Thomas Cook Group: Interim Management Statement: August 2013

01-Aug-2013

Delivering a stronger balance sheet

• Completed £1.6 billion capital refinancing with extended maturity (£431 million equity raising, £691 million syndicated bank facility due 2017 and Euro 525 million bond due 2020)
• Net debt more than halved from £1,099 million as at 30 June 2012 to £452 million as at 30 June 2013
• Credit rating upgraded

Delivering improved financial results

• Q3 underlying EBIT on a like for like basis improved to a profit of £1 million, an increase of £46 million compared with the same period last year
• Nine months ended 30 June underlying EBIT on a like for like basis improved by £104 million to £(197) million compared with the same period last year

Delivering stronger margins

• Q3 underlying gross margin on a like for like basis improved by 110 basis points to 19.8% compared with the same period last year
• Nine months ended 30 June underlying gross margin on a like for like basis improved by 110 basis points to 20.3% compared with the same period last year
• UK underlying EBIT margin on a last 12 months ("LTM") basis improved by 60 basis points to 1.7% (H1 2013: 1.1%)

Delivering more cost out and profit improvement benefits

• In Q3 we delivered an additional £31 million of cost out and profit improvement benefits taking the cumulative total to £138 million, representing significant progress and on track to meet our FY13 target of £170 million
• We have increased the total cost out and profit improvement target for FY15 from £390 million to £400 million, reflecting a further £10 million of benefits that have been identified as being deliverable from existing initiatives reflecting risk weighting changes

Delivering more operational cash flow

• Cash conversion ratio at 58%, on a last 12 months basis

Delivering our web strategy

• Web penetration rate of 35% on a last 12 months basis
• www.thomascook.com is the most visible holiday website on Google UK, attracting 59 per cent of all generic holiday searches made via laptops and desktops. It is also the second most visible website for generic holiday searches made via tablets and smartphones, accounting for 68 per cent and just below travelsupermarket.com on 69 per cent (Greenlight report dated May 2013)

Delivering new products

• Concept hotel customer bookings for the Summer 2013 season are up by 38%, which is encouraging progress against our FY13 aim to increase the number of concept hotel passengers by 25% from approximately 450,000 in FY12

Continued positive trading

• Approximately 85% of planned capacity is now sold for the Summer 2013 season
• Disciplined management of committed capacity to demand has led to 9% less committed capacity "left to sell" in the "lates" market compared with last year
• Recent political and social unrest in Egypt and Turkey is not currently having a significant impact on the Group

Harriet Green, Group Chief Executive, said:

"We have continued to make significant progress transforming Thomas Cook. The success of our recent £1.6 billion capital refinancing has enabled yet more focus on the transformation, which continues apace. Since the announcement of our half year results eleven weeks ago, we have again delivered improved operating results, stronger margins, further cost out benefits, improved cash conversion and a number of exciting new web and other product developments. However, this is just the start. We see huge potential in Thomas Cook and its realisation remains our overriding priority. We look forward to delivering much more for all our stakeholders."

Refer to full documentation in attachments box, located at the top left, below the headline.