Thomas Cook announces further GBP91m loss

Thomas Cook lost a further £91m from operations in the first quarter to December 31, despite a 3% rise in revenue following the acquisition of the Co-operative, its new venture in Russia and increased activity in Northern Europe.

It blamed the increased loss, which compared with a deficit of £37m in the same quarter the previous year, on tougher trading conditions and rising fuel costs. In particular, the West and East Europe segment reported significantly increased losses, in part due to ongoing disruption in the Middle East and North Africa.

In its interim management statement released to the Stock Exchange this morning, the company said it remained focused on implementing its UK turnaround strategy and it is on track to deliver the planned £35m benefit in the current financial year, which will "help to offset the headwinds faced from a weaker consumer environment".

"We have taken action to adjust capacities where appropriate and, for both the winter and summer seasons, in many markets, we have less left to sell than for the comparable period," it said.

Group chief executive Sam Weihagen added: "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 MENA.

 "We continue to work hard on restructuring the UK business and a full strategic review of the Group is progressing well."

As part of the ongoing review to reduce debt, Thomas Cook will sell its Indian subsidiary, it announced today. "This is in addition to the previously announced non-core asset disposal programme where we have made good progress," added Weihagen.

Overall bookings for Cook’s UK business are 1% down for the summer, although sales through its specialists and independent businesses are up 18%. Volumes in its bed banks Hotels4U and Medhotels are well up on last year, Neilson is benefiting from a better ski season and Gold Medal is recovering under its new management, it said.

Differentiated product bookings are up 7% and Cook claimed it was on track to reach its target of 25% of differentiated product bookings for mainstream for summer 2012.

Mainstream bookings are down 9% but the company had already cut capacity by 11%. It said improvements to its yield management systems, together with more integrated pricing across its distribution channels, had resulted in less discounting and a 4% increase in the average selling price.

Winter bookings remain subdued, however, with the UK programme only 76% sold – roughly in line with this time last year. Following cuts to its long-haul capacity, the programme is 93% sold and Cook has 51% fewer holidays to shift than a year ago and the average selling price is higher.

The company added: "The trends which we have seen in the first quarter are expected to continue for the rest of the first half, but summer trading is more encouraging."

By Linsey McNeill