Reporting disappointing results in a challenging year, Thomas Cook Group plc reported a pretax loss for its year ending September 30, 2011 of £398 million compared to a £42 million profit in 2010. Europe's second largest travel firm, Cook said revenues increased 10 percent and promised shareholders a turnaround in its corporate performance.
Cook reported good performances in Central and Northern Europe and other units which was offset by a fall in UK profits and the impact of disruption in the Middle East. Underlying profits were reduced 16 percent to £304 million. Cook said its cash flow improved by £50m to £18m despite the fall in profits.
Last month Cook renegotiated its bank loans after a slump in business, sparking widespread fears over the firms financial health. Cook also suffered from a decline in share price, but recovered after renegotiation of a bank loan.
Implementation of its UK turnaround plan is underway, Cook said, and is expected to deliver £110m annual improvement in profitability. Five hotels in Spain were sold, Cook said. Cook reported its net debt at L891 million. Cook also said it will close 200 outlets. Cook said its UK business was too complex and lacked focus.
Sam Weihagen, group chief executive, said, “This has been a very challenging year for the Group, despite which we still delivered an underlying operating profit (revenue) of over £300m. We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance. We continue to take action to substantially strengthen the balance sheet and the Board is undertaking a full strategic review. I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value."
"Customers have been very supportive in recent weeks and are continuing to book with Thomas Cook. Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well. For over 170 years Thomas Cook has provided customers with fantastic holiday experiences and we will continue to do so," Welhagen said.