Broker snap: UK a concern at Thomas Cook

10th May 2011 12:24

RBS has scaled back its target price for travel company Thomas Cook after an "uninspiring update" which saw first half numbers come in under expectations.First half operating losses were worse than the broker's expectations at £166m, up from the £130m reported last year."While the gap can be explained by Easter falling in the second half (£15m) and the cost of revolutionary activity in Africa and the Middle East (£22m), the disappointment is that cost savings and the strength of trading in Scandinavia and Condor were wiped out by a very poor result in the UK," the broker said.RBS reduces its estimates for 2011 earnings before interest and tax from £410m to £380m, but this is still above last year's £362m.The target price is lowered to 230p, from 260p, but a 'buy' is still kept.---BC