What has happened to Thomas Cook (TCG) since September? Just a few months ago optimism at the tour operator was high, with the 2017 summer season nearly fully booked and over a third of holidays in the upcoming winter season sold. Two months on and the shares have fallen 13 per cent, hurt particularly badly by these full-year results.
Headline numbers in the year to September 2017 suggest Thomas Cook hasn’t done much wrong. Demand for cheap holidays is strong and total customer numbers rose 6 per cent to 20.2m, sending like-for-like revenues up 9 per cent at constant currencies. Bookings and pricing for the 2018 summer season are also ahead of last year, thanks to a recovery in sentiment towards Turkey and Egypt and a 6 per cent increase in average selling prices at the UK tour division.
But – like many of its tour operator peers – Thomas Cook is at the mercy of its margins. The UK business (the smallest contributor to the tour division’s operating profits) reported its first downturn in margins after four years of growth due to massive competition for holidays in Spain. This sent UK operating profits down 34 per cent on a like-for-like basis to £52m, meaning operating profits for overall tour operations were flat.
| THOMAS COOK (TCG) | ||||
| ORD PRICE: | 111p | MARKET VALUE: | £1.70bn | |
| TOUCH: | 110.4-111p | 12-MONTH HIGH: | 128p | LOW: 72p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 139 | |
| NET ASSET VALUE: | 18.3p* | NET DEBT | 14% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 9.31 | -158 | -16.7 | nil |
| 2014 | 8.59 | -114 | -8.2 | nil |
| 2015 | 7.83 | 50 | 1.6 | nil |
| 2016 | 7.81 | 34 | 0.3 | 0.5 |
| 2017 | 9.01 | 46 | 0.8 | 0.6 |
| % change | +15 | +35 | +167 | +20 |
| Ex-div: | 8 Mar | |||
| Payment: | 5 Apr | |||
| *Includes intangible assets of £3.1bn, or 204p a share | ||||
