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Thomas Cook Group – third quarter results 2017

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Third Quarter Results for the three months ended 30 June 2017 / Customer focus driving strong top-line growth

The comments below are based on like-for-like comparisons unless otherwise stated, as Management believes this provides a better explanation of performance
Good performance in Q3, despite the competitive environment
·   Group revenue up 14% with strong growth across all segments of the business
·   Higher customer satisfaction with NPS up 7 points year-on-year
·   Gross profit up £47 million, though margin down due to stronger competition to Spain
·   Underlying EBIT up £10 million, supported by Condor recovery
·   Net debt improved by £115 million, reflecting timing benefit from strong Summer bookings
Strong demand for Summer 2017; positive momentum continues into Winter
·   Overall Group bookings for Summer 2017 up 11% with pricing up 1%
·   Significant growth to Greece (up 22%), Bulgaria (up 19%), Cyprus (up 14%) and long-haul destinations
·   Turkey recovering well, as customers seek high-quality and value destinations
·   Winter 2017/18 around 30% sold, with bookings ahead in all markets
Full year underlying operating profit expected to be in line with market forecasts
Peter Fankhauser, Chief Executive of Thomas Cook commented:
“Our increased focus on the customer is reflected in a good performance for the third quarter. Strong demand for our holidays across the Group combined with an improved performance in our German airline to deliver a £10-million increase in profit versus the same period last year. This improved performance means Condor remains on track to return to profitability for the full year.
“So far, we are taking one and a half million more customers on holiday this summer than we did three years ago, showing the growth in demand for our modern package and flight offer. We continue to innovate to broaden our appeal with the launch of a ‘Choose Your Room’ option in 300 of our core hotels for Summer 2018.
“An 11-per-cent increase in bookings for this summer reflects good demand across all destinations. The pick-up in demand for Turkey we reported earlier in the year has continued, as customers are attracted to the quality and value on offer.
“As we go into the peak summer season, our holiday offering is in great shape. We have opened 11 new own-brand hotels for this summer, including a second Casa Cook, in Kos, offering affordable chic on the beach. We have also rolled out our 24-hour Satisfaction Promise to 2,000 hotels, giving 80 per cent of customers in our core sun & beach hotels an added level of reassurance.  These initiatives have helped to deliver a seven-point increase in customer satisfaction year-on-year.
“As we said in May, we are experiencing pressure on margins to Spain in what is a competitive environment, though this is being mitigated by our focus on our own-brand and core hotel offering and supported by strong overall demand for our summer holidays. As a result, we continue to expect our full year underlying operating result to be in line with current market expectations.”

For the rest of the results, click here.

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