Thomas Cook targets £350m profit boost by 2015
Travel group Thomas Cook has unveiled plans to increase its profits by £350 million over the coming years by cutting costs, focusing on web sales and closing high street stores.
The firm said last week that it would close 195 branches with the loss of about 2,500 jobs in a bid to restore its UK business to health.
About £60m was shaved off the group’s cost base last year, and chief executive Harriet Green insisted its turnaround plan was on track, with a further £50m in savings identified.
Green said: “We have exceeded our initial commitments and today announced a further £50m of ‘cost out’ actions, bringing the total profit improvement actions identified already to £350m, £290m of which is still to come.”
Thomas Cook is also seeking to raise between £100m and £150m by selling off “non-core” parts of the business, and today said it was yet to decide whether to press ahead with a fundraising exercise, following reports that it was mulling a £400m share issue.
Green said: “Having now established our profitable growth strategy, we will review our capital structure, taking into account the opportunity we have to improve cash generation of the group through our profit improvement programme, further working capital improvements and possible non-core asset disposals.
“When that review is complete we will decide on what action we should take, if any, including whether to raise new debt and/or equity capital and the amount and structure of any such capital raising.”