Thomas Cook looks to transform after posting loss

Thomas Cook unveiled its ‘Business Transformation’ strategy this morning after reporting a GBP590 million loss for the year.

The travel company said it would aim to become more effective, address costs and create a “profitable growth strategy” in its new plan, which has already seen cost savings of GBP103 million in the last 17 weeks to GBP788m. In its yearly results the group saw its UK revenue drop 4% year-on-year but said summer trading had ended strong and winter was ahead of committed capacity.

The company has already cut back on aircraft, hotels and shops to help cut back costs and has also reduced its brochure production by 20%.

Publicity around its loans in November 2011, increased input prices and the economy were to blame for its underlying profit drop from GBP19.5m to GBP800,000 in the UK. However the lates market and poor weather in the UK is said to have boosted its summer sales , while its controlled distribution moved up to 86.3% (from 73.8% in 2011) following its merger with Co-op.

Harriet Green, group chief executive of Thomas Cook Group said it is now reviewing its entire customer proposition including channels, content and brands.

“The Group has embarked upon a transformation which will shape its future strategy and we anticipate making good progress during the current year,” she said.

“The year ahead is the initial stage in this recovery and as we embark upon our first year of Business Transformation, we are optimistic about the future and look forward to updating you on our full plans and additional financial benefits in the spring of 2013.”

She added half of its customers now go on an “independent of flexible” holiday and carried more than 23 million customers during 2012. 

By Amanda Greenwood, 28 November 2012, Wednesday 11:01 AM