Swine flu hits Thomas Cook
TOUR operator Thomas Cook yesterday admitted it would miss its operating profit target, compounding the gloom in the leisure sector.
The group, in which insolvent German retailer Arcandor still holds a 53 percent stake, said it would fall short of its hopes of achieving operating profit of £480m in 2010.
Chief executive Manny Fontenla-Novoa said the 2010 target had been set as an “aspiration” at the time of the group’s formation prior to the economic downturn following a tie-up of Arcandor’s travel unit and Britain’s MyTravel in 2007.
“That was put out there at the time we merged the businesses when there was no recession and the pound was much stronger against the euro and the dollar,” he said.
The group yesterday said that the effects from the swine flu pandemic had cost the business £12.6m after holidaymakers cancelled trips.
The group said yesterday reported a loss from operations before exceptional items and swine flu nine months to June 2009 of £49.5m
Fontenla-Novoa added, however, the company was confident of meeting market expectations for operating profit in 2010, which were significantly lower than the company’s own target. He also reiterated the company’s expectations of meeting 2009 forecasts.
The group yesterday said that while UK bookings to date were down 11 per cent, in line with capacity cuts, average selling prices were up 8 per cent.
Charles Stanley analyst Sam Hart said: “The shift towards later bookings is expected to persist, with consumers reluctant to book holidays months in advance due to uncertain employment prospects.”