Better bookings and acquisition plans
Thomas Cook reduced its seasonal losses in the first quarter of the new business year and is seeing better bookings for the forthcoming summer season. The company is still looking for acquisitions in Germany.
In the first quarter, ending December 31, 2009, Cook reduced its pre-tax loss by £30.5 million to £81.5 million thanks to lower costs for restructuring and financing. Turnover dropped 6% to £1.7 billion due to lower capacity.
But CEO Manny Fontenla-Novoa said bookings for both the winter and summer 2010 have improved substantially across major markets in recent weeks and he is confident of achieving this year’s financial targets. “The full year results are underpinned by our strong summer programme weighted towards higher margin, medium haul destinations. As a result of this and our cost reduction plans, we are confident that the Group will perform in line with board expectations,” he declared.
In Germany, Cook has a bookings fall of 7% for winter 2009/10 and a 3% decline for summer 2010. Its average selling prices in Germany are 9% lower for the winter and 3% lower for the summer. Despite the falling revenues, Fontenla-Novoa is not dissatisfied with the trend and margins are slightly higher thanks to lower contracting rates. Summer bookings in Continental Europe are only 2% lower than last year compared to an 8% drop in Britain and a 9% decline in Scandinavia.
Meanwhile, Thomas Cook remains interested in acquisitions in Germany, several newspapers reported. The company is now following a ‘Plan B’ for 2-3 smaller acquisitions, Fontenla-Novoa was quoted as saying. Cook is in takeover talks with one company and has started due diligence, he added. All the elements are there for investment in the fragmented German market. “It is a large market that needs consolidation, we have a strong business and we have a strong management team,” he said.
But larger potential takeover targets are resisting approaches. The owners of larger medium-sized operators such as Alltours, FTI or Schauinsland do not want to sell their companies, while Öger Tours owner Vural Öger has so far failed to reach agreement with potential investors.
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Wednesday, 08.09.2010
