The combined Group successfully reduced the pro forma seasonal loss before tax in the 6 months to April 2007 by €25.4m, or 8%, to €293.0m (2006: loss before tax of €318.4m) according to figures released by Thomas Cook Group. The…
The combined Group successfully reduced the pro forma seasonal loss before tax in the 6 months to April 2007 by €25.4m, or 8%, to €293.0m (2006: loss before tax of €318.4m) according to figures released by Thomas Cook Group. The pro forma seasonal operating loss* in the 6 months to April 2007 was reduced by €22.9m, or 7%, to €323.1m (2006: loss of €346.0m).
In the MyTravel business, the operating loss* was reduced by 12% to €102.3m (2006: loss of €115.8m). In the Thomas Cook AG business, the operating loss* was reduced by 4% to €220.8m (2006: loss of €230.2m).
Thomas Cook also reported strong cash flow and balance sheet with progress being made towards integrating the two companies. Mr Bo Lerenius and Mr Hemjo Klein will join Thomas Cook Group plc Board as independent Non-Executive Directors with effect from 1 July 2007.
Current trading – Summer 07
Trading conditions in the UK remain challenging for summer 07. Consequently, Thomas Cook has taken actions throughout the year to reduce capacity year on year by 5%. Against this, cumulative bookings are 5% behind the prior year and the group has sold 74% of its capacity, which is in line with the prior year. Average selling prices are flat year on year.
In Northern Europe, cumulative bookings for summer 07 are currently 2% behind the prior year on 1% more capacity. To date, Thomas Cook has sold 70% of our capacity, which is 2% behind the prior year, and average selling prices are 3% up.
In Continental Europe, bookings are currently 7% behind the prior year with average selling prices 2% ahead. Trading conditions in the group`s largest market, Germany, remain challenging. However, the group continue to align capacity to the reduction in bookings.
In North America, cumulative bookings for summer 07, being the low season, are currently 27% behind the prior year. Capacity, however, is also down 29% following the removal of one aircraft from the plan. To date, Thomas Cook has sold 58% of our capacity, which is 2% up on the prior year, and average selling prices are 10% up.
In Airlines Germany, cumulative bookings for summer 07 are currently 9% behind the prior year but on 11% less capacity. Seat only bookings, representing 31% of total Airlines bookings to date, have reduced year on year by 7%, reflecting significantly reduced City business offset by a strong performance in long haul.
Outlook
While conditions for the summer remain challenging in a number of markets, the Board believes that in the absence of significant adverse events, such as the ones the industry experienced last year, trading conditions in the UK for the remainder of the summer season should be significantly improved. On that basis, the Board believes that its financial performance for the full year 2007 will be in line with its expectations.
Manny Fontenla Novoa, Joint Chief Executive, Thomas Cook Group plc said: “Thomas Cook Group plc is a robust business which is well placed strategically to take advantage of the significant opportunities for growth. The merger has created a very strong platform for us to compete in an increasingly diverse, growing and international travel market, bringing together complementary brands and increased geographic reach.”
“I would like to thank everyone who is involved in bringing these two businesses together and for successfully delivering this merger. Management has already made significant progress in building the foundations of this new dynamic business. Delivering the planned synergies of at least €140m (£95m) from the merger remains an important focus of our efforts.”
“Despite the additional effort required by all those involved in the merger process, our first pro forma results show a 7% improvement on the same period last year on the preexceptional operating profit line, demonstrating our on-going focus on trading performance. A record performance and strong pricing environment in our Northern European operations are particularly encouraging,” concluded Manny Fontenla Novoa.
* The (loss) / profit from operations is stated before exceptional items.
The pro forma loss before tax for the six months ended 30 April 2007 after net exceptional costs of €15.8m, net income from associates of €49.4m, net investment income of €0.9m and net finance costs of €4.4m was €293.0m. Net exceptional items are shown in note 4 to Appendix 1 and 2.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
