Markets
Thomas Cook shares rise despite huge losses
Matthew Jeynes, 08 February 2012
Struggling travel operator Thomas Cook saw its losses more than double for the quarter ending 31 December 2011.
The firm put the £91 million loss, compared to a £37 million loss for the same period in 2010, down to unrest in the Middle East and the Eurozone crisis.
However, the loss met analysts’ expectations and UK holiday bookings remained ‘broadly stable’ for 2011/2012, with only a 1 per cent decrease in 2012 UK summer bookings.
Chief executive Sam Weihagen commented, ‘I have been encouraged by how our bookings have developed, particularly in the UK where our market share for both the winter and summer seasons remains broadly stable.
‘As expected, the first quarter has been adversely impacted by the uncertain economic environment across Europe, input cost inflation and the ongoing disruption in Middle East and North Africa (MENA).’
News of the positive bookings meant that, despite the huge loss, shares in Thomas Cook moved slightly higher today, currently up 3.85 per cent at 13.5p at 11.15am.
Thomas Cook came close to collapsing in November 2011 when it was forced to turn to the bank for help meeting its debts.
A strategic review is under way and the firm is in the process of restructuring its UK business, which it claims will deliver a £35 million benefit in the current financial year.
The firm is selling off 200 shops and 500 hotels to reduce its debts and has now launched a formal sale process to offload its 77.1 per cent stake in Thomas Cook India.
Weihagen explained, ‘We continue to work hard on restructuring the UK business and a full strategic review of the group is progressing well.
‘As part of this review, the board has agreed that the group will look to sell its majority stake in its publicly quoted Indian subsidiary.
‘This is in addition to the previously announced non-core asset disposal programme where we have made good progress.’
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