Thomas Cook flies high as turnaround plan delivers first profit in three years
Thursday 28 November 2013
Shares of Thomas Cook jumped 11 per cent in early trading after the travel operator returned to a profit for the first time in three years driven by its impressive turnaround plan.
Chief executive officer Harriet Green unveiled more plans for her cost-cutting agenda in the hope of improving the business even further, and said that she aims to save £880 million over the next five years.
She said: “It wasn’t a company operating sa one, but as a loose federation of states, so we’ve had to pull it together and work as one.”
When she joined the company 16 months ago it was on the brink of collapse, with unsuitable debts and a business that had too many High Street stores with little web integration.
Today, operating profits hit £13 million, up from its £170 million loss last year. Pre-tax profits, which include exceptional items, were £158.1 million, up from a £336.8 million loss a year earlier. Sales at the world’s oldest travel agent were up 1.3 per cent to £9.3 billion.
Some of the initiatives Green introduced included selling off several brands and shutting dozens of High Street sites, bringing in £60 million.
A new phase of improvement will focus on boosting profits through increasing margins, offering more holidays in “concept” hotels run by the company, and cutting costs through centralised procurement.
The company also hopes to draw more people to its website to place orders and saw online sales up to 36 per cent from 34 per cent last year and has a target of half of all sales through the website by 2015.
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