Thomas Cook's losses narrow in first quarter

UK travel company Thomas Cook Group on Thursday posted operating losses for the first quarter but showed vast improvement over the past year.

The group reported an operating loss of £69.8m of the last three months of 2012, a 23% drop on the £91.1m loss in the previous year.

Overall loss before tax came to £127.9m, a 15% drop compared to the £151.7m reported for the same period a year ago.

However, total revenues fell 7.3% to £1.72bn during the period and gross profit was down 3.5% to £377m for the period.

The world's oldest travel firm said gross margin came to 21.9%, up 1.3 percentage points on the first quarter of 2011/2012.

The group, which has run for the past 172 years, has experienced a tough last two years with a slump in sales leading to a string of profit warnings. It has been forced to renegotiate bank loans and make disposals to cut debt.

Thomas Cook has started to see improvements since Harriet Green took over as Chief Executive Officer in May. A series of disposals to cut debt, including the sale of its Indian business and several Spanish hotels, have also helped recover business.

The firm reduced debt by £86m to £1.56bn over the past year and expects to slash costs by a further £60m in 2013.

The company said winter and summer bookings were "robust" and in line with expectations of improved capacity management results in higher sales prices and better margins.

It added a turnaround plan was on track to delivering sturdier results this year.

"We have seen stronger operating performances in our major markets - the UK, Germany and the Nordics," said Group Chief Executive Harriet Green.

"I am particularly pleased with the improved performance in the UK as the benefits of the turnaround plan are reflected in its operating results.

"Our business transformation is firmly on track. We have further strengthened our leadership team and the pace at which we are driving change gives me confidence that together we will achieve our near term objectives and much more."

Shares rose 3.85% to 74.50p at 09:23 Thursday.

RD