Thomas Cook shares fly after quick recovery

 
Marion Dakers
SHARES in Thomas Cook soared almost 16 per cent yesterday after the embattled holiday company said its plans to turn itself around were ahead of schedule.

Thomas Cook, which started life in 1841 offering train rides to temperance supporters in the Midlands, said the new management team have managed to stabilise its finances since the summer.

Chief executive Harriet Green’s long-awaited strategy review confirmed that the group will cut 2,500 jobs, as it closes almost a fifth of branches to take its high street estate down to 874.

Thomas Cook hopes to make more than half of its UK bookings through a new online platform by 2015, up from a quarter last year, as part of its plan to generate £500m in revenues from new products over the same period.

Thomas Cook’s other cost-cutting measures are intended to trim £350m a year from the firm’s spending by 2015.

“We need to move from turnaround to transformation now and create a simplified, restructured business, which translates our strengths into profitable growth,” Green told reporters.

The company said it would also make disposals to raise up to £150m, with analysts putting luxury travel agent Elegant Resorts, long-haul specialist Gold Medal and ski firm Neilson in the potential firing line.

The group will also boost its presence in the concept hotels, city break and winter sun markets over the next five years, while seeking better terms from hotel partners.

But the firm made no mention of a rumoured £400m share placing, expected in the next few weeks.

Trading in the first quarter of the year “continues to be robust and summer trading is progressing well with improved margins”, the firm said in its statement yesterday.

Shares closed at 100.75p, the highest level since a string of profit warnings in 2011, valuing the company at £911.3m.