Thomas Cook’s revival stalls after CEO’s exit
THOMAS Cook shares plunged 5.5 per cent yesterday as revenues fell on the back of tough trading conditions in the company’s European market.
In contrast to rival TUI, the company failed to successfully raise the prices of its holidays, with prices in its UK market declining one per cent for the coming summer, whilst stagnating for most European destinations.
Thomas Cook has relied on its UK business which had a five per cent rise in summer bookings. The firm said its German market was suffering from more customers booking later.
The company was in the process of being turned around by former CEO Harriet Green, before her unexpected departure last November.
Green quit the company amid reports of an increasingly acrimonious relationship with members of the company’s board.
Yesterday’s quarterly results showed Thomas Cook’s turnaround plans have stalled, with revenue of £1.5bn, down from £1.7bn a year earlier.
Full year revenue fell, from £9.3bn to £8.5bn. Compared to the previous year, gross profits fell from £365m to £327m meaning the company experienced pre-tax losses of £115m, albeit down from last year’s figure of £161m.
Chief executive Peter Fankhauser, appointed to replace Green in the surprise announcement last November, said the company was well placed despite current headwinds.
“The trading environment in many of our markets continues to be tough, but we believe the measures we are taking to improve our businesses will continue to strengthen our competitive position,” he said.