Thomas Cook Sees Progress Despite Spanish Softness
Thomas Cook Group said it made good financial progress during its fiscal full year, with demand for Greece and long-haul destinations balancing out a more competitive market in Spain.
The group reported revenue of a shade over GBP£9 billion (USD$12 billion), up from £7.81 billion, crediting a more customer focussed strategy for the lift.
“We now see that the deliberate decision we made to put the customer back at the heart of our business is bearing fruit,” chief executive Peter Fankhauser said. “Customers’ satisfaction with our holidays has increased strongly for a second consecutive year.”
Underlying EBIT earnings from operations came in at £330 million, a 9.3 percent increase on the previous year. Pre-tax profit of £46 million and after tax of £12 million were both improvements on FY 2016.
Stronger demand during the financial year pushed tour operator revenue up 14.4 percent to £7.12 billion, reflecting growth in both customer numbers and average selling prices in most markets. Lower margins in the UK, however, pushed underlying EBIT down £1 million to £250 million.
“Continental Europe grew strongly while our Nordic division enjoyed another excellent year. [But] after four consecutive years of profit growth, margins in our UK business declined due to a more competitive market environment, especially for holidays to Spain,” Fankhauser said.
Group airlines showed a solid improvement in performance, with EBIT up 42 percent to £115 million, due partly to the turnaround of its German airline Condor. Thomas Cook Airlines expanded long-haul flying from the UK and Germany, pushing the number of passengers carried to 18.5 million, up 5.4 percent on the previous year.
Looking forward, Thomas Cook expects its Continental Europe and Northern Europe tour operator businesses “to continue their good performance,” and said it has acted to improve its UK performance as a result of “challenging conditions.”
“Overall, based on current trading, I believe that we are well-positioned to achieve a full year operating result in line with market expectations,” CEO Fankhauser said.