Thomas Cook has stated that it will not meet next year’s profit target because it does not expect the economy to recover sufficiently from tough trading conditions.
The £480 million group operating profit target for 2010, set at the time of the merger with MyTravel, was “no longer realistic”, the company said in trading update on results for the nine months to the end of June.
The company posted a pretax loss of £286.4 million for the nine months to June 30, wider than the loss of £236.7 million a year earlier, mainly due to £107.3 million costs related to the 2007 merger of MyTravel and Thomas Cook, as well as costs for other acquisitions and restructuring costs. Cancellations and repatriations due to swine flu cost it £12.6 million.
Revenue increased 10.7 percent to £5.84 billion for the nine months period. Its net loss only widened slightly, to £175.6 million, from £174 million, as it booked a tax gain of £110.8 million compared with a gain of £62.7 million a year earlier. The company is able to claim back tax because of recent losses in the UK and Germany.
Bookings for winter 2009/10 are down 13 percent in the UK and 27 percent in continental Europe, with a predicted reduction in capacity of 6 percent and 7 percent respectively.
However, Manny Fontenla-Novoa, chief executive, said that he was “not overly worried at this stage”.
“The ski market is only 5 percent down in the UK, and the first month of winter departures is in good shape,” he said. “The load factor in the UK is only three percent down year-on-year. We are confident people will book – they are just leaving it later to do so.”