Thomas Cook gets north European boost but takes a knock from currency woes
Thomas Cook has reported trading in line with expectations, with the summer of 2015 more than 50 per cent sold. The UK business continues to build on last year with Thomas Cook's Concept Hotels growing 20 per cent from the previous year.
Bookings at thomascook.com have climbed 10 per cent. However, the company took a hit currency woes. The group said in its trading update "if current rates for Euro and Swedish Krona were maintained throughout the remainder of FY15, there would be a negative year-on-year translation impact of approximately £25m."
Why it's interesting
Yesterday, the ex-managing director of Tui UK Chris Mottershead was appointed as business development director. He said, “they (Thomas Cook) have already started to introduce differentiated product; having unique hotels that are specific to Thomas Cook is critical.”
Numis expected an upbeat report with a strong rise in bookings. It's still relatively recently that Peter Fankhauser took on the top job at the company after the surprise departure in November of Harriet Green. Green was well respected for narrowing losses at the business thanks to a significant cost cutting programme.
When Green joined in 2012, shares had been hovering around 15p. When she left in November, they were trading at 137p. Thomas Cook enjoyed a big share price boost after Chinese billionaire Guo Guangchang took a five per cent stake in the company at the beginning of the month.
Guangchang's conglomerate Fosun International paid £91.8m for 73,135,777 of the company's ordinary shares. The partnership will allow Thomas Cook to work with other travel and leisure businesses owned by the conglomerate.
What Thomas Cook said
Peter Fankhauser, Chief Executive of Thomas Cook, commented:
Our bookings for the full year are developing well, especially in the UK and Airlines Germany. The tough trading conditions we reported previously in some markets are showing early signs of improvement, and our New Product and Winter Sun initiatives are leading to growth. I am confident that, by continuing to rigorously implement our strategy, we will further improve business performance.
The company's winter performance is in line with expectations. Booking across central and northern Europe continue to rise and these are the company's strong suits. But challenges persist with strong competition and excess airline capacity.