LONDON (dpa-AFX) - Tour operator Thomas Cook Group Plc. (TCKGY.PK, TCG.L) Thursday said its delivery of strategy of sustained profitable growth remains on track, and that its trading is encouraging with increased summer bookings.
The company expects group underlying margin for the Summer season and the full year would be above last year's levels, consistent with its profitable growth strategy. Meanwhile, average selling prices are below last year in some markets.
Thomas Cook added that its winter trading, despite the significant market disruption caused by continued unrest in Egypt, has been satisfactory.
Group Chief Executive Officer Harriet Green said, 'Customer bookings for the Summer 2014 season have shown an improving trend since we reported our first quarter results with around 50 percent of holidays already sold, slightly higher than at this stage last year. Compared with last year, margins are expected to improve more than average selling prices, reflecting enhanced yield management and the benefits of our cost out and profit improvement programme, which is delivering ahead of schedule.'
Regarding the current trading, the company said the Winter season is 93 percent sold and in line with last year's booking pattern. The adverse impact of continued social unrest in Egypt was successfully mitigated through the more integrated management processes and improved customer service, the company noted.
Excluding Egypt, the company achieved higher average selling prices and bookings. Gross margin has been positively impacted by improved yield management and cost efficiencies.
In the UK, winter bookings are 2 percent higher than last year, excluding Egypt. Meanwhile, average selling prices were 3 percent lower than last year, impacted by a higher proportion of one-week duration holidays and competitive pricing in certain destinations as market capacity was redirected from Egypt.
For Continental Europe, average selling prices improved 4 percent due to strong performances in most source markets. Bookings have been impacted by strategic reductions in capacity in France and Russia.
For Northern Europe, bookings are 5 percent higher than last year, excluding Egypt, while average prices were 2 percent lower.
Regarding Summer 14, the company said the season is already 50 percent sold, 1 percent more than this time last year with 2 percent rise in overall bookings. Bookings for UK business are 3 percent higher with a 1 percent reduction in capacity commitments, while average selling prices are 2 percent lower.
Continental Europe continues to trade well with slightly higher average selling prices and an improved booking trend. Bookings in Northern Europe are 2 percent higher than last year, while average selling prices are 2 percent lower.
Going forward, the company said its focus remains on implementing strategy for sustainable profitable growth and delivering on its targets.
The company is scheduled to release a full update at half year results announcement on May 15.
The company also confirmed the delivery of disposals target eighteen months early with the successful disposal of its interest in The Airline Group, shareholder in NATS.
In London, Thomas Cook shares are currently trading at 181.21 pence, down 0.19 pence or 0.11 percent.
Copyright RTT News/dpa-AFX