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29 Nov 2018

BY Gary Noakes

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Thomas Cook to take measures to stem UK losses

Thomas Cook agencies will be used to sell more of its financial products as part of measures to offset a massive £163 million after tax group loss in 2018.

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Cook details plan of action after hot UK summer push it into the red

The UK was blamed for the bulk of Thomas Cook Group’s difficulties in the year to September 30, with the operator saying the market was “particularly hard hit”.

 

A series of measures to remedy the situation will include the selling of Thomas Cook Money products in shops. A Cook spokesperson explained: “We want to ensure the shops are not just selling holidays but other products like insurance, foreign exchange and pre-paid travel cards.”

 

He added that Cook would have 200 own brand hotels next year and that these would be a focus: “The big thing is to ensure we send more people to our own brand hotels,” he said. He added there were no job losses planned.

 

Cook shares have plummeted in the last year from 120p in November 2017 to 35p when losses were announced. Cook’s losses last year came despite a £500 million rise in turnover to £9.6 billion.

 

They follow a profit of just £9 million for 2017. Investors are concerned that net debt levels have risen from £40 million last year to £389 million “due to delayed bookings”.

 

Tour operator profits were down £88 million due to discounts in the lates market, particularly during the UK’s hot summer. However, the airline grew profits by £35 million.

 

Group chief executive Peter Fankhauser said: “Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering.

 

“We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant.”

 

Cook said it wanted “to increase the number of customers who book directly” and said online sales now accounted for 48% of bookings across its 16 markets.

 

Looking ahead, Cook said winter UK bookings “are broadly flat, albeit at lower margins due to increased capacity in the wider market”. It said summer 2019 UK booking “are positive”.

 

 

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