Thomas Cook reports sunny forecast for the summer as demand rises for holidays in Greece
Travel firm Thomas Cook has reported a rise in revenue in its half-year results, with a bright outlook for summer as demand for Greek holidays rises.
However the firm’s pre-tax loss widened for the six months to 31 March, with that pesky late Easter causing a few headaches, according to a.m..
The holiday operator reported pre-tax losses of £314m, up from £284m, pointing to costs arising from its bond refinancing in December.
Revenue though, rose three per cent to £2.9bn, thanks to customers’ penchant for winter holidays to Spain and long-haul destinations. That, along with a 36 per cent rise in sales from Greece helped to offset the 41 per cent drop in revenue from Turkey, which has faced political instability and terrorist attacks.
Thomas Cook is also making a growing digital push, with online bookings up 15 per cent in the UK and 25 per cent in Germany.
There are sunnier skies ahead too – Thomas Cook said it’s seeing strong demand for the summer holidays, particularly for destinations like Greece, Cyprus and Bulgaria. It said there was double digit growth in bookings
from Northern Europe and Continental Europe.
Shares edged down 0.32 per cent in morning trading to 93.70p.
Why it’s interesting
The late Easter has been a common trouble for firms, and Thomas Cook was no different, noting a £10m negative impact from the holiday falling in the second half of the year.
The firm has been making a push to develop its own-brand hotels and resorts, with 11 new hotel launches planned for this summer, including its first in Sicily. Thomas Cook said a further 11 openings were in the pipeline for the next 18 months.
Similarly, there were positives within its airlines business too. The company said bookings were “up significantly” for the summer, bolstered by 15 new destinations to its flight programme. Boss Peter Fankhauser said that despite strong competition, based on current trading, Thomas Cook expects underlying earnings before interest and tax to be in line with its current market expectations.
What the company said
Chief executive Peter Fankhauser, said:
The progress we’ve made on our strategy helped achieve a three per cent increase in revenues, with strong customer demand for our holidays despite the competitive environment.
Greece continues to be the standout destination for Summer 17 while customers are also seeking out smaller European destinations like Cyprus and Bulgaria, as well as travelling further afield. In contrast, following strong growth last year, bookings to the Spanish Islands have levelled off in a very competitive market.
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