Thomas Cook plots more cost cuts as summer holiday sales match forecasts

 
Marion Dakers
THOMAS Cook’s restructuring efforts yielded a small profit in the third quarter, and cost cuts are ahead of schedule, the firm said yesterday.

The travel group posted earnings before interest and tax of £1m, compared to a £45m loss in the same period last year.

The firm completed a £1.6bn refinancing in the quarter, helping to slash its net debt by more than half to £452m.

Revenues rose 0.4 per cent to £5.58bn in the nine months to the end of June, while pre-tax losses narrowed from £667m last year to £470m.

Thomas Cook’s cost cutting accelerated, with £31m of savings taking the firm towards its goal to save £170m this year.

The firm has raised its 2015 target by £10m to £400m.

“However, this is just the start,” said Harriet Green, who took over as chief executive a year ago.

“We see huge potential in Thomas Cook and its realisation remains our overriding priority. We look forward to delivering much more for all our stakeholders.

“Current bookings match our expectations and, as we continue to focus on managing capacity with demand, we are optimistic that we will maintain satisfactory prices and margins during the remainder of the summer season.”

The 172-year-old group, which was rescued by its lenders two years ago, is half-way through a turnaround that has cost 2,500 jobs and 195 outlets in the UK.

Shares in Thomas Cook, which have risen more than ten-fold since Green took charge in July 2012, closed up four per cent at 159.7p.

“We believe Thomas Cook is at the beginning of its transformation project and the confidence displayed by the management team leads us to believe that there remains much more cost to be removed from the group,” said Karl Burns at Panmure Gordon, which has a “buy” rating on the stock.