Thomas Cook ditches dividend payments

Thomas Cook, the troubled travel company, has scrapped dividend payments to help to shore up its balance sheet after a year that saw its chief executive quit and a sharp fall in its profits and share price.

The tour operator, which has been badly hit by dire trading in the UK and the unrest in the Middle East and Africa, has also moved to reduce its debt burden by selling four assets for £40m and a series of cost-cutting measures in the UK.

Thomas Cook said it has "decided not to declare any further dividend whilst the group rebuilds the balance sheet", though the City had been expecting the grim news on the payout for shareholders.

The group's net debt stood at £1.1bn, as of 31 March, though it said it should be below £900m by the year end on 30 September.

To cut its costs, Thomas Cook is reducing its fleet of 41 aircraft by six and exiting 24 loss-making retail stores at the end of their leases. The group has also sold three hotels and the property of its retail travel business in the Netherlands to raise £40m.

It is seeking to generate up to £200m from asset disposals. Nick Batram, an analyst at Peel Hunt, said: "Management clearly recognises that restoring confidence in the group's financial position is a priority."

Shares in Thomas Cook have lost 79.4 per cent of their value in the past 12 months. Manny Fontenla-Novoa, the group's chief executive since 2007, quit in August after three profit warnings in 2011.

The City is now pencilling in operating profit of between £310m and £320m this year, compared with £391m in 2009-10. On recent trading, the tour operator described its results for July and August as "steady", but said September had been a "more challenging month", particularly for its French business.

Thomas Cook's cumulative UK bookings for this summer were flat and were boosted by a 4 per cent rise in its average selling prices. But it said that reservations for its winter programme are currently down by 7 per cent, which is 2 per cent lower than planned capacity.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'