Thomas Cook’s bookings take a hit in Germany
SHARES in Thomas Cook fell six per cent yesterday as the travel operator warned of a slowdown in late summer bookings by German holiday-makers.
The 173-year-old group said bookings in Germany, which accounted for a third of group sales, had slowed from late July and hurt margins in the fourth quarter as consumers worried about sanctions against Russia and the impact on their economy.
But the company was upbeat on forecasts for the year, saying that it expects earnings before interest and tax (Ebit) of between £315m and £335m in the year to the end of September, in line with analyst forecasts.
“The Germany market place is very sensitive,” chief executive Harriet Green said. “We’re very clear on our fourth quarter, which is why we’ve given the (earnings) range that we have. We’re encouraged to see Germans buying vacations for the winter.”
In the UK, Thomas Cook’s summer programme is 92 per cent sold, the same as last year, but average selling prices were four per cent lower because of more capacity in the market.
The group said it was encouraged by early UK winter bookings, with 29 per cent of capacity already sold and average selling prices higher than last year.
Thomas Cook was struggling with more than £1bn of debt and huge losses caused by the consumer downturn when Green took over as chief executive in 2012.
The former Premier Farnell boss put in place an ambitious turnaround plan that included £460m cost cuts by 2015 and a second phase of cost savings of around £400m by 2018.
Green said yesterday that its three-year plan was progressing well and that it was on track to raise its cost saving targets when it reported its full-year results in November.