James Moore: Follow different routes with these fellow travellers

Investment View: The damage was from the customer's description of having a bad experience

We in the media just love a good scrap and a good scandal. Sadly, this often means hard-working, well-meaning organisations are shoved aside in favour of people with big mouths.

One of those organisations is the Local Authority Pension Fund Forum (LAPF), which is frequently on the right side of debates about investment and generally has interesting things to say.

Now it has come up with a report arguing that shareholders might like to pay more attention to how companies engage employees and ensure their commitment, as opposed to exclusively focusing on financial rewards to motivate them.

Is that just, well, akin to saying wouldn't it be nice if people were just nicer to people? Good idea, but no chance of happening?

Well, hang on. According to the LAPF, and there's science behind its thinking, employees care about purpose and are drawn to working with people they connect to, and are fulfilled by achievement and progress.

They are also heavily influenced by the context in which they work: whether they feel valued and fairly treated. Of course money matters, but these things matter too.

In a nutshell, the LAPF says companies which look after their staff will do better because their employees will respond by working harder, and smarter. Makes sense if you think about it. Not that Britain's macho managers think about that sort of thing all that often. Or even think much at all sometimes.

That leads us to TUI Travel, which managed to get right up one member of staff's nose, so much that they unleashed a volley of abusive e-mails at a customer of its Thomson brand who'd had a bit of a nightmare on one of its breaks.

This made it onto the BBC's Watchdog programme and then the Daily Mail. Oh dear.

Actually, it's pretty hard to excuse what the now ex-employee did even if TUI were a horrible employer (and I should stress I'm not saying that it is).

But publicity like this is very bad for a holiday firm, not so much as a result of the abusive e-mails. They were unpleasant but probably a one off. No, the damage was from the customer's description of having a bad experience on their trip.

It's the sort of thing that might make customers think twice and look again at TUI's financially troubled rival, Thomas Cook. TUI has benefited greatly from the latter's travails and it's been showing in the results (the finals are due on Tuesday). Jeffries, the broker, yesterday said it expected TUI to hit the top of its forecast range for earnings with a strong "late" booking market. It hopes for a rise in sales targets despite the economic backdrop being less than encouraging and the egg on face incident with the unhappy customer.

I last looked at TUI in May and said buy at 177.8p. Since then the shares have shot up and have been some of this column's best performers. They trade on 11.4 times forecast earnings for the year to 30 September, assuming the company hits those forecasts when it reports on Tuesday, and 10.3 times 2013 forecasts. They offer a decent, prospective yield of 4.4 per cent rising to 4.8 per cent.

I'd view them as offering fair value right now and after a stunning run, I'd be inclined to take some profits.

As for Thomas Cook, let's get the bad part out of the way first. Its loss for the year (after tax) of £590m unveiled on Wednesday looks horrible and was £71m worse than in 2011. It includes writedowns of £369m and one-off restructuring costs of £81m. But even at the operating level (one-off nasties not included), profits are down across the board.

But – and here's where it gets interesting – while bookings are down the company has also reduced capacity. Those holidays it is offering are selling well and fetching better prices than before. Net debt was also reduced by £100m.

I said avoid at 19p. The shares are much higher and I'm now inclined to take a punt on Thomas Cook, because it does seem to be through the worst. It's a speculative bet, and things could get nasty again, but on only six times next year's forecast earnings (there's no dividend and won't be one for a while) the shares may reward risk takers if the turnaround continues. It's a speculative buy.

Finally, a rather different travel company. Hogg Robinson was once an independent financial adviser, believe it or not. These days it looks after business travellers. The problem it has suffered from is that, with costs under pressure and confidence thin, they're staying at home and using the phone.

Yesterday's results showed a negative in nearly every key categoty except net debt, which increased, and the dividend, which was held. Profits? Down 7 per cent to £17.3m pre tax.

It should still meet full-year expectations, and has made some notable client wins. Its market is very tough. But I'm inclined to hold.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Details of the self-cleaning coating were published last night in the journal Science
Approved Food sell products past their sell-by dates at discounted prices
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Arts and Entertainment
The beat is on: Alfred Doda, Gjevat Kelmendi and Orli Shuka in ‘Hyena’
filmReview: Hyena takes corruption and sleaziness to a truly epic level
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable