UK: Thomas Cook upbeat as loss narrows

Tour operator Thomas Cook today said it was on course to meet expectations after trading for the summer remained strong in “all major markets”.

The company, which merged with former Airtours operator MyTravel last June, posted an underlying pre-tax loss of £177.5m (€224m) in the six months to April 30, an improvement of 15% on the previous year’s winter figures.

Thomas Cook also said it was on track to hit its £480m (€606m) operating profit target for the financial year 2009 to 2010. Shares rose by more than 3% following today’s half-year figures.

Chief executive Manny Fontenla-Novoa said: “I’m delighted with our performance over the winter and we are in a very good position for the summer season. I remain confident that we will achieve our goals for this year.”

The company said it had 19% fewer holidays to sell in the UK than at this time last year.

It told investors: “We are particularly encouraged by our much lower level of stock left to sell in short haul and long haul.

“Average selling prices are cumulatively 5% ahead and over the last six weeks have been 14% ahead of the corresponding prior year period. Margins are also ahead of the prior year.”

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said management had acted on some harsh lessons from the past, resulting in reduced capacity and fewer holidays left to sell.

He added: “These are sturdy half year results, with the normal seasonal loss having been reduced and the group so far appearing to remain relatively unaffected by the consumer retrenchment.”

Mr Bowman said it appeared spending on holidays had moved from discretionary to essential in the minds of consumers – as was the case in the downturn of the early 1990s.