Thomas Cook bullish despite fall in UK margins
Thomas Cook saw its UK margins fall in 2017 after four consecutive years of growth, but the Group’s revenue was up 9% to £9 billion, due largely to the recovery of its German airline Condor and increased profits in Continental and Northern Europe.
The Group’s pre-tax profit for the full year was up £24 million to £330 million and it managed to slash a further £122 million from its net debt, reducing it to £40 million.
It said its UK margins edged down from 23.4% to 22.1% amid ‘challenging’ conditions, particularly tough competition in the Spanish holiday market.
Chief executive Peter Fankhauser described 2017 as a ‘milestone’ year.
"By delivering what we promised on strategy, we’ve inspired more customers to choose our holidays for their hard-earned weeks in the sun, while at the same time transforming the scale of the opportunity ahead for the Group," he said.
"We now see that the deliberate decision we made to put the customer back at the heart of our business is bearing fruit. Customers’ satisfaction with our holidays has increased strongly for a second consecutive year, growing in all of our main markets. I’m particularly pleased by the number of new customers we’ve won this year, showing us that we’re getting more people to look again at what we offer – and that more of our existing customers are recommending our holidays to family and friends."
Cook’s new alliance with Expedia will enable Thomas Cook to offer a greater choice of hotels at lower cost and complexity to the group, he said.
"Meanwhile, the partnership with LMEY strengthens our own-brand hotel portfolio and reinforces our focus on a more streamlined portfolio of hotels where we can give customers the very best experience." he added.
"I am also excited by the growth opportunities we have in our fledgling business in China, as well as in financial services with the launch of Thomas Cook Money. In a very short space of time, Anth Mooney and his team have developed a really innovative set of financial products that I believe will make customers think again about what we can offer – and help us reclaim our position as number one for holiday money.
"Looking to the year ahead, we can see real momentum in our Group Airline, and expect our Continental Europe and Northern Europe tour operator businesses to continue their good performance. While conditions are challenging in the UK, we have implemented a set of actions to improve performance. Overall, based on current trading, I believe that we are well-positioned to achieve a full year operating result in line with market expectations."
Winter trading for the Group is in line with last year, with 60% of the UK programme sold. UK bookings are up 1%.
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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