30th Jul 2015 07:54
LONDON (Alliance News) - Thomas Cook PLC Thursday reported a narrowed pretax loss in the third quarter of its financial year as it booked lower costs and charges, but revenue fell and it warned that earnings before interest and tax for the full year will be hit due to the recent events in Tunisia and Greece.
The FTSE 250-listed travel operator posted a GBP44 million pretax loss in the three months to June 30, narrower than the GBP81 million loss it made in the same period the year before, although revenue fell to GBP1.95 billion from GBP2.22 billion.
Thomas Cook said that this was the twelfth consecutive quarter of improved profitability for the company, even though revenue was hit by a later booking profile and softer market demand, as costs associated with restructuring, legal disputes and finance-related charges reduced by GBP46 million to GBP37 million from GBP83 million.
Thomas Cook added that summer holiday bookings for the year are in line with expectations, with 78% already sold, but said that the recent events in Tunisia and Greece are expected to hit earnings before interest and tax for the full year by around GBP25 million, as it had to cancel almost its entire programme to Tunisia and customer demand decreased for holidays to Greece.
Foreign exchange translation is also expected to hit full-year Ebit by GBP39 million, following further depreciation of the euro and Swedish krona against the pound, but Thomas Cook said it continues to anticipate growth in the full year on a constant currency basis.
"We've delivered a good performance in the third quarter, executing on our strategy and improving our underlying operating profit and cash flow in spite of weaker market conditions. Customer demand for our differentiated product continues to grow, our focus on quality is achieving positive results, and our digital progress is encouraging," Chief Executive Peter Fankhauser said in a statement.
"While the impact of Tunisia and Greece will reduce our fourth quarter and full year profits, and in spite of foreign exchange headwinds, I have every confidence that our progress will continue, supported by the ongoing execution of our profitable growth strategy," he added.
Shares in Thomas Cook were trading down 0.9% at 125.30 pence Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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