Shares in travel agent Thomas Cook Group rose sharply on Wednesday after investors reacted very positively to the companys strategy update.
The firm reported that its business transformation was gaining momentum with a further £50m of cost-out actions having been identified, bringing total profit improvement actions so far to £350m with more to come, it said.
Progress was achieved in embedding improved working capital management practices, which contributed to an approximately £150m improvement in average working capital.
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The group said that a thorough UK restructuring was underway to re-shape the organisation to meet customer need with a target to deliver UK EBIT (earnings before interest and tax) margins in excess of 5.0% by fiscal year 2015.
It also said that its non-core disposal programme was underway with the opportunity to realise gross proceeds of £100-£150m.
New growth strategy unveiledThe group published a new growth strategy, which was focused on delivering "trusted, personalised holiday experiences delivered through a high-tech, high-touch approach," it said.
Fiscal year 2015 targets included new product revenue exceeding £500m and an increase in group web penetration to by more than 50%.
A cost out/profit improvement target of £350m was additionally outlined.
Harriet Green, the Group Chief Executive Officer of Thomas Cook, said: "Our business transformation plans are ahead of schedule and already delivering substantially improved performance, which resulted in our recent return to the FTSE 250.
"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, stabilising the business has been our priority through addressing our cost and cash challenges, and strengthening the leadership team to create a more effective, aligned organisation focused on rigorous execution," he added.
Thomas Cook's share price was up 14.94% to 100p at 11:23 on Wednesday.
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