p16 City Dec4 2/12/09 20:41 Page 16
news city & finance
ttglive.com
CITY REACTION TO BIG TWO’S RESULTS.
“They would still have made a profit but it
‘Good, but can do better’
would have been down without these synergy
benefits. But you can’t criticise them for that.
They have not squandered the benefits of the
mergers,” he said.
Mark Brumby at Astaire Securities said next
THOMAS Cook and Tui Travel were praised in the the business not just by lower revenue and year would be difficult for both firms.
City for making the most of benefits from their higher margins. Longer term they have got to “Rising unemployment, austere budgets across
mergers, but analysts warned they could not rely start getting volume back up,” he said. markets and a World Cup will do little to encour-
on capacity cuts and higher selling prices for Batram said both companies were well age travel,” he said. “Tax rises, interest rate rises
much longer. regarded for successfully negotiating their way and a possible further weakening in sterling will
Nick Batram, of KBC Peel Hunt, said the through the harshest recession in decades. not help and we see the industry as late-cycle.”
strategy would see the big two through another But he said their profit figures looked Investec recommended investors hold shares
difficult year in 2010 but that after that the City artificially healthy because they were still in both companies, saying both were in similar
would want to see them start growing volume. getting benefits from the mergers. Tui Travel, for positions. “Tui Travel’s full-year results reiterate
“You can only take out capacity for so example, would have made an operating profit the themes of Thomas Cook’s results
long. You have got to grow of £388 million rather than £443 million in and are strong.
the year to the end of September without “Winter trading is improving
the benefits of mergers – down on the and trading for summer
previous year. 2010 has started well.”
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16 04.12.2009
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