August 1, 2013
Thomas Cook made its first Q3 profit since staving off bankruptcy in 2011 and told investors to expect more from a restructuring that has seen it cut jobs, divest businesses, close branches and merge its airline operations.
The company has also halved its debt pile in order to help it recover from slumping sales due to the euro zone debt crisis, high fuel costs and social and political turmoil in popular leisure destinations such as Greece and Tunisia.
Earnings before interest and tax (EBIT) were GBP£1 million (USD$1.52 million) in the three months to July, up from the GBP£45 million loss it reported in the same period a year ago, the world's oldest travel firm said.
"This is just the start... we look forward to delivering much more," said Harriet Green, who took over as chief executive a year ago.
Green has pledged to boost profits by USD$500 million by 2015 by streamlining the business and moving more operations online.
The 172-year-old group, saved by an emergency bail-out from its lenders two years ago, is half way through a three-year turnaround plan, which has seen it cut 2,500 jobs and close 195 under-performing outlets in Britain.
The company has sold 85 percent of its planned capacity for the summer 2013 season and has 9 percent fewer packages left to sell in the late-bookings market than last year.
Green did warn, however, that that market last year was particularly strong due to bad weather around much of Europe, which is not a factor this year. The group is always profitable in its fourth quarter following the summer holiday period.
The tour operator said it delivered an additional GBP£31 million of cost cuts during the third quarter, taking the cumulative total for 2012-13 to GBP£138 million. Net debt more than halved to GBP£452 million in the last 12 months, it said.
"Thomas Cook is delivering, and we expect it to continue to do so," said Jefferies analyst Ian Rennardson. "With a strengthened balance sheet and cost savings on track, with more promised, the company is well on the road to rehabilitation."
(Reuters)
Thomas Cook made its first Q3 profit since staving off bankruptcy in 2011 and told investors to expect more from a restructuring that has seen it cut jobs, divest businesses, close branches and merge its airline operations.
The company has also halved its debt pile in order to help it recover from slumping sales due to the euro zone debt crisis, high fuel costs and social and political turmoil in popular leisure destinations such as Greece and Tunisia.
Earnings before interest and tax (EBIT) were GBP£1 million (USD$1.52 million) in the three months to July, up from the GBP£45 million loss it reported in the same period a year ago, the world's oldest travel firm said.
"This is just the start... we look forward to delivering much more," said Harriet Green, who took over as chief executive a year ago.
Green has pledged to boost profits by USD$500 million by 2015 by streamlining the business and moving more operations online.
The 172-year-old group, saved by an emergency bail-out from its lenders two years ago, is half way through a three-year turnaround plan, which has seen it cut 2,500 jobs and close 195 under-performing outlets in Britain.
The company has sold 85 percent of its planned capacity for the summer 2013 season and has 9 percent fewer packages left to sell in the late-bookings market than last year.
Green did warn, however, that that market last year was particularly strong due to bad weather around much of Europe, which is not a factor this year. The group is always profitable in its fourth quarter following the summer holiday period.
The tour operator said it delivered an additional GBP£31 million of cost cuts during the third quarter, taking the cumulative total for 2012-13 to GBP£138 million. Net debt more than halved to GBP£452 million in the last 12 months, it said.
"Thomas Cook is delivering, and we expect it to continue to do so," said Jefferies analyst Ian Rennardson. "With a strengthened balance sheet and cost savings on track, with more promised, the company is well on the road to rehabilitation."
(Reuters)