Thomas Cook to offload Indian unit as strategic review continues
Shares in travel operator Thomas Cook rose strongly on Wednesday morning after the firm said it was offloading its stake in its Indian subsidiary as the group reported a 3% rise in first-quarter revenue.
The firm said it has received a number of unsolicited informal expressions of interest for its 77.1% stake in Thomas Cook India Limited (TCIL), the largest integrated foreign exchange and travel services company in the country. "If the offers are attractive then we will consider selling our stake and using the proceeds to continue to strengthen the group's balance sheet," said Chief Executive Sam Weihagen.
Meanwhile, revenues rose to £1,861m in the first three months of the year, helped by increased activity in Northern Europe and Airlines Germany and a maiden contribution of £68m from the Co-operative and the Russian joint ventures.
However, the company reported a seasonal underlying loss from operations of £91m, compared to the loss of £37m in the first quarter of last year, due to tougher trading conditions and rising fuel costs. "In particular, the West & East Europe segment reported significantly increased losses in part because of ongoing disruption in Middle East and North Africa," the company said.
Thomas Cook said it is on track to deliver the planned £35m benefit in the current financial year as a result of its UK turnaround strategy.
The outlook was a tad gloomy though. The firm said that it expects 2011/12 to be a challenging year due to the economic backdrop and difficult trading environment, particularly for winter. Nevertheless, the company said: "the trends which we have seen in the first quarter are expected to continue for the rest of the first half, but summer trading is more encouraging."
Shares were up 5.77% at 13.75p in early trading.