream bookings have continued to improve since we last reported and are now down 9% broadly in line with planned capacity reductions, whilst overall pricing has remained stable.”

Looking forward, the statement said:  “As we stated in our first quarter results, we continue to expect 2011/12 to be a challenging year given the economic backdrop and difficult trading environment, particularly for winter.

“The trends which we saw in the first quarter have continued through the second quarter, but summer trading is more encouraging.”

Group chief executive Sam Weihagen said: "Trading across the group has been stable since we last reported and in line with expectations.

“In the last few weeks we have seen an improvement in UK booking trends, helped by our recently launched advertising campaign and upgrades to our thomascook.com website."

Cook revealed that it had received a “good level of interest” in its Indian business which is being sold as part of a disposal of non-core assets as the group seeks to tackle a debt mountain. The disposal process is progressing well, the company said.

Summer trading across all markets in west and east Europe “remains challenging,” largely driven by lower consumer demand, and is particularly challenging in France, Cook said.

“However, bookings in recent weeks have shown a better trend. Further capacity has been taken out as part of our actions to de-risk the business and turnaround the performance in these markets."

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