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Business News

Sunnier days ahead after Thomas Cook makes £350m vow

Thomas Cook has vowed to deliver a £350m turnaround in its profit performance over the next three years by further slashing costs, closing more stores and focusing on growing online sales.

The tour operator also said yesterday it plans to raise as much as £150m from disposing of undisclosed non-core brands, and grow its revenues by focusing more on city breaks, winter holidays in the sun and its "concept hotels", such as Sunwing and Sentido.

Harriet Green, who took the helm in July, has wasted no time in slashing the bloated cost base left behind from the calamitous tenure of former chief executive Manny Fontenla-Novoa. Thomas Cook nearly collapsed in late 2011 under its previous £1bn-plus debt mountain. But Ms Green's action has seen the group's debts slashed, trading improve and its shares recover hugely from a lowly 14.3p in July.

Thomas Cook yesterday also unveiled a further £50m of cost savings to bring the benefit to its bottom line of £350m by the end of 2015, in addition to the £60m already delivered. This helped to drive its shares up by 13.75p to 100.75p.

Last week the 172-year-old company said it planned to axe a further 2,500 jobs, or 16 per cent of its UK workforce, and 195 high street shops to leave it with 874. It has taken a beating from better-performing rival Tui Travel, which owns Thomson Holidays, over recent years but Ms Green said: "We are going to put this great business back on top of the travel industry world."

Online currently accounts for 34 per cent of Thomas Cook's sales but it aims to grow this to more than 50 per cent by 2015.