LONDON (dpa-AFX) - British tour operator Thomas Cook Group Plc. (TCKGY.PK, TCG.L) reported Thursday that its first-quarter seasonal underlying operating loss increased by 14 million pounds on a like-for-like basis to 60 million pounds, against a strong prior-year period. Currency translation movements during the quarter led to an impact of 4 million pounds.
Loss from operations on a reported basis increased 7 million pounds, reflecting lower separately disclosed items.
The company noted that the seasonal loss was led by the Group Tour Operator, where a weaker performance in the UK and Northern Europe was partially offset by a good performance in Continental Europe. The company's Group Airline continued to perform well, delivering a seasonal underlying loss in line with a strong comparative period last year.
Group revenue was broadly unchanged in the first quarter, rising by 1 percent on a like-for-like basis to 1.66 billion pounds, led by strong customer demand for Turkey and North African destinations, offsetting weaker demand for Spain.
Gross margins for the quarter were lower, reflecting a continuation of the highly competitive market conditions in the UK at the end of the summer season, and weaker demand for winter holidays in the Nordics.
Group Tour Operator bookings were down 2 percent, with pricing 3 percent lower. For the Group Airline, overall bookings were 8 percent ahead, in line with capacity increases.
The company noted that its Summer 2019 programme is 30 percent sold, slightly ahead of last year.
In addition, Thomas Cook announced a strategic review of its Group Airline. The company said it is an early stage in this review process, which will consider all options to enhance value to shareholders and intensify its strategic focus. The company will provide an update on this process in due course.
Looking ahead, Thomas Cook said it addressing some of the challenges faced in Summer 2018 by reducing its committed airline capacity for 2019 and increasing the focus on high quality, higher-margin hotels and destinations.
In addition, the company is continuing rigorously to drive down costs to give greater operational flexibility, while remaining fully focused on its strategy, and managing its financial and commercial commitments.
Thomas Cook said it is making no changes to the full-year expectations set out in November 2018, reflecting the early stage in the year and limited visibility due to wider market uncertainty, particularly in the UK.
In November 2018, Thomas Cook announced that Sten Daugaard had been appointed as an executive director to serve on the Board as interim CFO. Sten was initially appointed for a one year term.
The company today announced that, in line with its usual approach for executive directors, it has been agreed that the end date of the contract be removed and replaced with a six-month notice period to ensure that Sten continues to be able to support the company.
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