Thomas Cook yesterday revealed an unwelcome Olympics legacy: a £17m hole in its accounts after a disastrous attempt to cash in on London 2012.
The troubled travel firm blamed the loss on "marketing and licensing costs" for package deals that offered guaranteed tickets for the Games.
Thomas Cook was "official provider of short breaks" for the Olympics, and had expected its packages to sell strongly. But sales proved sluggish, partly because London hoteliers demanded high rates that in turn obliged Thomas Cook to pitch its package prices high. Barely two weeks before the opening ceremony, Thomas Cook was forced to halve some prices in order to shift unsold capacity.
It made a "trading profit" of £9.6m on the Olympics, but this was wiped out by the £26.8m costs of marketing and licensing agreed with the organisers. Thomas Cook said those agreements had "become onerous during the year".
The news of its Olympian over-optimism came as the new chief executive, Harriet Green, revealed its full-year results that showed, despite a healthy operating profit, the company lost £590m once exceptional items were taken into account.
Ms Green warned of further store closures after 149 closures on the high street last year. She said: "My commitment to shareholders now is that last year's results represent a trough from which we can only improve." Putting her money where her mouth is, she today spent £115,000 buying half a million shares in Thomas Cook at 23p.
The group's revenues tumbled by 3 per cent to £9.5bn and its UK business saw sales fall by 2 per cent over its crucial summer season.
Shares rose by 1.1p, or 4.5 per cent, to 25.1p.
While winter bookings are up by 1 per cent in the UK and average selling prices are higher, reservations are down in all its other European markets.
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