In its first quarter results for the three months ended December 31, Cook reported an increase in group revenue of £14 million (or 1%) to £1,618 million, due to growth in sales of holidays to Spain, Greece and long haul-destinations, “together with new seat-only routes, mitigating the impact of reduced sales to Turkey and Egypt”.
Gross profit of £357 million was £4 million higher than last year, while gross margin of 22.1% represented an improvement of 10 basis points over the same period last year, “reflecting an increased focus on own-brand and selected partner hotels”.
The group’s underlying operating loss during the first quarter improved by £1 million to £49 million, a year-on-year improvement of 2%.
For the UK business bookings were up 1% overall with Greece, Cyprus and “other smaller European destinations” performing particularly well.
Average selling prices were up 2%, Cook said in a statement.
“However, a combination of hotel price inflation and increased air capacity has intensified competition for the Spanish islands,” it added.
“In this context, and consistent with our strategy, we have taken a deliberate decision to focus on higher margin, quality holidays, rather than chase volume growth.”
As a result, overall UK charter “risk bookings” were slightly behind last year’s levels, while pricing was up 9%.
Cook reported that online bookings were up more than 20% in the UK and 40% in Germany and that for the group, summer 2017 was 31% sold, with bookings 9% ahead of last year.
UK bookings had increased by 5% compared to last year, “reflecting strong growth in both charter risk package sales” (up 9%) and seat-only sales (up 9%), “partly offset by a reduction in lower margin non-risk packages”.
This growth is increasingly coming through Cook’s website, it said.
Peter Fankhauser, chief executive of Thomas Cook, said: "We have delivered a solid performance for the first three months in line with our expectations, against a backdrop of continued uncertainty.
"Our businesses in the UK and Northern Europe continued last summer’s strong performance into the first quarter, while our tour operating business in continental Europe also improved.
"In preparation for the summer season, we have expanded our holiday offering to Greece and a number of smaller destinations across Europe, and I’m pleased that this early action is paying off.”
Fankhauser said bookings to Greece were up by more than 40%, while demand for destinations such as Cyprus, Bulgaria, Portugal and Croatia was also strong.
“These positive trends are making up for continued weak demand for Turkey,” he said.
Fankhauser added that Cook remained cautious about the rest of the year, “given the uncertain political and economic outlook”.
“It’s still relatively early in the selling cycle for summer holidays, but based on current trading, and supported by further financial benefits from implementing our strategy, we expect our full year operating results to be in line with current market expectations," he concluded.
