THOMAS Cook boss Harriet Green reported “rapid progress” in her turnaround plan for the travel firm today after cutting winter losses and making a £45 million disposal.
Cost savings at the 173-year-old company offset the negative impact of Egypt, where unrest has scared off potential visitors this winter, and allowed it to cut first-quarter losses by £10m.
Meanwhile the sale of Gold Medal, a distributor of scheduled flights, hotels and car hire, to a unit of the Emirates Group, brought the proceeds of recent disposals to £125m. It means the firm has reached its target for disposals more than a year early.
Green said: “Our first-quarter results, new product revenue growth, web integration, cost out and profit improvement programmes combined with an intense business focus and financial discipline, all underpinned by the Thomas Cook business system, give us confidence of achieving our targets and delivering even more value in the years to come.”
Green is half-way through a three-year plan to cut jobs, close branches and sell businesses after the eurozone debt crisis, high fuel costs and political turmoil in Egypt and Tunisia brought the world’s oldest travel firm to its knees in 2011.
She outlined plans for a further wave of cost reductions in November at the time of the group’s full-year results. It has already cut its network of travel agencies from more than 1,100 to fewer than 900, with the loss of some 2,500 posts.
Reporting a narrowing seasonal loss, the company said summer bookings were developing in line with its expectations. Bookings for summer holidays are watched closely as they generate the bulk of the firm’s earnings.
The winter is generally unprofitable for travel businesses, and Thomas Cook reported an underlying operating loss of £56m for the three months to the end of December, 15 per cent less than a year earlier.
Thomas Cook’s shares have staged a strong recovery since the market value of the group collapsed in the face of numerous profit warnings and the need to deal with lenders in 2011.
Shore Capital analyst Greg Johnson said: “It’s been a very good performer. The thing about these kind of stocks is they tend to need upgrades to drive the price.”