Thomas Cook Group Plc has indicated that the synergies achieved through the merger of MyTravel Group plc and Thomas Cook AG would surpass the €140 million expected at the time of merger. (8/31/2007)
“We are increasingly confident that the synergies achieved will exceed the €140 million (Ł95 million) predicted in the prospectus for the merger,” said the newly formed company, which is owned by German firm Karstadt Quelle.
It is thought that as many as 2,800 jobs could be lost as a result of Thomas Cook’s cost-cutting plans. Meanwhile the company has said that it expects its full-year results to be in line with expectations, despite a pick-up in UK holiday bookings being weaker than anticipated this summer.
The company is ready to utilise its “incredibly strong” balance sheet to expand further through acquisition, according to chief executive Manny Fontenla-Novoa.
“We’re in great shape to take part in any further industry consolidation and are reviewing acquisition opportunities. We’ll be reviewing the marketplace taking stock of opportunities because consolidation has changed the landscape,” Fontenla-Novoa told reporters. The company, which sells around six million holidays a year, was looking at a range of acquisitions in Germany, Russia, China and India as well as cash returns to shareholders.
“We will evaluate the market, look at acquisitions going into new markets and look at things like special dividend and share buybacks,” reportedly said Fontenla-Novoa. “We haven’t discounted any of them (Germany, Russia, China, India acquisitions). We are further advanced in our evaluations of those opportunities,” he said, adding that the travel operator had plenty of acquisition firepower and that the recent slump in global share prices was making deals cheaper.
Thomas Cook expects its Northern Europe and Airlines Germany segments to exceed its expectations for the full year, while the recovery in the UK in summer 2007 has not been as strong as it had expected.
Customers are paying about €60 million of additional Air Passenger Duty, which has acted as a brake on prices. In a statement, the company said that in the UK, it reduced capacity year on year for summer 07 by five percent and cumulative bookings are currently tracking in line with this reduced capacity. Meanwhile, average selling prices are one percent up year on year.
Thomas Cook on track to hit annual forecasts