Thomas Cook posts recovery

LONDON - Reuters

Thomas Cook Group CEO Harriet Green speaks at a London event. AFP photo

British travel group Thomas Cook said it had seen a strong finish to its fourth quarter as its recovery plan cranked into gear, after a year in which operating profit nearly halved.

Thomas Cook said on Wednesday winter bookings were ahead of committed capacity in all markets at improved prices.

The group has been hit hard by the economic downturn, high fuel costs and social unrest in popular destinations. It has had to renegotiate bank loans and make disposals to cut debt.

Underlying operating profit fell 49 percent to 156 million pounds ($250 million) in the year to Sept. 30, in line with the forecast in a Reuters poll. Revenue fell 3.2 percent to 9.49 billion pounds, it said, adding: “Over 23 million customers enjoyed their holidays with us”.

Restructuring costs saw its pretax loss widen 22 percent to 485 million pounds, with the 171-year-old group seeing profit all in all its regions. as it carried 23 million passengers.

“These results reflect the major issues that Thomas Cook faced last year. They mask the material improvement that we made in the fourth quarter,” said chief executive Harriet Green, who arrived in July to revive the group’s fortunes.

“Thomas Cook, in my opinion, is not broken. It is viable and working, and we have turned the corner,” she said. The company said Green had bought 500,000 shares at 23 pence.

Its shares were up 1.0 percent to 24.25 pence at 1120 GMT.

Net debt fell 103 million pounds to 788 million, compared with a forecast for little change. The company said it would fall at least another 50 million pounds in its 2012/13 year.

“Net debt was lower than we had expected, and this should give some confidence that the new management team can deliver,” Peel Hunt analyst Nick Batram said.