Thomas Cook counts the cost of ash cloud

1st Dec 2010 07:10

Holiday firm Thomas Cook said winter bookings are going well after a year in which profits were blighted by the volcanic ash cloud in April.Adjusted underlying profit before tax in the year to 30 September was in line with market expectations at £277.0m, down 6.1% from £294.9m the year before. The group saw a substantial increase in profits from Central Europe and its Airlines Germany business but this was not enough to offset the harder times experienced in the UK.Lost margin from the volcanic ash cloud that grounded planes in Britain at the onset of summer was put at £29.2m, while the company paid out £52.9m to manage the welfare and repatriation of stranded customers. Revenue eased 4.1% to £8,890.1m, below market expectations of £9,048m and down from £9.269m last year. The group said the revenue decline was down to planned winter capacity cuts and a softer summer trading environment. In constant currency terms, revenue was down 5% year on year.Net debt at the end of September was a better than expected £804m but was up from £675m a year earlier.The group achieved a significant improvement in cash flow, with a £121m increase in operating cash flow to £299m.Adjusted underlying basic earnings per share fell 8.6% to 22.8p from 25.0p. Broker Panmure Gordon had predicted 23.7p.The full year dividend has been maintained at 10.75p after the payment of a final dividend of 7p."Current trading is encouraging, with cumulative bookings in all markets, except Canada, ahead of prior year. The UK trading environment does remain uncertain and therefore we continue to forecast broadly flat capacity. Capacity in Northern Europe is also expected to be broadly flat, albeit bookings are ahead of last year," the company said.Pricing trends and booked load factors in our major markets are currently ahead of last year, the statement added.