Thomas Cook reports robust UK trading as losses narrow

Thomas Cook has also introduced new aircraft
Thomas Cook has also introduced new aircraft

Thomas Cook has reported robust trading in its UK business as it announced an improvement in underlying EBIT and net debt.

The travel company said it has seen a significant increase in winter and summer bookings with the latter up 6% against 1% lower average selling prices. This was helped by an expanded winter sun programme to the Caribbean, Cuba and Cape Verde.

Summer bookings are up 5% following a move to free up more of its airline capacity to dynamic packaging and seat-only business, as well as new routes to New York and Miami.

Its first quarter results ending 31 December 2014 showed underlying EBIT at a GBP53 million loss, an improvement on £56m year-on-year, while its net debt was marginally reduced from £1.26bn from £1.28bn.

Overall 85% of its winter product is sold while 41% of its summer is sold, 3% higher than last year.

“Our performance in the quarter demonstrates the strong progress we continue to make in transforming Thomas Cook.  We are particularly pleased with the performance of our UK business, which is now achieving its highest underlying EBIT margin since 2009, while at a group level we have nearly halved our first quarter operating loss,” said chief executive Peter Fankhauser. “Although it’s early days, our strategy for profitable growth through new products and winter sun is delivering results.”

The group said it continues to make good progress on its product offering and digital strategies. Its UK business and German airline operation both saw an increase in revenue while new product revenue grew by £44m in the quarter driven mainly by its exclusive offering and dynamic packages.

Fankhauser added: “Our strategy remains to generate sustainable profitable growth by providing differentiated and exclusive holidays while driving efficiencies in production and distribution, underpinned by digital excellence.  I am confident that our focus on rigorous implementation will continue to drive significant improvements in the group’s performance.”

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