Thomas Group reports operating loss; weaker revenue in Jun-2010 quarter
Thomas Cook Group PLC reported (11-Aug-2010) the following financial results for the three months ended Jun-2010:
- Revenue: GBP2,156.4 million, -9.0% year-on-year;
- Gross profit: GBP476.1 million, -8.7%;
- Operating expenses: GBP450.3 million, -4.6%;
- Operating profit (loss): (GBP64.3 million), compared with a GBP20.2 million profit in the previous corresponding period;
- Profit (loss) before tax: (GBP116.6 million), compared with a GBP2.9 million profit in p-c-p.
* Figures for 2009 period based on Restated Unaudited Results
The company stated the total financial impact from the Icelandic volcanic ash disruption is now estimated at GBP81.9 million – from an original estimate was GBP60-80 million – of which GBP28.8 million is lost margin. The company also stated the following regarding its airline business:
- Airlines Germany: "Summer bookings are up 4% year on year, ahead of capacity and aided by a rebound in demand for intercontinental flights. Yields, down 4% overall, reflect lower fuel prices partially offset by the higher proportion of long-haul flights. Booked load factor at 78% is 1% higher than last year";
- Hedging: The company has 99% of fuel hedged for summer 2010, with 82% of requirements hedged for winter 2010/11. [more]
Thomas Cook Group: "We always expected this year to be challenging given the uncertain economic environment and the impact of the weak sterling on our UK business. In anticipation, we cut winter capacity, chose not to increase overall summer capacity and have continued to address our cost base. These actions and our flexible business model have demonstrated our resilience in weathering the tough trading environment. As we enter the final quarter, it is apparent that trading in the UK business is softer than expected and, at current rates, the recent weakening of the euro will have an adverse impact on translation of our euro-based earnings. As a result, we now anticipate underlying operating profits for the full year (excluding the impact of the volcanic ash cloud) to be at the lower end of market expectations," Manny Fontenla-Novoa, CEO. Source: Company Statement, 11-Aug-2010.
Thomas Cook Group: "The airline synergies programme remains on track to deliver the GBP17 million incremental synergies in the current financial year. Accommodation savings are being achieved across the group and in the UK we are forecasting rate reductions of 5% to 7.5% for summer 10. We continue to target sustainable reductions in accommodation and in-destination service costs going forward and now have the appropriate organisation in place to achieve this," Company Statement, 11-Aug-2010.