Bumper summer bookings help narrow losses for Thomas Cook

Holiday operator Thomas Cook posted its half-year results for the six months to 31 March on Thursday, reporting like-for-like revenue up 3% to £2.99bn, which the board said reflected strong winter demand to Spain and long-haul destinations.

The FTSE 250 company’s gross margin was down 40 basis points, mainly due to weaker trading at Condor as previously highlighted, although its seasonal underlying EBIT loss improved by £2m to £177m.

Its seasonal loss for the period after tax improved by £27m to £272m.

Thomas Cook had net debt of £794m at period end - a £34m improvement, which the board said reflected “strong” bookings for summer 2017.

“Thomas Cook has delivered a good performance in the first six months,” said chief executive Peter Fankhauser.

“The progress we've made on our strategy helped achieve a 3% increase in revenues, with strong customer demand for our holidays despite the competitive environment.”

Fankhauser said the actions taken by the company to improve its holiday offering - managing its portfolio of hotels more tightly for quality - were delivering good results.

“Our customer satisfaction score increased by eight points compared with the same time last year.

“I am confident we can increase this further, with the roll out of our successful 24-hour hotel satisfaction promise to 80% of customers in our core sun & beach hotels this summer, and other exciting new initiatives in the pipeline.”

The company said it also made great progress in developing its own-brand hotels and resorts, which gave customers a “unique” Thomas Cook experience.

“We're planning 11 new hotel launches this summer including our new family-friendly Casa Cook in Kos, complete with its own beach club, and our first hotel in Sicily, the Sentido Acacia Marina,” Fankhauser said.

“We also have a further 11 openings in the pipeline for the next 18 months, including at least two new Casa Cook hotels.”

Looking ahead to the key summer season, Fankhauser said the board was seeing “strong” customer demand across most of its markets.

“Greece continues to be the standout destination for Summer 2017 while customers are also seeking out smaller European destinations like Cyprus and Bulgaria, as well as travelling further afield.

“In contrast, following strong growth last year, bookings to the Spanish Islands have levelled off in a very competitive market.”

Fankhauser said he was also pleased with the progress made in the group airlines business.

Bookings were up significantly for the summer, boosted by the addition of 15 new destinations to the flight programme.

“In our German airline, Condor, the actions we've taken after the market disruption of last year have started to come through, and we are confident that Condor will return to profit for the full year.

“Despite continued overcapacity in the airline market and strong competition particularly in our UK business, based on current trading we expect underlying EBIT for the full year to be in line with current market expectations.”

Fankhauser said that, looking across the group, he could see “real momentum” behind the board’s strategy for profitable growth.

“By putting a clear focus on giving customers the very best experience when they holiday with Thomas Cook, and making our operations more efficient, I am confident that we can continue to transform the business and deliver increased value to shareholders.”