City praises Thomas Cook CEO’s ‘aggressive start’
Thomas Cook’s new group chief executive Harriet Green appears to have done enough to satisfy the City that she is capable of rescuing the beleaguered tour operation since she took to the helm four months ago.
Although the group announced a further loss of £590m in the financial year to the end of September, analysts welcomed Green’s ‘suitably aggressive start’ after she revealed strong current trading and outlined a further £100m of cost cuts (see earlier story).
Nomura said investors should be reassured by the three elements of the ‘Business Transformation’ that Green revealed today, which included the additional cost savings, management changes and improvements to product and distribution channels.
It said winter trading was encouraging, especially as prices are up 5% year on year and sales are ahead of the significant capacity cuts.
"Overall, an encouraging start for the new CEO," added Matt Smith, managing director of analysts Morgan Stanley. "For those looking for self help stories in 2013, Thomas Cook should be on the radar here."
However, Smith suggested that Thomas Cook would still need to raise more equity, but went on, "if management can continue to restructure the cost base, and capacity in the market remains tight, the shares still have significant upside potential."
A third analyst, Investec, said: "With net debt down to more manageable levels (it was reduced 12% year on year), and a supportive banking syndicate, we think Thomas Cook now has the platform and management to deliver the required cost and business changes to thrive."
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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