Peterborough’s Thomas Cook ponders airline sale to help profits take-off

Marco Green
February 10, 2019

On Summer 2019 trends, the company said: "Group Tour Operator bookings are consistent with the capacity reductions we have made across our markets to closely manage our risk capacity throughout the year".

In the space of a few hours on Thursday, the two companies both put out separate pieces of news illustrating the challenging conditions they face. He told Thomas Cook's annual general meeting that the review was likely to take several months.

That led the company to cut its profit forecast twice in two months in the second half of previous year.

COPYRIGHT VIOLATION WARNING: "Thomas Cook Group (TCG) Stock Price Down 10.5%" was originally posted by Modern Readers and is the sole property of of Modern Readers. All options are on the table, meaning a sale, partial or otherwise, is a possibility.

Announcing the airline review as part of the Q1 results, CEO Peter Fankhauser said: "We recognise that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business".

Morgan Stanley downgraded shares of Thomas Cook Group (LON:TCG) to an equal weight rating in a research note released on Wednesday, January 30th.

The oldest travel company in the world stumbled badly past year when a heatwave in northern Europe deterred holiday makers from booking lucrative last minute deals, leading to two major profit warnings and talk of a need to raise funds. The Company's principal commercial properties include a resort with a 50-room hotel, restaurant/banquet facilities, spa, marina, and tennis courts under the Grove Isle name; a 50% interest in a restaurant, marina, and office/retail mall facility under the MontyÂ's name; and a 5,000 square foot corporate office building.

Fankhauser added, "As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun".

Sky reported this morning that CEO of the group, Peter Fankhauser, said that "bookings for summer 2019 reflect consumer uncertainty, particularly in the United Kingdom". This weakness can be traced back to the day after the 2016 Brexit referendum. It made earnings before financing costs and tax of £129m past year, although it reported a loss in the last three months of 2018. The company has market cap of 538.30 million GBP. It therefore seems likely that we'll see some form of consolidation over the coming months.

A full-scale merger with Thomas Cook seems unlikely at this stage, especially given competition concerns, but if tour operators continue to struggle, all bets will be off.

Other reports by Click Lancashire

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