Last November, Harriet Green shocked everyone by heading for the departure gate, despite telling MT’s Inspiring Women London conference only a week earlier that Thomas Cook’s transformation was ‘absolutely not done’. At the time, the former travel company chief exec said her ‘work was complete’, but its results today prove it’s very much still mid-turnaround.
Whether Green was really the person to keep piloting Thomas Cook is another question of course, but investors were certainly less than pleased with today’s first quarter results, which showed gross profits were flat on a like-for-like basis at £327m for the three months to December 31st. Shares fell as much as 6% to 125.2p this morning, before recovering a tad to 127p.
While lower oil prices helped cut its fuel bill, the travel company was held back by ‘overcapacity’ (i.e. empty seats on its flights) and passenger payouts for delayed flights. Its pretax loss still shrank 29% to £115m, but revenues also slipped 8% to £1.52bn as it closed unprofitable routes. Sales were better on a like-for-like basis, up 1.6%.
It was turbulence in Germany and Scandinavia that really held Thomas Cook back, though. Summer bookings were down 6% year-on-year in ‘Continental Europe’ and 7% in the Nordics, but rose 5% in Britain. ‘We are relying on a very strong UK,’ chief exec Peter Fankhauser said.
Thomas Cook is certainly a long way from its near-death experience in 2011, in no small part thanks to Green. But investors look like they want to see the money in all its markets – not just the UK.