TIDMTCG
RNS Number : 6336B
Thomas Cook Group PLC
24 September 2018
24 September 2018
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
Pre-close trading update
-- Good strategic progress through the year to date
-- Challenging period of 'lates' trading following unprecedented months of hot weather
-- Full year underlying EBIT now expected to be around GBP280 million, based on recent trading
Peter Fankhauser, Chief Executive of Thomas Cook, commented:
"Summer 2018 has seen a return to popularity of destinations
such as Turkey and Tunisia. However, it has also been marked by a
prolonged period of hot weather across Europe. This meant many
customers spent June and July enjoying the sunshine at home and put
off booking their holidays abroad, leading to even tougher
competition and higher than usual levels of discounting in the
'lates' market of August and September.
"Our recent trading performance is clearly disappointing.
However, despite the recent challenges, we continue to make good
strategic progress which positions us well to drive further
performance improvement; this includes the launch of our Expedia
alliance in the UK and Scandinavia, signing our first own-brand
hotel in China and lining up a pipeline of 10 new Cook's Clubs in
some of our key destinations for Summer 2019."
Current trading
Summer 2018
Our Summer 2018 programme is now 90% sold, in line with last
year. Total Group bookings are up 12% compared to this time last
year driven by the return in popularity of holidays to Turkey,
Egypt, Tunisia and Greece. Pricing across all segments remains
higher than last year but, with a higher mix of short/medium-haul
airline bookings, overall average selling prices are 5% lower.
Summer 2018 Year-on-Year Variation %
Bookings(i) ASP(i) % Sold(ii)
UK Flat +7% 94%
Continental Europe(iii) Flat +2% 87%
Northern Europe +4% +2% 98%
Group Tour Operator +1% +3% 92%
Short & Medium
Haul +18% +6% 89%
Long Haul -1% +2% 90%
Group Airline(iv) +15% +1% 89%
Total Group +12% -5% 90%
Based on cumulative bookings to 15 September 2018
Notes (i) Risk and non-risk customers
(ii) Risk customers only
(iii) Continental Europe excluding legacy city and domestic
hotel-only business bookings up 3% with ASP flat
(iv) Group Airline figures include intercompany sales to the
Group Tour Operator
Our Group Tour Operator has experienced a highly competitive
trading environment in the 'lates' market, as a consequence of the
sustained period of hot weather across Europe this summer. Overall
Group Tour Operator bookings are up 1%, while pricing is up 3%.
UK Tour Operator bookings are in line with last year, while
average selling prices are up 7%. The slowdown in customer bookings
during June and July extended into August, leading to higher than
normal levels of promotional activity. This has exacerbated
pressure on margins, on top of an already competitive market for
Spanish holidays, as previously highlighted.
Northern Europe bookings are up 4%. However, growth in bookings
has been at the expense of price, with average selling prices now
up 2%, a fall of two percentage points since the last update. We
have experienced a similar pattern in Continental Europe, with
bookings up in recent weeks driven by lower pricing. Average
selling prices are up 2%, a fall of one percentage point since the
last update.
Our Group Airline performance is broadly in line with our last
update despite headwinds of continued disruption in the sector:
overall bookings are up 15%, in line with capacity increases,
reflecting growth in short and medium haul. Group Airline pricing
is up 1% due to the shift in mix away from long haul towards short
and medium haul. While long haul yields are unchanged since the
last update, short and medium haul yields have fallen by two
percentage points, reflecting a more competitive market.
Winter 2018/19
Our Group Tour Operator programme is 43% sold for Winter
2018/19, with bookings 2% behind last year and average selling
prices up 1%. The UK has made a good start with demand ahead of
last year, but this has been offset by a slow start in the Nordics
and Continental Europe which are experiencing some knock-on impact
from the hot summer weather. This has led us to proactively trim
capacity in the Nordics by 5%.
The positive booking trends for the Group Airline have continued
into winter, with double-digit growth in bookings to short and
medium-haul destinations, and good growth in long haul.
Outlook
Trading since the last update has been tough, particularly in
the Tour Operator, where our ability to drive margins in the
'lates' market has been further restricted by excess summer
capacity. In addition, we have reflected the more difficult trading
environment for some of our suppliers in our approach to historic
hotel recoveries, a non-cash item.
Accordingly, we now expect to deliver full year underlying
operating profit of around GBP280 million, of which the greater
element of the downgrade is related to the weak trading.
The impact of the hot summer is continuing to be felt into
Winter trading. As usual, we will provide detailed guidance for
full-year 2019 in November. However, despite recent challenges, we
continue to make good strategic progress which positions us well to
return to profitable growth.
Analyst and Investor Call
A conference call and webcast for investors and analysts will be
held today at 08.00 (BST):
- Standard International Access: +44 (0) 20 3003 2666
- Password: Thomas Cook
Forthcoming announcement dates
The Group will announce its full year results to 30 September
2018 on 29 November 2018.
Enquiries
Tej Randhawa, Thomas Cook
Analysts & Investors: Group +44 (0) 20 7557 6487
Matthew Magee, Thomas Cook
Group
Chris Alfred, Thomas Cook +44 (0) 20 7294 7059
Media: Group +44 (0) 20 7294 7203
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END
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