Thomas Cook UK announce record profits
Thomas Cook UK and Ireland has announced record pre-tax profits of £83.3 million – just two weeks after axing 325 jobs.
The figure, which doesn’t include exceptionals, is a 63.3% increase on last year’s profit of £51 million.
Chief executive Manny Fontenla-Novoa also announced it has hit the “holy grail” target of a 5% margin. He claimed it was the first vertically integrated group to achieve such a margin.
He added current trading remained “very challenging.”
Fontenla-Novoa said: “2004/05 will go down in the history books as one of Thomas Cook UK and Ireland’s finest years.
“Not only did we make record profits to become the UK’s most profitable travel group but we also achieved a 5% margin which is considered the holy grail of tour operating.
“Last year we also took leadership in the industry for the service we deliver to customers and our internal staff morale was at its strongest ever.”
That morale may have been hit recently however as the group revealed 325 jobs will go following the creation of Holidays division. Consultations are currently taking place with staff with Thomas Cook hoping “as many as possible” will be retained in the group in different roles.
Fontenla-Novoa praised staff, saying the group’s progress was down to “their hard work”.
Commenting on the 5% margin, Fontenla-Novoa said: “Reaching this level is important for us and one that we’ll work hard to maintain.
“We’ve achieved this landmark result by reading the market well and established greater flexibility in our business model so that we can react more quickly to market conditions.”
He said that during the year, it has invested heavily in thomascook.com and spent £8 million refurbishing its shops and installing new technology.
Turning to current trading, Fontenla-Novoa said conditions remained “very challenging” but predicted it will meet its ambitious profit target for 2005/06. The target has not been disclosed.
“We are managing to maintain our position through having made sound decisions on capacity planning and yield management,” he said.
Sales to Turkey are being hit by fears over bird flu while Egypt, Greece, Cyprus are performing well. Spain is also “recovering its popularity”, he said.
Report by Steve Jones
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