Thomas Cook has posted an upbeat quarterly trading statement, saying it is confident of meeting full-year expectations. It also reported a smaller-than-expected operating loss for the first quarter.
The group, Europe’s second-biggest travel firm, said it had gained by taking capacity out of the market to avoid having to sell cut-price holidays in the lates market. Its ability to switch its destination mix to non-Euro destinations including Turkey and Egypt as Sterling weakened contributed to its bullish trading.“We remain well placed to manage our business through challenging trading conditions,” said chief executive Manny Fontenla-Novoa.
“We have an asset-light and flexible business model which continues to enable us to adapt our plans, particularly capacity and destination mix for changing demand,” he added.
The company made an operating loss of £27.4 million in the three months to 31 December 2008, down from £57.3 million a year earlier.
Thomas Cook said summer 2009 trading in Britain had been encouraging and it had 10 percent less holidays left to sell compared to a year ago.
The market reacted warmly to the figures and shares rose 3 percent in morning trading.
The stockbroker Teachers said: “With concerns about weakening Northern European economies, we did see a risk that trading here and in Germany, where we are yet to get industry consolidation could be the group’s undoing this year. However, we are encouraged that the group still describes Northern European trading as robust and has not seen fit to further cut capacity in this market, despite a very strong prior year.”
However the group admitted that it was experiencing a shift towards later booking across key markets.
“We have seen a shift towards later booking in all key markets. However, departed load factors have been at last year’s levels or above,” said Mr. Fontenla-Novoa.
“The UK is performing strongly. Bookings for the winter season are down broadly in line with capacity and, whilst we have seen a later booking trend, departed load factors are ahead of the prior year.”
For the summer, it said the current position looked “robust”. “Cumulative bookings are tracking in line with capacity reductions of 11%. However bookings have been stronger over the last four weeks and are down only 6%,” he added.
“We have now sold 43% of our capacity, in line with the prior year, and have 10% less left to sell than last year overall and up to 15% less left to sell in the off peak months. Average selling prices are up 9%.”
Thomas Cook also confirmed its acquisition of a majority stake in Gold Medal is expected to be completed in March, although subject to European Commission approval. It also acquired Med Hotels from Lastminute.com during the quarter, which it intends to combine with Hotels4U, which it acquired in February 2008.