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Market frets over Thomas Cook's typically lossmaking first half

Shares in the tour operator dropped 8 per cent on this relatively uninspiring trading update
February 9, 2017

Just as cheer emerged on tour operator Thomas Cook 's (TCG) return to the dividend roster late last year, this week's trading update has dampened spirits, sending the shares down 8 per cent

IC TIP: Buy at 85p

Revenues edged up 1 per cent thanks to a successful capacity shift away from Turkey and Egypt to European destinations such as Greece and long-haul flights. But margins were flat, and although the booking pattern is solid from management's view, it hasn't inspired shareholders - winter is 1 per cent up with 82 per cent of capacity sold and summer is up 2 per cent with 31 per cent sold.

Exposure to the overserved German market through its Condor business remains an issue as overcapacity is hitting pricing.