28th Jan 2010 10:44
Thomas Cook Group plc
(the "Company")
Annual Financial Report and Annual General Meeting
Further to the release of the Company's Final Results announcement on 30 November 2009, the Company announces that it has today published its Annual Financial Report 2009 ("Annual Financial Report 2009").
Two copies of each of the Annual Financial Report 2009, Notice of Annual General Meeting ("AGM") 2010 and Form of Proxy have been submitted today to the UK Listing Authority and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone: +44 (0)20 7066 1000
The AGM is scheduled to be held at 1.30pm on Thursday 25 March 2010 at The Lincoln Centre, 18 Lincoln's Inn Fields, London WC2A 3ED.
The Annual Financial Report 2009 and the Notice of AGM 2010 can also be viewed at or downloaded from the Company's corporate website at
www.thomascookgroup.com/ara2009.
Pursuant to paragraph 6.1.2 of the FSA Disclosure and Transparency Rules, two draft copies of the proposed amendments to the Company's Articles of Association pending approval at the 2010 AGM, have also been submitted to the UK Listing Authority. In addition, a full set of Articles highlighting the amendments is available for inspection until the close of the AGM at the Company's registered office at 6th Floor South, Brettenham House, Lancaster Place, London WC2E 7EN during business hours.
The Company's Final Results announcement of 30 November 2009 contained a management report as well as audited financial statements which were prepared in accordance with the applicable accounting standards. The financial information set out in the Company's Final Results announcement of 30 November 2009 does not constitute the Company's statutory accounts for the year ended 30 September 2009. Statutory accounts for 2009 will be delivered to the registrar of companies in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2009.
Included in this announcement is additional information, for the purposes of compliance with the Disclosure and Transparency Rules, which includes a responsibility statement from the Directors at Appendix A and information regarding the Company's principal risks and uncertainties at Appendix B, all as extracted from the Annual Financial Report 2009. This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Financial Report 2009. There are no related party transactions requiring disclosure.
For further information please contact:
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Investors |
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Thomas Cook Group plc Derek Woodward, Group Company Secretary Jill Sherratt, Investor Relations Director |
+44 (0) 20 7557 6415 +44 (0) 20 7557 6412 |
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Press |
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Brunswick Group LLP Fiona Antcliffe Nina Coad |
+ 44 (0) 20 7404 5959 |
Appendix A
Statement of Directors' responsibilities
The Annual Financial Report 2009 contains the following statements regarding responsibility for the Annual Report, the Directors' Remuneration Report and the financial statements:
"The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and the Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; and
• state that the financial statements comply with IFRSs as adopted by the European Union.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and the Group, and for ensuring that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company's website, and legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
Derek Woodward
Group Company Secretary"
Appendix B
Principal Risks and Uncertainties
Thomas Cook Group plc, like all businesses, faces risks and uncertainties as we conduct our operations and execute our strategy. We place great importance on internal control and risk management, and the system and framework that the Board has put in place is described on page 49 of the Corporate Governance Report in the Annual Financial Report 2009.
The table below lists the principal risks and uncertainties that may affect the Group and also highlights the mitigating actions that are being taken. The content in the table, however, is not intended to be an exhaustive list of all the risks and uncertainties which may arise.
Operational and strategic risks
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Risk |
Impact |
Mitigation |
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Downturn in the economies of our source markets leading to a reduction in demand for our products and services |
Pressure on volumes and margins |
• Significant capacity reductions through our actions to maintain margins • Flexible and asset-light business model: - Less than 10% of our hotel capacity is committed at the beginning of the summer season - Around 90% of our UK tour operator flying requirements are undertaken by our own fleet, allowing considerable further flexibility to cut capacity without affecting our own airline - Changes in capacity can be accommodated late into the booking season • Utilising our buying power to manage accommodation costs across the Group. New central team headed by senior executive • Tight cost discipline throughout the organisation with defined contingency plans to cut costs further if necessary. Cost synergies identified between our various airlines • Efficiency improvements, such as a new automated yield management system |
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Fall in demand for traditional package tours and competition from internet distributors and low-cost airlines |
Reduction of revenue and pressure on margins |
• Strategy to establish Thomas Cook as a leading provider of independent travel and financial services • Further acquisitions in the independent sector, eg. Airtrack, Med Hotels and Gold Medal • Improvement of our online capabilities across the Group and targeting significant long-term growth in the European online travel agency market • Shift to higher margin all inclusive resorts • Continued focus on expanding into new emerging markets • Proven resilience vs. low-cost airlines through much better access to beds in destination • Focus on medium haul destinations not economically viable for low-cost airlines |
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Customers' exposure to the falling value of sterling |
Reduction in bookings to traditional resorts in the Eurozone as prices appear expensive |
• Strategy to increase medium haul non-Eurozone destinations, while reducing our short haul and long haul programmes • Flexible and asset-light business model • Utilising our buying power to manage accommodation costs across the Group. New central team headed by senior executive • Increase in higher margin, all inclusive holidays, which give cost certainty to customers |
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Environmental and social concerns |
Damage to the Company's brand and reputation |
• Focus on environmental and social concerns. Development and approval of a corporate responsibility strategy by the Health, Safety & Environmental Committee • Full sustainability programme as detailed in the Sustainability Report |
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A major incident caused by a significant lapse in health and safety procedures |
Significant impact on reputation as a trusted brand would lead to reduction in bookings |
• Health and safety management embedded in each business with central co-ordinating function • Group health and safety strategy in place, developed and approved by the Health, Safety & Environmental Committee |
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Loss of, or difficulty in replacing, senior talent |
Inability to drive strategic initiatives, discontinuity in management and leadership |
• Regular succession and talent reviews within each business segment • Identification of key roles in line with business continuity plans • Succession planning established for senior roles - periodic review by the Board • Competitive package and career development opportunities |
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IT services |
Reduction of revenue due to failure to meet business requirements |
• Executive engagement for all new developments and change programmes • Senior level monitoring of performance with status reports to the Group Executive Board and Audit Committee • Performance monitored against service level agreements |
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Business continuity |
Business disruption and loss of profits |
• Significant progress made to strengthen the business continuity plans across the Group - progress is monitored by the Audit Committee |
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Performance failure by outsourced partners |
Business disruption and loss of profits |
• Business continuity and service level agreements in place |
Financial risks
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Risk |
Impact |
Mitigation |
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Volatility of fuel prices |
Costs incurred may not be recovered from customers Brochure prices do not reflect actual cost of travel |
• Actively managed Board-approved hedging policy |
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Foreign currency and interest rate risks |
Costs incurred may not be recovered from customers Brochure prices do not reflect actual cost of holiday Interest cost uncertainties |
• Actively managed Board-approved hedging and treasury policies |
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Liquidity and counterparty credit risks |
Group is unable to meet its financial commitments as they fall due Loss of cash |
• Actively managed Board-approved treasury policy • €1.8bn credit facility put in place in May 2008. Plans in place to refinance during the current financial year. Considering mixed portfolio of longer term debt instruments to further strengthen the Group's financial position. • Focus on cash management throughout the organisation and regular review of counterparties |
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Tax risk |
Inability to utilise losses resulting in higher taxation charges |
• Compliance with Board-approved tax policy • Regular monitoring of forecasts and high risk areas |
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Requirement to increase defined benefit pension scheme contributions, which may be imposed by the trustees or the Pensions Regulator |
This may restrict investments in the businesses |
• Broadly diversified pension fund with limited exposure to single asset classes • Pension scheme assets and liabilities are closely monitored • Agreed timescales for funding any deficit
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Other risks that are continually monitored by management
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Risk |
Impact |
Mitigation |
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Breakdown in internal controls |
Inability to operate, loss of profit |
• System of internal control in place, which is continually monitored |
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Political, military, terrorist, security, natural catastrophe and health risks in source markets and key tourist destinations |
Reduction of revenue and loss of profit |
• Ongoing monitoring by management • Flexible and asset-light business model provides ability to switch to other markets and change capacity at short notice |
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Legal and regulatory risks, especially in respect of airline operating licences, insurance and financial services sectors, and legislative impacts Failure to comply with new regulations in relation to night flying and environmental emissions Money laundering legislation in relation to financial services |
Inability to obtain operating and/or route licences leading, ultimately, to cessation of operation |
• Active legal and regulatory management programme in place • Ongoing programme to review airline operations and safety processes |
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