Thomas Cook has reported a loss before tax of £398m for the 12 months ended 30 September 2011, versus last year’s £42m profit. The company blamed the loss on exceptional charges of £573m, which included £428m of impairments and write-downs.

Full-year revenue increased by 10% (8% at constant currency) to £9.81bn on volume, price and mix gains and benefits from acquisitions.

There were good performances in the company’s Central Europe, Northern Europe and Airlines Germany divisions, offset by a fall in UK profit and the impact of disruption in the Middle East and North Africa, particularly in France, which resulted in a 16% reduction in overall underlying profit to £304m.

Thomas Cook said the implementation of a UK turnaround plan was underway, with a ‘thorough review’ of the profitability of its 1,300 shops showing the need for a ‘phased closure of circa 200 under-performing shops where leases expire within the next two years’.

The turnaround plan is expected to deliver £110m annualised improvement in profitability, following a phased build-up over three years.
 
Sam Weihagen, group chief executive, Thomas Cook Group plc said: "This has been a very challenging year for the group, despite which we still delivered an underlying operating profit of over £300m.

‘We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance. We continue to take action to substantially strengthen the balance sheet and the board is undertaking a full strategic review.

‘I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value.

‘Customers have been very supportive in recent weeks and are continuing to book with Thomas Cook. Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well.

‘For over 170 years Thomas Cook has provided customers with fantastic holiday experiences and we will continue to do so."

Weihagen told the BBC that 'up to 1,000' jobs would be lost.