Broker snap: Prime Markets a fan of Thomas Cook's new strategy

16th May 2013 11:30

Prime Markets has labelled travel agent Thomas Cook as a 'buy', hailing the new strategy of Chief Executive Officer (CEO) Harriet Green.The company announced on Thursday that its loss before tax was £390.9m in the half year to March 31st, much improved from the £584.1m loss the year before, despite revenues falling from £3.31bn to £3.22bn. Summer bookings are strong with 60% of planned capacity already sold, two percentage points higher than the same time last year.The company also unveiled a £1.6bn plan restructure its capital structure which will see the average maturity of its debt increase while decreasing its overall leverage.Richard Curr, Head of Dealing at Prime Markets, says that sector peer TUI Travel is no longer benefitting from the woes at Thomas Cook."Our February 'buy' note for Thomas Cook rival TUI Travel was based to some degree on the group taking advantage of Thomas Cook woes. TUI Travel went on to hit and way exceed our then 304p price target, but all the signs are now that any competitive advantage they may have had has gone as Thomas Cook is fast recovering lost ground."Curr said that Green has introduced a new "lean and mean culture" to Thomas Cook and has strengthened the leadership team to transform its online offering."The improvement in trading, bookings and reduction in losses and debt may well be a work in progress but marks a sea change to the old lumbering company drowning in debt just a year ago."Prime Markets backs Thomas Cook and the strategy of CEO Harriet Green, with a short-term target of 160p plus."The stock had already passed this mark in intraday trade on Thursday, up 12.65% at 163p by 11:29.BC