…
Thomas Cook announced that it will not pay any further dividends this year as the Group tries to rebuild its balance sheet, dispose of assets and improve its financial flexibility.
A previously declared interim dividend of 3.75p per share will be paid on October 7.
In its pre-close trading update, Cook said its aim is to substantially reduce its debt over the next two to three years by disposing of assets worth up to £200m. It has already announced it is to shrink its UK airline by six aircraft this winter and stripped 500 hotels out of its summer 2012 programme, replacing them with 100 new properties.
It revealed UK capacity for the coming winter has been cut by 5% but bookings are down 7% on a year ago and the average selling price has slipped 3%, largely due to a reduction in long-haul routes. Cook said bookings for summer 2011 were mostly in line or ahead of capacity and the average selling price was up 4%.
The Group said it had performed well this year overall, but admitted that its performance had been impacted by its UK business and the disruption in the Middle East and North Africa. Its other businesses have done better, notably Northern Europe, where bookings were up 13%, Central Europe and its German airline.
“The Group delivered steady results for July and August, in line with our expectations, but September has been a more challenging month, particularly in our French business,” it said. “However, we still expect to deliver a result broadly in line with market expectations.”
Capacity in France has been slashed 35% this winter due to the weakness of Middle Eastern and North African destinations, but capacity in Northern Europe has been increased and the German airline will offer 17% more seats.
The Groups retailer merger with The Co-operative Group will be completed on October 1, when it was announced today that Co-op Group chief executive Peter Marks will join Cook as non-executive director.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
