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Business News

Outlook sunnier for Thomas Cook as Brits flee the rain

Thomas Cook, the tour operator, gave its long-suffering investors hope yesterday when it revealed it was boosted by a late rush of British people fleeing the wettest summer on record.

The company, which almost collapsed last year under the weight of its debt mountain, kept its profit guidance, and said bookings for late summer have been "good, with holidays to Turkey, Spain and Greece proving the most popular destinations for last-minute bookings".

Cumulative bookings at Thomas Cook's UK business fell by just 1 per cent after price rises nearly offset a fall in reservations for its summer programme.

Harriet Green, who joined as chief executive two months ago from the electronics business Premier Farnell, said: "My priority has been to ensure a renewed focus on delivering to our plans for the current financial year."

The City expects Thomas Cook to make operating profit of up to £154m this year, compared with £480m at its better-performing rival, Tui Travel.

Simon French, an analyst at Panmure Gordon, said: "We continue to believe there is little value in existing group equity and think that consensus expectations for 2013 financial year are too high given rising fuel costs and a turbulent economic backdrop in most source markets and some destinations."

Thomas Cook is expected to make a pre-tax profit of £17m this year, dragged down, in part, by the cost of servicing its debt burden of £1.4bn.

The tour operator posted a £25.4m loss for the quarter to the end of June.

Shares in Thomas Cook rose 9 per cent, or 1.5p, to 17.5p.