Thomas Cook reports 'robust' UK trading in first quarter

Thomas Cook reports 'robust' UK trading in first quarter

Thomas Cook cut first quarter winter losses by 42% to £73 million.

Europe’s second largest travel group saw losses reduced by £53 million against the same period a year earlier.

Like-for-like revenue was up by 1.6%, or £24 million, to £1,519 million. Cook reported “robust trading” in the UK, with a significant increase in bookings for both winter and summer.

Overall trading was described as being in line with expectations with the current winter progamme 85% sold – broadly in line with last year.

The summer 2015 programme is 41% sold, a 3% improvement on this time last year, with UK bookings 5% higher with prices 1% lower.

The UK business continued to show improved profitability, with an increase in like-for-like earnings (EBIT) of £7 million in the three months to December 31. This was down to an enhanced product offering including a high proportion of concept hotels and long haul destinations combined with cost cuts.

Bookings via the main UK website rose by 24% for December alone, and by 10% for the quarter.

However, the removal of other low-margin hotel only business has led group web penetration to remain at 38% over the last 12 months.

The UK margin improved to 3.7% over the last 12 months from 2.3%, reflecting the impact of operational improvements including cost out initiatives and better product, Cook said.

The company said trading conditions in Continental Europe and parts of Northern Europe have been tougher than the UK, although there has been a “significant improvement” in recent weeks.

Turkey and the Canary Islands continue to be the most popular destinations, volumes to Egypt are improving, and the USA is growing strongly driven by new routes.

Airlines Germany was described as performing well, especially in the long haul segment, “with the impact of strong competition evident in the short and medium haul market”.

Chief executive Peter Fankhauser, who took over from Harriet Green last autumn,  said: "Our performance in the quarter demonstrates the strong progress we continue to make in transforming Thomas Cook.

“We are particularly pleased with the performance of our UK business, which is now achieving its highest underlying EBIT margin since 2009, while at a group level we have nearly halved our first quarter operating loss.

“Although it's early days, our strategy for profitable growth through new products and winter sun is delivering results.

“The trading environment in many of our markets continues to be tough, but we believe the measures we are taking to improve our businesses will continue to strengthen our competitive position.

“Our strategy remains to generate sustainable profitable growth by providing differentiated and exclusive holidays while driving efficiencies in production and distribution, underpinned by digital excellence.

“I am confident that our focus on rigorous implementation will continue to drive significant improvements in the group's performance."


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