Thomas Cook bins divi after tougher September

29th Sep 2011 07:32

Though it stopped short of issuing another profit warning, package tour firm Thomas Cook said September has been a more challenging month than July and August, while it has also suspended future dividend payments as it seeks to rebuild its balance sheet.Summer booking trends in the holiday firm's key markets have remained largely in line with expectations since it last reported at the beginning of August, and underlying operating profit for the full-year is expected to be "broadly in line" with market expectations, despite a tough September, especially in the group's French business.Though the company has binned the dividend for the time being, the previously declared interim dividend of 3.75p per share will be paid on 7 October 2011.The statement hints of a cash crunch looming at the end of the year, traditionally a seasonal low point for cash flow, and the company is "working closely and constructively" with its bankers to improve its financial flexibility.Looking at the Summer 2011 holiday season, which is now virtually over, the company said the level of bookings from the UK was more or less unchanged from last year, despite a 4% increase in the average selling price.Bookings from Central Europe were up 1%, despite a 7% reduction in capacity, while the average selling price rose 3%.The West/East Europe grouping saw cumulative bookings ease 1% from last year, on capacity that was 2% lower, while the average selling price rose 2%.Bookings from Northern Europe shot up 13% after the company increased capacity by 12%, but the average selling price was unchanged from last year.The Airlines Germany division saw cumulative bookings rise 6% year-on-year, in line with increased capacity, while the average selling price was up 3% from the corresponding period of last year.For the Winter 2011/12 season, cumulative bookings from the UK are down 7% and the average selling price is 3% lower. Central Europe has seen a 6% slide in bookings, offset by a 6% increase in the average selling price.The big slide is in bookings from West/East Europe, down 16% on last year, although here the company has slashed capacity by 20%. Northern Europe has generated bookings up 6% higher than last year while Airlines Germany is 26% ahead. --jh