Download 9 February 2017 - Thomas Cook Group

28 March 2017
Pre-close trading update
Highlights
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

Winter 2016/17 closing out as expected, with bookings similar to last year’s levels
Summer bookings up 10% with strong growth to Greece and smaller European destinations
Full year underlying EBIT guidance maintained
Peter Fankhauser, Chief Executive of Thomas Cook commented:
”Customers’ appetite to go abroad on holiday this summer is good across all our markets despite continued
political and economic uncertainty. Our decision to expand our holiday offering to Greece has helped support
customer demand, with bookings to Greece up by around 40% versus last year, while smaller destinations
like Cyprus, Bulgaria and Croatia are also proving popular. After a slow start to the season and a tough year in
2016, we’re seeing early signs that customers are beginning to go back to Turkey and Egypt.
”Following strong growth last year, bookings to the Spanish Islands have levelled off in a very competitive
market. Competition is particularly intense in the airline sector, putting downward pressure on pricing.
“As we look ahead to the rest of the year, I am confident that the work we’re doing to strengthen the quality
and appeal of our holiday offering will win more fans for Thomas Cook, demonstrating continued progress in
our transformation to put our customers at the heart of the business.”
Current trading
Winter 2016/17
Our Winter programme, now 90% sold, is closing out as expected. Bookings are up 1% compared to this time
last year, with average selling prices down 1%. This position is unchanged since our last update at our first
quarter results in February. We have grown sales of holidays to Spain, particularly the Canaries, and to
certain long haul destinations such as the Dominican Republic, offsetting softer demand for Turkey.
Our UK business has further expanded its winter sun programme with bookings up 6%, reflecting strong
growth in both charter risk package and seat-only sales, with pricing down 1%. In Continental Europe, pricing
is up by 2% while bookings are 2% lower reflecting weaker demand for Turkey than last year. For Northern
Europe, bookings are slightly below last year’s exceptionally strong levels, and pricing is down 3%.
Although conditions remain very competitive in the airline market, Condor’s load factor has improved, with
bookings down 2% compared to capacity reductions of 5%, while pricing is up 1%.
Winter 2016/17
Year-on-Year Variation %
(i)
(i)
% Sold
(iii)
88%
Bookings
ASP
UK
+6%
-1%
Continental Europe
-2%
+2%
84%
Northern Europe
-1%
-3%
99%
Airlines Germany (Condor)
-2%
+1%
88%
Total
+1%
-1%
90%
(ii)
(iv)
Based on cumulative bookings to 18 March 2017
Notes: (i)
(ii)
(iii)
(iv)
Risk and non-risk customers
Risk customers only
UK average selling price is up 5% for charter risk and down 5% for seat only, resulting in an overall ASP down 1% on a blended basis
For the tour operator only, the Winter 2016/17 season is 94% sold, in line with last year
1.
Summer 2017
Our Summer 2017 season is 42% sold, 1% ahead of last year. Bookings for the Group are up 10% compared
to a weak comparable period last year when sales were disrupted by a series of geopolitical events. Demand
this year is particularly strong for Greece and smaller European destinations including Cyprus, Bulgaria,
Croatia and Portugal.
Northern Europe continues to trade very well, with bookings up by 11% and average prices up 2%, boosted
by strong demand for our own-brand hotels and differentiated holiday offering. Bookings in Continental
Europe are also significantly higher, with double digit growth in most markets, although margins are slightly
below last year’s levels.
Condor has refocused its programme on selected routes resulting in a double-digit percentage increase in
bookings, despite continuing overcapacity to certain destinations. However, pricing across both short and
long-haul destinations remains weak, as anticipated, with average selling prices down 6%. Our plan to
increase Condor's profitability in the second half of the year remains on track.
In the UK, amid a more competitive market to the Spanish Islands as we highlighted in our last update, our
focus remains on selling higher margin, quality holidays rather than pursuing volume growth. As a result,
charter risk pricing is up 9%, while bookings are slightly behind last year. For the UK as a whole, including
seat-only and non-risk package holidays, bookings are flat overall and average selling prices are up 3%.
Outlook
Trading for the Group is progressing in line with our expectations. While we are seeing some margin pressure
in parts of our business due to more competition, overall demand for our summer holidays is strong. Based
on our current trading performance, and supported by further financial benefits from implementing our
strategy, we continue to expect our full year underlying operating result to be in line with current market
expectations.
Forthcoming announcement date
The Group intends to announce its results for the six months ended 31 March 2017 on 18 May 2017.
Enquiries
Analysts & Investors
James Sandford, Thomas Cook Group
Tej Randhawa, Thomas Cook Group
+44 (0) 20 7557 6433
+44 (0) 20 7557 6487
Media
Matthew Magee, Thomas Cook Group
+44 (0) 20 7294 7059
2.