FRUSTRATED shareholders piled pressure on the bosses of struggling tour operator Thomas Cook yesterday following one of the most turbulent periods in the company’s 175-year history.
The UK’s second-biggest travel company, which was forced to turn to its banks for more help following dire trading last November, had earlier reported wider losses of £151.7 million for the three months to 31 December.
While a number of investors at the group’s annual meeting praised the board’s efforts to turn the ailing business around, some demanded to know how the group planned to restore its reputation after recent financial troubles sparked fear of collapse.
Chairman Frank Meysman and chief executive Sam Weihagen remained defiant, with the latter insisting “we are now fighting back”.
The losses at the tour operator were widely expected and it also reported a fall of just 1 per cent in cumulative bookings for summer holidays.
But some shareholders took the opportunity to raise concerns at the AGM in London. One asked when the company’s dividend would be restored and under what conditions.
Meysman said: “We will need to take our time to rebuild the company. It could be two or three years.”
The chairman said the group must restore the balance of profitability and indebtedness before restoring the dividend.
The AGM finished on a heated note as one shareholder attacked the group’s decision to pay former boss Manny Fontenla-Novoa a £1.2m severance package.
Independent non-executive director Peter Middleton, a former chief executive of Thomas Cook himself, said the company acted within the law and was in a “legally binding contract” with Fontenla-Novoa, which was backed by major shareholders.
He said: “2007 was a different world from the political, social and economic conditions we have now.”
The group, which has 1,300 shops, said it was progressing with its turnaround plan for the UK business, which includes focusing on fewer and better quality hotels and a drive for more online bookings.
The company plans to sell £200m of assets over the next 18 months as part of plans to take a chunk out of its debt mountain, which rose by 11 per cent to £891m in the year.
Numis analyst Wyn Ellis said: “Thomas Cook has performed more robustly than some might have feared in the UK.”
Nick Batram at Peel Hunt said the update “could have been worse” but was not great.
“The early summer performance in the UK will give some fodder to the bulls. Unfortunately, there are clearly significant trading challenges outside the UK,” he added.