Thomas Cook moderates growth forecast for 2015

Thomas Cook moderates growth forecast for 2015Thomas Cook has seen double-digit increases in online bookings in the past year as underlying group earnings rose by 44% to £323 million.

Web penetration rose by 36% to 38% year-on-year with improved web performance in the UK, Germany and Northern Europe.

Demand for concept hotels rose, with summer 2014 bookings up by 43%.

All businesses improved profitability with underlying UK earnings margin up from 2.2% to 3.5% – hitting targets.

Annual group pre-tax losses were cut from £213 million to £115 million.

But Cook admitted that “reflecting the tougher trading environment our outlook for growth in FY15, while still positive, is more measured.

“Accordingly, we now expect to deliver further growth this year at a more moderate pace.”

A first wave of cost savings and profit improvements of £206 million brought overall benefits to £400 million in the year to September. The target for 2015 has been raised from £460 million to more than £500 million.

A second wave target for the 2018 financial year remains at £400 million.

“We have de-risked our business by reducing low profit and high risk operations, through business disposals, strategic reductions in risk capacity in France and Russia, and the removal from sale of low quality product,” Cook said.

“Our work to transform Thomas Cook continues.  We are just two years into our major change programmes and, whilst the transformation has already delivered substantial benefits to the business and its stakeholders, there is more to do.

“We are confident that our robust product strategy, our focus on digital and our continuing profit improvement initiatives will enable us to deliver further significant value this year and beyond.”

Cook said it was encouraged by booking and pricing trends for summer 2015 with capacity from the UK 23% sold, with bookings up by 8% and prices 1% higher.

Sourced from Travel Weekly

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