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Crisis-hit Cook buoyed by interim results and booking levels for summer. By IAN TAYLOR CONTINUED FROM BACK COVER
last week, but it remained 8% up on six months ago and close to the level it has been at since early March. Fankhauser began the results presentation
by saying: “I’m deeply sorry, as a father myself, about the tragic deaths of Bobby and Christi Shepherd. There are things we, as a company, could have done better during the last nine years – in particular, how we have conducted our relations with the family.” He added: “I am not going to repeat the
mistakes of the past by talking about the family in public. My intention is to see how we can help them move on with their lives.” Anne Grube, equity research analyst at Morgan
Stanley, said Fankhauser’s apology had been “very positively received”. She added: “It is too early to see if there is any effect on bookings.” However, the Financial Times reported
the furore had “damaged an already ailing company”. The newspaper suggested: “The company’s weakness is that it remains a high street business.” It quoted an unnamed “investment banker” saying: “They have a huge legacy of shops and that is dragging them down.” The Financial Times also reported Cook
“may have to buy hundreds more stores from the Co-operative Group” under the terms of the pair’s joint venture. This terminates in September 2016 when the Co-op could require Cook to buy the stores for about £82 million. Brumby dismissed such concerns, saying: “It’s not a new issue. The £82 million in question is already provided for. Thomas Cook may be called upon to make the payment, which they would probably rather not do, but it has been known about for a few years.” Referring to the media storm, Brumby said: “It’s cheap copy and papers can regurgitate it with very small additions.” Grube insisted Morgan Stanley’s appraisal of the group had been unaffected by the furore, saying: “We downgraded our forecast [for Thomas Cook] but that was based on the foreign exchange [outlook].” A Cook spokesman said: “We reject the
suggestion we have a huge legacy of shops. The high street is a huge part of Thomas Cook’s strategy. It’s important we’re there for customers however and wherever they look for us.” Of the joint venture with The Co-operative
Travel, he said: “We are looking at the JV and considering what comes next, but I don’t think a decision has been made.”
68 •
travelweekly.co.uk — 28 May 2015 Ian Taylor
Thomas Cook reported a 22% reduction in group operating losses for the six months to March and described summer trading as “encouraging” in half-year results published last week. The group’s operating loss for the
half year was £220 million, down from £283 million a year ago, but Cook put the ‘underlying’ loss at £173 million, an improvement of 9% on 2014. Revenue for the six months fell from just
over £3 billion a year ago to £2.74 billion, although Cook reported the comparison on a ‘like-for-like basis’ showed a 1% rise. Operating profits for the 12 months to
March almost trebled from £43 million to £117 million. Cook reported the UK business performed “particularly well” and claimed “rapidly growing” demand for holidays to its own-brand [concept] hotels”. The group aims to extend these through
a joint initiative with Chinese investment group and new Club Med owner Fosun. The pair are finalising “a hotel investment platform to acquire 30 own-brand hotels,
UK BOOKINGS FOR SUMMER 2015 UP 3% ON LAST YEAR
The Thomas Cook UK business “traded strongly” in the six months to March, cutting its winter operating losses by £25 million on last year to £131 million. Cook attributed this to “a more effective
product portfolio and leaner cost structure”, but added: “We expanded our long-haul business, contributing to an increase in revenue of 3% on a like-for-like basis.” The company said improved performance
on margin in the UK “reflects a strong recovery from a weak result in 2014, when margin was adversely impacted by disruption in Egypt and overcapacity to the Canary Islands”. December’s relaunch of the Thomas Cook Signature brand has produced a 15% rise in
COOK CUTS WINTER LOSSES AND POSTS 172% RISE IN FULL-YEAROPERATING PROFITS
targeting the first acquisitions this year”. Chief executive Peter Fankhauser said: “Our performance in the first half is a solid foundation for the full year. I’m confident we can continue to make Thomas Cook a stronger and more profitable company.” The group refurbished “more than a
quarter” of its 220 own-brand hotels last winter, making more than 1,500 newly renovated rooms available this summer. Online bookings accounted for 38% of
the total in the six months, the same as last year and below the 50% target for 2015. But Cook reported “substantially increased mobile sales”, with 33% of online bookings made by tablet or smartphone.
UK luxury bookings for summer 2015. UK sales for summer 2015 were up 3%
year on year to May 10, with average selling prices down 1%, but with July and August “particularly well sold, at good margins”. Bookings in continental Europe were
down 4% year on year to May and average prices flat. However, Cook reported a 9% rise in bookings with German airline Condor. The company said bookings for winter 2015-16 had started well, particularly in the UK “where customer numbers are 4% higher than this time last year”.
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