Thomas Cook bets its turnaround on technology
New boss Harriett Green says "all roads ultimately lead to technology"
By CFOWorld staff | CFO UK | Published 11:22, 02 August 12
Thomas Cook’s new boss is wagering the rebirth of the travel company on the strength of its technology as she outlined her plan to turn around the business over the next nine months.
After more than a year of poor performance, new chief executive Harriet Green on Thursday revealed an underlying operating loss of £26.5 million in the three months ended June.
The company recorded a profit of £20.1 million in the same period last year despite a lift in foreign bookings from Britons exasperated with rainy weather at home.
Green, who joined the 171-year-old company from electronic parts distributor Premier Farrell in July, told reporters on Thursday she would be able to "bring a fresh pair of eyes" to existing industry problems.
"I don't think moving from one industry (to another) is so much of a challenge ... There are many things that are actually very similar and in my view of business, all roads ultimately lead to technology," she said.
Thomas Cook has been hit hard by tough trading conditions, particularly in Britain where its core customer base of families with young children is suffering in the economic downturn. It has also been affected by unrest in popular destinations such as Egypt, Tunisia and Morocco.
In May it reported half-year pre-tax loss of £328.3 million and completed the sale and leaseback of 19 of its aircraft as it struggled to find cash.
Thomas Cook said foreign holiday bookings had picked up in recent weeks after subdued demand in April and May, as the sodden European summer drove rain-weary Britons, Germans and Russians to seek the sun in Greece and Tunisia.
UK bookings as of 29 July were flat versus the same time last year, while bookings in central Europe were 1 percent higher, boosted by demand from Germany.
In comparison, bookings in west Europe were down 9 percent compared with the same time last year, as trading, particularly in France, stayed tough.
Net debt at June 30 was £1.01 billion, versus £902.5 million at the same time last year. It has striven to pay down its debt through selling its Spanish hotel chain Hotels Y Clubs De Vacaciones and expects to complete the £87 million sale of its Indian unit by 22 August.
At 0943 GMT shares in Thomas Cook, which have fallen more than 70 percent over the past year, were down 1.5 percent to 16.32 pence, valuing the company at around £148 million.
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