Thomas Cook soars after strategy update

Shares in travel agent Thomas Cook Group rose sharply on Wednesday after investors reacted very positively to the company´s strategy update.

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.

Advertisement - Article continues below

Progress was achieved in embedding improved working capital management practices, which contributed to an approximately £150m improvement in average working capital.

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.




Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular


House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020