Proactiveinvestors United Kingdom Thomas Cook Group https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Thomas Cook Group RSS feed en Sun, 26 May 2019 04:01:24 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - Statement re media speculation ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523151239_14085664/ Thu, 23 May 2019 15:12:39 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523151239_14085664/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523112010_14085306/ Thu, 23 May 2019 11:20:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523112010_14085306/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523110023_14085258/ Thu, 23 May 2019 11:00:23 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190523110023_14085258/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190521132257_14082160/ Tue, 21 May 2019 13:22:57 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190521132257_14082160/ <![CDATA[News - Thomas Cook reassures customers and suppliers about financial health after profit warning ]]> https://www.proactiveinvestors.co.uk/companies/news/220581/thomas-cook-reassures-customers-and-suppliers-about-financial-health-after-profit-warning-220581.html Thomas Cook Group PLC (LON:TCG) has been forced to reassure worried consumers and suppliers about its financial health after issuing a profit warning last week.

The tour operator told customers who contacted them over the weekend that the business was not in trouble and that all of its holidays were protected by UK holiday protection scheme, Atol.

The company also held talks with a range of suppliers to reassure them that it had plenty of resources to cover the summer holiday season.

READ: Thomas Cook shares plunge further as Citigroup cuts rating to 'sell' and slashes target price to 0p

“In the last few days we have had a number of discussions with our suppliers to explain the ample resources we have to continue to do business as well as our strengthening liquidity position,” a Thomas Cook spokesperson said.

Thomas Cook’s market value plummeted 40% on Friday when Citigroup told investors to sell the stock because the shares were worthless.

Citigroup said the company would likely need a debt for equity swap or substantial rights issue.

The broker comments came a day after Thomas Cook posted a record £1.5bn loss for the first half and warned that earnings for the rest of the year would be weaker due to Brexit uncertainty.

READ: Thomas Cook shares tumble as it posts wider first-half loss and warns of weaker second-half

Over the weekend, Thomas Cook revealed that it was in talks with a payment provider in the Nordic region to extend the length of time it holds onto customer payments before passing them onto the firm.

Thomas Cook declined to name the card supplier but said it was confident it would reach an “acceptable solution in the coming days”.

In last week's first-half results, Thomas Cook said it had agreed a £300mln bank facility to provide additional liquidity for the winter 2019/20 season, subject to the sale of its airline business. 

Citigroup said a highly-priced airline disposal could alleviate near-term pressures and free the way for an offer for the remainder of the business from a non-EU entity such as Chinese group Fosun, which has a 17% stake in Thomas Cook.

In morning trading, shares recovered slightly to rise 1.3% to 11.95p. 

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Mon, 20 May 2019 08:36:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220581/thomas-cook-reassures-customers-and-suppliers-about-financial-health-after-profit-warning-220581.html
<![CDATA[News - Thomas Cook shares plunge further as Citigroup cuts rating to 'sell' and slashes target price to 0p ]]> https://www.proactiveinvestors.co.uk/companies/news/220509/thomas-cook-shares-plunge-further-as-citigroup-cuts-rating-to--sell--and-slashes-target-price-to-0p-220509.html Thomas Cook Group PLC (LON:TCG) plunged further into the red as Citigroup downgraded its stance after the tour operator issued a fresh profit warning.

The company on Thursday reported a loss before tax of £1.5bn for first half ended March 31, compared to a loss of £303mln a year ago, on revenue of £3bn, down from £3.2bn last year.

READ: Thomas Cook becomes potential takeover target as market value plunges after fresh profit warning

It also warned that underlying earnings (EBIT) in the second half would be behind the same period last year due to higher fuel and hotel costs, Brexit uncertainty and competitive pressures.

Citi cut its rating on the stock to ‘sell’ from ‘neutral’ and its target price to 0p from 28p, saying the travel firm’s outlook was much weaker than expected.

Citi reduces earnings forecast

The stockbroker reduced its underlying 2019 earnings (EBIT) forecast to £163mln from £221mln. The estimate excludes the £1.1bn impairment Thomas Cook took in the first-half for the revaluation of the MyTravel business it merged with in 2007.

“Guidance that full-year net debt will increase by a similar amount as the 1H18/1H19 move (£361m) points to 2018 net debt of circa £750mln (Citi £740mln) and implies zero equity value,” Citi said.

Citi also fears that news of the £1.1bn writedown and the firm’s remarks about “material uncertainties” will unsettle consumers and drive further weakness in bookings, which are down 12% for summer holidays this year.

It added that further weakness in bonds and shares may cause Thomas Cook to look to tighten payment terms.

Thomas Cook has secured a £300mln bank facility to provide additional liquidity for the winter 2019/20 season, but it is subject to the sale of its airline business. 

'Material uncertainties' around airline business and bank facility

Citi sees material uncertainties around the group’s plans to see its airline business and the bank facility.

“We struggle to see the group receiving a high enough offer to prevent the deal being dilutive to earnings,” the investment bank said.

“We note that new £300mln credit facilities are not yet committed and ‘dependent on progress in executing the strategic review of the airline’.

“Although management commented that this does not mean they have to sell the airline to access the facility, the lenders appear to have room to walk away.”

Citi sees debt for equity swap or substantial rights issue 

Citi said debt markets are “clearly highlighting” the risk of financial distress. It sees a debt for equity swap or substantial rights issue as probable outcomes.

The investment bank said a highly priced airline disposal could alleviate near-term pressures and free the way for an offer for the remainder of the business from a non-EU entity such as Chinese group Fosun, which has a 17% stake in Thomas Cook.

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Fri, 17 May 2019 10:29:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220509/thomas-cook-shares-plunge-further-as-citigroup-cuts-rating-to--sell--and-slashes-target-price-to-0p-220509.html
<![CDATA[News - Thomas Cook becomes potential takeover target as market value plunges after fresh profit warning ]]> https://www.proactiveinvestors.co.uk/companies/news/220423/thomas-cook-becomes-potential-takeover-target-as-market-value-plunges-after-fresh-profit-warning-220423.html Thomas Cook Group PLC (LON:TCG) could become a potential takeover target as its market value has slumped by more than 87% over the past year following a series of profit warnings.  

The oldest travel company in the world already has plans to sell its airline business and is considering the disposal of its foreign exchange arm, Thomas Cook Money. But the company still needs to address the recent underperformance of its core tour operator business, which on Thursday saw first-half revenues drop 4% on a reported basis and 91% on a like-for-like basis.

READ: Thomas Cook shares tumble as it posts wider first-half loss and warns of weaker second-half

Thomas Cook said there was “little doubt” that Brexit uncertainty had caused customers to delay their summer holiday plans as it posted a loss before tax of £1.5bn for the six months to March 31, up from £303mln a year ago.

The latest results sent the group’s shares down 17% to 18p, brushing the lowest level since 2012.  A year ago, the shares were trading at around 146p a piece, but three profit warnings in less than a year have dragged on the stock.

A prolonged summer heatwave in Northern Europe last year has not helped matters but it is one of many problems facing the business.

A weaker pound following the 2016 Brexit vote, growing competition from smaller online rivals like On the Beach Group PLC (LON:OTB) and Airbnb, overcapacity in the European airline sector are other issues dampening consumer demand.

On top of that, discounting and higher fuel and hotel costs have dented profits.

Could Chinese shareholder swoop in with a takeover bid?

“The question now is whether c17% shareholder Fosun simply decides to come in and take it over – once the airline is sold a major obstacle to the Chinese group making a bid will have been removed,” said Neil Wilson, chief market analyst at Markets.com.

“An approach may well be in the offing.”

Wilson said the biggest worry for Thomas Cook is that net debt has ballooned to £1.25bn.

The company has secured a £300mln bank facility to provide additional liquidity for the winter 2019/20 season but this is subject to the sale of its airline business. 

Thomas Cook said it has received “multiple bids” for all or part of the airline unit, which consists of Germany’s Condor, as well as British, Scandinavian and Spanish operations.

Lufthansa has said it would make an offer for Condor with an option to buy Thomas Cook’s remaining airlines.

Selling Condor 'no silver bullet'

“The loan buys it time to flog the airline without it becoming a distressed purchase. But selling Condor is no silver bullet,” Wilson said.

“For sure Thomas Cook needs to see a good summer season to try and offset a miserable winter, but struggling under substantial debts and with structural headwinds combining with cyclical weaknesses in some markets, it’s still a very bumpy journey ahead.”  

The group has sold 57% of its summer holidays for this year and tour operator bookings are down 12%. The poor summer trading was largely a result of weaker demand in the UK, Germany and Sweden.

Thomas Cook now expects underlying earnings (EBIT) in the second half to be behind the same period a year ago.

Emergency fundraise speculation 'likely to ramp up'

AJ Bell investment director Russ Mould said: “Times are tough for travel operators at the moment and the problem for Thomas Cook is that its ability to navigate a difficult market is hindered by its unwieldy borrowings. Little wonder the company is in a tailspin and descending to new record lows today.”

Mould said speculation over an emergency fundraise, which mounted at the end of 2018, is only likely to ramp up despite the company’s plan to sell its airline operations.

Alternatively, he questioned whether Fosun might step in with an offer to buy the group.

Senior market analyst Fiona Cincotta at cityindex also thinks a takeover bid could be in the offing.

"The pressure on Thomas Cook to execute a major asset sale has been turned up a few notches with this dismal result,” she said.

Adding: “About the only real positive news in today's update is that Thomas Cook has received multiple bids for its airline business. But with losses mounting and a new £300m financing package contingent on a successful sale, management is looking more and more like a forced seller -- and that can't be good for maximising bid prices."

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Thu, 16 May 2019 12:48:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220423/thomas-cook-becomes-potential-takeover-target-as-market-value-plunges-after-fresh-profit-warning-220423.html
<![CDATA[News - Thomas Cook shares tumble as it posts wider first-half loss and warns of weaker second-half ]]> https://www.proactiveinvestors.co.uk/companies/news/220390/thomas-cook-shares-tumble-as-it-posts-wider-first-half-loss-and-warns-of-weaker-second-half-220390.html Thomas Cook Group PLC (LON:TCG) shraes plunged after it posted a wider loss for the first half and warned that earnings for the rest of the year would be weaker as Brexit uncertainty dampened demand.

The tour operator reported a loss before tax of £1.5bn for the six months to March 31, compared to a loss of £303mln a year ago.

READ: Thomas Cook shares fly higher after Lufthansa says it will make offer for Condor

The larger loss largely reflected a £1.1bn impairment related to the revaluation of the MyTravel business, which it merged with in 2007, following poor trading.

Revenue dropped to £3.0bn from £3.2bn last year with the tour operator business down 4% to £2.3bn and the airline division down 8% to £1.2bn.

On a like-for-like basis, revenue edged up 4%, with the tour operator unit down 91% and the airline arm up 98%.

"The first six months of this year have been characterised by an uncertain consumer environment across all our markets,” said chief executive Peter Fankhauser.

“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”

Winter bookings rise, summer bookings fall 

Bookings for the group’s 2018/19 winter programme were up 7%, driven by demand for trips to Turkey and Egypt.

However, average selling prices were down 9% due to more people taking short- and medium-haul holidays as opposed to higher margin long-haul trips.

For summer 2019, the programme is 57% sold while bookings are down 12% compared to a year ago but pricing is up 2%.

Thomas Cook continued to see strong demand for cheaper holidays to Turkey, Egypt and Tunisia for this summer but bookings to the Spanish Islands are lower following its decision to reduce its tour operator capacity there after being hit by tough competition.

In the UK, Brexit uncertainty led to softer demand for summer holidays across the industry. Continental Europe bookings are lower due to weaker demand in Germany. 

Northern Europe bookings are also running behind capacity cuts due to tough market conditions in Sweden. 

Weaker trading resulted in free cash outflows of £839mln, compared to £718mln a year ago. Group net debt at the end of the period was £1.2bn, up from £886mln last year.

The company has secured a £300mln bank facility to provide additional liquidity for the winter 2019/20 season, subject to the sale of its airline business. 

'Multiple bids' received for airline business

In February, the firm announced plans to offload its airline business following a strategic review.

Fankhauser said on Thursday that the group has received “multiple bids”, including for the whole or parts of the airline business.

Lufthansa has said it would make an offer for the travel firm’s German airline Condor with an option to buy Thomas Cook’s remaining airlines.

“As we assess these bids, we will consider all options to enhance value to shareholders and intensify our strategic focus,” Fankhauser said.

The company has closed 21 UK retail stores in response to the growing shift online. As part of its efforts to cut costs, it is also reviewing its foreign exchange division, Thomas Cook Money.

Fankhauser said “a range of further cost efficiencies” are planned for the second half to allow for investments.

Second half earnings expected to fall 

"As we look ahead to the remainder of the year, it's clear that, notwithstanding our early decision to mitigate our exposure in the 'lates' market by reducing capacity, the continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins,” he said.

“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year."

Thomas Cook now expects underlying earnings (EBIT) in the second half to be behind the same period a year ago.

In morning trading, shares dropped 15% to 19.5p. 

"Thomas Cook’s latest trading statement makes for grim reading," said Laith Khalaf, senior analyst at Hargreaves Lansdown.

"The travel operator was already reeling from last year’s warm summer, only to be hit by a downturn in consumer demand in Sweden and Germany."

The analyst added: "The measures Thomas Cook is taking to get itself back on track look sensible, but with so many challenging factors outside its control, it’s still a hostage to fortune.’"

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Thu, 16 May 2019 07:49:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220390/thomas-cook-shares-tumble-as-it-posts-wider-first-half-loss-and-warns-of-weaker-second-half-220390.html
<![CDATA[RNS press release - Results for the six months ended 31 March 2019 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190516070005_14075845/ Thu, 16 May 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190516070005_14075845/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190515170154_14075537/ Wed, 15 May 2019 17:01:54 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190515170154_14075537/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190508145234_14066906/ Wed, 08 May 2019 14:52:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190508145234_14066906/ <![CDATA[News - Thomas Cook shares fly higher after Lufthansa says it will make offer for Condor ]]> https://www.proactiveinvestors.co.uk/companies/news/219794/thomas-cook-shares-fly-higher-after-lufthansa-says-it-will-make-offer-for-condor-219794.html Thomas Cook Group PLC (LON:TCG) shares soared after Lufthansa said it would make an offer for the travel firm’s German airline Condor.

Lufthansa chief executive Carsten Sphor said on Tuesday that the German airline would make a bid for Condor with an option to buy Thomas Cook’s remaining airlines, according to Reuters.

READ: Thomas Cook confirms talks with lenders amid reports it is looking to secure £400mln

However, Sphor said it would unlikely a single buyer could take over all of Thomas Cook’s airlines due to antitrust regulations.  

He declined to comment on the offer price for Condor.

Shares in Thomas Cook leapt 10.5% to 23.9p around noon.

Thomas Cook put its airlines business, which also includes British, Scandinavian and Spanish operations, up for sale in February after issuing profit warnings last year.

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Tue, 07 May 2019 12:24:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219794/thomas-cook-shares-fly-higher-after-lufthansa-says-it-will-make-offer-for-condor-219794.html
<![CDATA[News - Thomas Cook confirms talks with lenders amid reports it is looking to secure £400mln ]]> https://www.proactiveinvestors.co.uk/companies/news/219682/thomas-cook-confirms-talks-with-lenders-amid-reports-it-is-looking-to-secure-400mln-219682.html Struggling travel firm Thomas Cook Group PLC (LON:TCG) has confirmed talks are underway with its lenders amid reports it is looking to secure £400mln to help shore up its balance sheet.

A Sky News article on Friday afternoon suggested the company, which recently put itself up for sale, is in “advanced negotiations” with its syndicate of banks over the potential funding.

READ: Thomas Cook shines as firm considers possible sale

City editor Mark Kleinman speculated that a statement confirming Thomas Cook has secured the new borrowing headroom could come alongside its half-year results later this month.

Responding to the article, Thomas Cook said it had taken the “proactive step” of entering into discussions with its lenders now ahead of the winter months, when cash reserves are at their lowest.

“We have taken a number of prudent early steps to de-risk our business by taking out capacity in a challenging consumer environment,” said chief executive Peter Frankhauser.

“We have also taken the proactive step to approach our financing partners and are engaged in constructive discussions to ensure we have the flexibility and resources to continue investing behind our plans over the long-term.”

Difficult time for travel groups

It has been a turbulent few years for Thomas Cook, and the travel sector in general. Intense competition has kept prices low while costs have increased, forcing several firms out of business.

Brexit and more general economic uncertainty have also dampened demand for airfares.

Thomas Cook has responded by shutting 21 high street stores and putting its airline business up for sale, although reports have suggested some parties are interested in taking out the whole company given its historically-low equity value of £350mln.

Bosses have also moved to cut the number of flights, taking capacity out of the market.

Thomas Cook shares were down 1% to 21.9p on Friday afternoon. This time last year they were changing hands for almost 150p.

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Fri, 03 May 2019 15:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219682/thomas-cook-confirms-talks-with-lenders-amid-reports-it-is-looking-to-secure-400mln-219682.html
<![CDATA[RNS press release - Statement re bank financing ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190503151650_14063056/ Fri, 03 May 2019 15:16:50 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190503151650_14063056/ <![CDATA[RNS press release - Results of General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190429132259_14055727/ Mon, 29 Apr 2019 13:22:59 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190429132259_14055727/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190429125606_14055703/ Mon, 29 Apr 2019 12:56:06 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190429125606_14055703/ <![CDATA[News - Thomas Cook: From Loughborough railways to potential unravelling ]]> https://www.proactiveinvestors.co.uk/companies/news/218976/thomas-cook-from-loughborough-railways-to-potential-unravelling-218976.html Thomas Cook Group PLC (LON:TCG) is facing the possibility of being split up after reports emerged on Tuesday that it was considering a sale of the business.

While the company has come a long way from running train rides between Leicester and Loughborough in 1841, it now finds itself under pressure from changes in consumer behaviour, a Brexit-induced slump in sterling and encroachment from budget rivals.

READ: Thomas Cook shares shine as firm considers possible sale of business after tough year

The latter point was borne out in a Morgan Stanley survey in January which indicated that Thomas Cook, alongside second-most popular tour operator TUI AG (LON:TUI) were losing market share to new entrants such as On The Beach PLC (LON:OTB) and Dart Group PLC (LON:DTG) owned Jet2.

A sale would also mark an end to what has been a rather tumultuous period for the travel group, which in 2018 issued two profit warnings amid a double whammy of extreme weather with the ‘Beast from the East’ cold snap earlier in the year followed by the UK’s summer heatwave. It has also seen its share price tumble over 85% in the last 12 months.

READ: Thomas Cook and TUI losing market share to new entrants, Morgan Stanley survey suggests

Aside from these ‘acts of God’, Thomas Cook’s predicament is also viewed by some as a case of a travel firm trying to play catch-up with shifts in the sector when it has already missed the bus (or flight if you prefer).

An analyst at a City brokerage firm, who asked not to be named, told Proactive that while some of Thomas Cook’s joint ventures (JV) in recent years had made moves in the right direction, notably a JV with online travel firm Expedia Group Inc (NASDAQ:EXPE) for an online booking platform in 2018, the transition in line with sector changes “hasn’t been quick enough”.

They added that Thomas Cook hadn’t adapted to new content ownership strategies such as managing a chain of own-brand hotels or low-cost distribution models such as online booking, both of which would have helped profitability as the former would increase margins while the latter would cut costs.

Meanwhile, the company’s airline business has been facing downward pressure on fares as budget carriers like easyJet PLC (LON:EZJ) and Ryanair (LON:RYA) have adopted aggressive pricing strategies to edge out competitors.

In short, the company is now caught in a seesaw of lower takings from air fares as a result of competitive pricing and higher costs from hotels due to the plunge in sterling’s value, squeezing what was already a low-margin business.

The combination of snow and a scorching summer may, effectively, have exacerbated these pressures to create a perfect storm.

Victorian legacy

The current situation is a far cry from the company’s long pedigree, in which it boasts the accolade of being the oldest tour operator in Britain.

The firm’s legacy includes the pioneering of circular notes, a precursor to the traveller’s cheque, by its founder as well as being the first UK travel agent to advertise pleasure trips by air in 1919, although given that it is now potentially on the cusp of selling its airline, this centenary may be bittersweet.

The company was also nationalised in 1948, returning to private ownership in 1972 and surviving a recession that caused the collapse of several of its peers including Clarkson and Horizon.

Fast-forward to the present and the Thomas Cook empire now includes around 22,000 staff in 16 countries, coalescing around its airline, tour operations, and hotels.

With so many branches, and now the possibility of segments being sold off, it could be argued that the company should’ve stuck to its travel agent roots and is now suffering the consequences of overexpansion.

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Tue, 23 Apr 2019 15:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218976/thomas-cook-from-loughborough-railways-to-potential-unravelling-218976.html
<![CDATA[News - Thomas Cook shares shine as firm considers possible sale of business after tough year ]]> https://www.proactiveinvestors.co.uk/companies/news/218924/thomas-cook-shares-shine-as-firm-considers-possible-sale-of-business-after-tough-year-218924.html Thomas Cook Group PLC (LON:TCG) shares leapt higher on Tuesday after reports suggested the holidays firm is considering a sale of its business as it struggles against tough competition and Brexit uncertainty.

Chinese group Fosun International, which is Thomas Cook’s largest shareholder with a 17% stake, is said to be among those interested in buying parts or the whole of the business, according to Sky News.

READ: Thomas Cook suggests possible sale of airline business as it posts wider quarterly loss

Private equity firms KKR and EQT are also understood to be interested in bidding. In afternoon trading, Thomas Cook shares were 18.3% higher at 28.98p 

The news comes after a tough year for Thomas Cook, during which it issued two profits warning and saw its market value fall 80%.

Last year, the company swung to a pre-tax loss of £163mln from a £9mln profit a year ago as demand weakened to increased competition and last year’s UK heatwave.

In February, the group said it had launched a strategic review of the airline business, suggesting this could lead to a possible disposal. 

At the time, German airline Lufthansa expressed an interest in buying the long-haul operations of Thomas Cook’s Germany airline division.

Adding to its woes, Thomas Cook warned in April that it might have been in breach of its own borrowing limits.

 -- Updates share price --

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Tue, 23 Apr 2019 07:28:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218924/thomas-cook-shares-shine-as-firm-considers-possible-sale-of-business-after-tough-year-218924.html
<![CDATA[RNS press release - Notice of GM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190412160010_14040016/ Fri, 12 Apr 2019 16:00:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190412160010_14040016/ <![CDATA[RNS press release - Notice of GM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190412090138_14039223/ Fri, 12 Apr 2019 09:01:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190412090138_14039223/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190409160309_14034831/ Tue, 09 Apr 2019 16:03:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190409160309_14034831/ <![CDATA[RNS press release - Analyst briefing on Hotels & Resorts business ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190326155137_14016605/ Tue, 26 Mar 2019 15:51:37 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190326155137_14016605/ <![CDATA[News - Thomas Cook shares drop as it announces review of money division as part of overhaul ]]> https://www.proactiveinvestors.co.uk/companies/news/217252/thomas-cook-shares-drop-as-it-announces-review-of-money-division-as-part-of-overhaul-217252.html Tue, 26 Mar 2019 14:23:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217252/thomas-cook-shares-drop-as-it-announces-review-of-money-division-as-part-of-overhaul-217252.html <![CDATA[RNS press release - Expanding presence in Russia with new JV ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190322130001_14012812/ Fri, 22 Mar 2019 13:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190322130001_14012812/ <![CDATA[News - Hundreds of jobs to be axed as Thomas Cook announces closure of 21 high street stores ]]> https://www.proactiveinvestors.co.uk/companies/news/217023/hundreds-of-jobs-to-be-axed-as-thomas-cook-announces-closure-of-21-high-street-stores-217023.html Thomas Cook Group PLC (LON:TCG) has confirmed plans to close another 21 of its high street stores and axe more than 300 jobs.

The travel agency, which has closed dozens of its sites over the past 18 months, said the move was as a result of changing shopping habits, with almost three-quarters of its UK bookings now coming from its website.

READ: UBS trims target for Thomas Cook

Among the 21 stores set to close are branches in Guildford, Kingston upon Thames and Bury.

Once the earmarked sites are shuttered, Thomas Cook will have 566 stores up and down the UK.

“Today's announcement reflects the wider challenges seen on the high street, with more and more customers choosing to book online,” said chief of tour operating Will Waggott.

“These measures will help us to drive greater efficiencies across Thomas Cook so that we relentlessly focus our resources in those areas that give us the greatest opportunity to make a difference to customers in our core holiday offering.”

Thomas Cook expects that the planned closures will make 102 customer-facing roles redundant, while it is also looking to get rid of another 218 in-store jobs after a review of its workforce.

A consultation process with the affected staff and their union representatives has begun, it added.

Thomas Cook shares were down 2.4% to 28.0p in mid-morning trading on Friday.

Full list of stores to close:

Aberdeen Langstane (Aberdeen), Accrington (Lancashire), Bury Haymarket (Lancashire), Chesham (Buckinghamshire), Colchester High St (Essex), Cumbernauld (North Lanarkshire), Glenrothes (Fife), Guildford (Surrey), Gosforth (Newcastle Upon Tyne), Kingston upon Thames (Surrey), Kirkintilloch Cowgate (Glasgow), Launceston (Cornwall), Llandudno (North Wales), Market Harborough (Leicestershire), North Shields (Tyne & Wear), Peterlee (County Durham), Shipley (West Yorkshire), Stevenage (Hertfordshire), Stratford-upon-Avon (Warwickshire), Sunderland Sainsburys (Tyne & Wear) and West Bromwich Sandwell Centre (West Midlands).

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Fri, 22 Mar 2019 09:54:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217023/hundreds-of-jobs-to-be-axed-as-thomas-cook-announces-closure-of-21-high-street-stores-217023.html
<![CDATA[RNS press release - Thomas Cook accelerates UK efficiency programme ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190322090001_14012299/ Fri, 22 Mar 2019 09:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190322090001_14012299/ <![CDATA[RNS press release - Director Announcement under LR 9.6.11 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190312165001_13999600/ Tue, 12 Mar 2019 16:50:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190312165001_13999600/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190308134001_13996007/ Fri, 08 Mar 2019 13:40:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190308134001_13996007/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190228113100_13985454/ Thu, 28 Feb 2019 11:31:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190228113100_13985454/ <![CDATA[RNS press release - New Appointment ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190228091504_13985078/ Thu, 28 Feb 2019 09:15:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190228091504_13985078/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190214113929_13969749/ Thu, 14 Feb 2019 11:39:29 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190214113929_13969749/ <![CDATA[News - UBS trims target for Thomas Cook as it stays conservative on value potential of airline disposal ]]> https://www.proactiveinvestors.co.uk/companies/news/214357/ubs-trims-target-for-thomas-cook-as-it-stays-conservative-on-value-potential-of-airline-disposal-214357.html UBS has trimmed its target price for Thomas Cook Group PLC (LON:TCG) to 32p from 34p as it gave a conservative assessment to the potential value of a disposal of the group’s airline business.

In a note, the investment bank said that it believed the airline’s equity value could be worth between £200mln-£600mln, a “more conservative” valuation that the market expectation of between £900mln-£1bn.

READ: Thomas Cook suggests possible sale of airline business as it posts wider quarterly loss

Analysts added that a possible drag on the equity of the airline could be the £364mln pension deficit from its German airline Condor.

Post-airline disposal, UBS said in order to see “a meaningful and sustainable upside” there would either need to be a disposal implying a 100% equity value of the airline at around £1bn, which they considered unlikely, or have investors be willing to give the company’s tour operator business credit for “100 [basis points of] margin improvement”.

“Both of these assumptions seem difficult to achieve considering the current market environment in the tour operator industry is challenging, with overcapacity in several of the markets.”
The bank also retained its ‘Neutral’ rating on the stock, adding that the target price cut reflected lower margins in the tour operator business.

READ: TUI AG no longer outshines Thomas Cook after shock profit warning

The downbeat assessment was in stark contrast to competitor TUI AG (LON:TUI), which was leading the FTSE 100 risers into late-morning, up 4.8% at 957p, after Bank of America Merrill Lynch resumed coverage of the firm at a ‘Buy’ rating, erasing some of the losses from last week after the stock plunged on news of a shock profit warning.

Thomas Cook shares were down 2.3% at 28p.

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Mon, 11 Feb 2019 11:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214357/ubs-trims-target-for-thomas-cook-as-it-stays-conservative-on-value-potential-of-airline-disposal-214357.html
<![CDATA[RNS press release - 2019 AGM Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207130001_13962125/ Thu, 07 Feb 2019 13:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207130001_13962125/ <![CDATA[News - Thomas Cook suggests possible sale of airline business as it posts wider quarterly loss ]]> https://www.proactiveinvestors.co.uk/companies/news/214151/thomas-cook-suggests-possible-sale-of-airline-business-as-it-posts-wider-quarterly-loss-214151.html Thomas Cook Group PLC (LON:TCG) indicated it could put its airline business up for sale as it posted a wider first-quarter loss, blaming the knock-on effect from last year’s prolonged summer heatwave.

The tour operator made an underlying operating loss of £60mln in the three months ended December 31, compared to a loss of £42mln the same period a year ago.

READ: Thomas Cook confirms 'disappointing' full-year earnings and turnaround plan

Revenue was broadly unchanged in the quarter, rising by 1% on a like-for-like basis to £1.65bn.

A good run of warm weather over the summer period meant fewer people booked overseas holidays while high hotel prices in the Canary Islands hit demand in this area. Demand for Spanish holidays was also weaker amid tough competition.

Thomas Cook said strong bookings for Turkey and North African holidays offset the poor performance for Spanish trips in the period.

Gross margins declined as the company cut prices to draw in UK customers at the end of the summer season and to address weak demand for winter holidays in the Nordics.

The group also took a £4mln hit related to foreign exchange movements.

Bookings for holidays this winter are up 8%, supported by an 8% rise in the airline business after adding more aircraft last spring.

The company said it continued to see strong demand for trips to Turkey, Egypt and Tunisia as customers seek alternatives to high hotel prices in the Canary Islands but average selling prices were 10% lower due to a higher mix of short and medium-haul airline volumes.

Bookings in the tour operator business for the winter period were down 2%, led by declines from the Nordics and Continental Europe, while prices were 3% lower.

Summer bookings fall 

For summer this year, the firm has sold 30% of its programme, which is slightly ahead of last year. However, tour operator bookings dropped 12% as the company reduced capacity across its markets to manage risks throughout the year. Capacity reductions led to a 4% rise in prices.

Airline bookings for summer are also below last year after cutting the number of flights to short and medium-haul destinations by taking in less wet-lease capacity. Average selling prices in the airline division rose 6%.

Looking ahead, the company said it was taking steps to address the challenges it faced last summer by cutting costs, reducing its airline capacity for 2019 and focusing on high quality, higher-margin hotels and destinations.

Airline business up for sale?

Thomas Cook said it has launched a strategic review of the airline business, suggesting this could lead to possible disposal. 

"We recognise that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business,” said chief executive Peter Fankhauser.

“As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course."

Thomas Cook left its guidance for the year unchanged given the early stage of the year and limited visibility due to market uncertainty, particularly in the UK.

Shares jumped 12.50% to 34.96p in morning trading.

Russ Mould, investment director at AJ Bell, said the review of the airline business is an acknowledgement that the company needs to take radical action to steady its performance and repair a fragile looking balance sheet.

"Investors will be hoping it might avert the need for a dilutive fundraising," he said. 

READ: TUI AG shares descend as it blames warm weather and weak pound for profit warning

The news comes after rival TUI AG (LON:TUI) cut its earnings forecast, blaming the hot weather and a weaker pound putting a dent in British consumers' pockets. 

 

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Thu, 07 Feb 2019 08:01:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214151/thomas-cook-suggests-possible-sale-of-airline-business-as-it-posts-wider-quarterly-loss-214151.html
<![CDATA[RNS press release - Director Announcement under LR 9.6.11 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207070504_13961143/ Thu, 07 Feb 2019 07:05:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207070504_13961143/ <![CDATA[RNS press release - First Quarter Trading Statement ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207070004_13961047/ Thu, 07 Feb 2019 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190207070004_13961047/ <![CDATA[RNS press release - Hotel Fund secures ?51m debt funding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190204091521_13956892/ Mon, 04 Feb 2019 09:15:21 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190204091521_13956892/ <![CDATA[News - Thomas Cook and TUI losing market share to new entrants, Morgan Stanley survey suggests ]]> https://www.proactiveinvestors.co.uk/companies/news/213618/thomas-cook-and-tui-losing-market-share-to-new-entrants-morgan-stanley-survey-suggests-213618.html Thomas Cook Group PLC (LON:TCG) remains the most popular tour operator and TUI AG (TUI) is in second place but both seem to be losing market share to newer entrants, a Morgan Stanley survey revealed.

In the survey of UK holidaymakers, some 36% of respondents said they were likely to book with Thomas Cook, compared to 43% in last year’s study.

READ: Thomas Cook confirms 'disappointing' full year earnings and turnaround plan

For TUI, 35% of survey respondents said they would book a holiday through the company, down from 38% last year.

“This is the first drop for both companies in four years, and is likely due to newer entrants (On the Beach PLC (LON:OTB), Jet2), and slower capacity growth than the competition,” Morgan Stanley said.

“Including subsidiary brands, TUI and First Choice combined have lost more market share (54% vs. 63% last year) than Thomas Cook and Airtours (45% vs.50% last year).”

Morgan Stanley reinstates target price for Thomas Cook 

Morgan Stanley reinstated a target price of 60p on Thomas Cook, representing a 64% upside, saying the company seems to have navigated its way past its cash low point and extended covenants with its banks. The investment bank has an ‘equal weight’ rating on the stock.

Thomas Cook fell out of the FTSE 250 in December after a sharp fall in the market value of the firm amid worries about its debt mountain. Last year, net debt ballooned to £389mln from £40mln a year ago but the company insisted its covenants were compliant and it had headroom for future covenant tests.

Free cash outflow was £148mln last year, compared to a free cash inflow of £146mln in 2017.

Thomas Cook also posted a 23% drop in full-year profits and suspended its dividend after a prolonged summer heatwave and subdued consumer spending meant people were less inclined to book overseas holidays.

“The company is de-risking through capacity cuts and cost savings, but reductions in third-party commissions and marketing are affecting revenue,” Morgan Stanley said.

“The 2019 price/earnings of 4.3x is low, but free cash flow is weak due to exceptional costs, there is low visibility on its covenants and liquidity, and working capital is a risk.

“We stay on the sidelines, noting the very wide risk-reward skew (bull +255%, bear -73%).”

Thomas Cook reports its first-quarter results on February 7 and Morgan Stanley predicts a wider loss of £52mln from last year, due to a slow start to winter trading.

TUI cheap but first quarter 'will be poor'

On TUI, Morgan Stanley maintained an ‘equal weight’ rating but lowered its target price to 1,500p from 1,600p.

The bank said TUI’s shares have derated over the past year due to tour operating and UK concerns.

“TUI looks cheap, but Q1 will be poor, so we stay neutral,” Morgan Stanley said.  The bank estimates TUI will report a first quarter loss of €47mln, compared to €25mln a year ago. TUI publishes the results on February 12.

TUI last month reported a 4.1% rise in 2018 earnings (EBITA) and maintained its guidance for the next three years.

READ: TUI AG prepares for potential hard Brexit as it posts 2018 earnings growth

For the 2019 financial year, it estimates underlying EBITA will rise by at least 10%.

“We think TUI can deliver 10% EBITA growth again in FY19 given easy tour operating comparables (and despite some one-off gains), and we note the comeback of Turkey in our survey is positive for tour operating margins and its "Other" Hotels line (loss-making in FY18),” Morgan Stanley said.

TUI has said it is concerned about losing flying rights if the UK exits the European Union without a deal.

Brexit concerns overdone, survey shows

But Morgan Stanley’s survey showed people still expect to travel abroad using package holidays this year.

Of the 73% who plan to travel abroad in the next year, 61% of respondents expect to take a package holiday, up from 59% last year. The survey also showed that 54% of these people are likely to book earlier than last year, up from 53% last year. For the rest of the survey participants who plan to stay at home, just 2% mention Brexit as the main reason for not going abroad. 

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Wed, 30 Jan 2019 12:28:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/213618/thomas-cook-and-tui-losing-market-share-to-new-entrants-morgan-stanley-survey-suggests-213618.html
<![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190129123637_13950560/ Tue, 29 Jan 2019 12:36:37 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190129123637_13950560/ <![CDATA[News - Thomas Cook shares jump as it plans to open China hotels in joint venture with Fosun ]]> https://www.proactiveinvestors.co.uk/companies/news/212992/thomas-cook-shares-jump-as-it-plans-to-open-china-hotels-in-joint-venture-with-fosun-212992.html Thomas Cook Group PLC (LON:TCG) shares advanced as the travel operator announced plans to open two new hotels in China in a joint venture with investment firm Fosun International.

Fosun, which has a 12% stake in Thomas Cook, will build the hotels while the travel firm's China arm will manage them.

READ: Thomas Cook shares bounce higher as talk of a possible fund-raise fades, vague Chinese interest chatter

The properties, due to open in late 2020, include the first Asian branch of the Casa Cook brand.

The two companies recently signed memorandums of understanding for the development of Casa Cook and Thomas Cook Sunwing family resort in one of Fosun's developments in Lijian, southwestern China, and Taicang, near Shanghai.

Thomas Cook chief executive Peter Fankhauser said: “By partnering with Fosun to develop two flagship new hotels that will be managed through our joint venture, we’re making the most of our relationship to give Chinese customers a holiday experience that’s very different to what’s on offer from the competition.

"It’s especially pleasing to be realising our long-held ambition to work with Fosun to launch own-brand hotels, which form the core of our group strategy for profitable growth, here in China.”

Shares in Thomas Cook rose 3.5% to 38p in afternoon trading.

Last month, there were vague rumours of possible Chinese interest in Thomas Cook as the group struggles under a massive debt pile and tries to turn around the business after a disappointing 2018 performance.

Some market commentators said Fosun chairman and Chinese billionaire, Guo Guangchang, could be looking closely at the travel company’s situation.  

Earlier this year, Fosun won approval from the Hong Kong Stock Exchange to spin off its tourism and hotels unit that includes French travel firm Club Med as it seeks to expand its travel business globally.

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Mon, 21 Jan 2019 15:25:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212992/thomas-cook-shares-jump-as-it-plans-to-open-china-hotels-in-joint-venture-with-fosun-212992.html
<![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190107133501_13926187/ Mon, 07 Jan 2019 13:35:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190107133501_13926187/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190107133001_13926179/ Mon, 07 Jan 2019 13:30:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190107133001_13926179/ <![CDATA[RNS press release - Director Announcement under LR 9.6.11 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190104111111_13924295/ Fri, 04 Jan 2019 11:11:11 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20190104111111_13924295/ <![CDATA[RNS press release - Annual Report & Accounts 2018 and AGM 2019 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181217102248_13905997/ Mon, 17 Dec 2018 10:22:48 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181217102248_13905997/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181217070006_13905309/ Mon, 17 Dec 2018 07:00:06 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181217070006_13905309/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181213145500_13903112/ Thu, 13 Dec 2018 14:55:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181213145500_13903112/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181206171038_13894815/ Thu, 06 Dec 2018 17:10:38 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181206171038_13894815/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205170126_13893137/ Wed, 05 Dec 2018 17:01:26 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205170126_13893137/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205164100_13893099/ Wed, 05 Dec 2018 16:41:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205164100_13893099/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205163542_13893089/ Wed, 05 Dec 2018 16:35:42 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3512/LSE20181205163542_13893089/