Thomas Cook FY profit hit by terror attacks but EBIT beats estimates

23rd Nov 2016 07:38

(ShareCast News) - Thomas Cook reported a drop in profit and revenue for the year to the end of September as the travel company took a hit from a series of terror attacks, but the group's underlying profit from operations came in ahead of expectations.Pre-tax profit in the period fell to £42m from £50m the year before, as revenue declined 22% to £7.81bn.Meanwhile, basic earnings per share fell to 0.8p from 1.6p and underlying profit from operations (earnings before interest and taxes) was down 2% to £308m. Credit Suisse had been expecting underlying profits from operations of £298m, while Numis had pencilled in £296m.Thomas Cook said the EBIT included a £39m benefit from positive foreign exchange translation.The company announced its first dividend in five years, of 0.5p per share for the full year 2016, which was in line with the guidance it gave last year.Thomas Cook said profits were dented by weaker consumer confidence in Germany and Belgium following the Brussels terror attacks. However, profit in Russia was up despite the travel ban from Russia to Turkey and losses in the French business were reduced.Chief executive Peter Frankhauser said: "In what's been a difficult year for tourism, I'm pleased with the progress that we've made at Thomas Cook. The early actions we took to shift our holiday programme into the Western Mediterranean and long haul, together with the benefits of a stronger Euro, helped us to maintain revenue at Group level."Additionally, a focus on holidays to our own-brand and partner hotels delivered record profit margins in our UK and Northern European businesses. Underlying operating profit for the group was £308m. This reflects the decline in customer demand for Turkey, which impacted Condor in particular, and the effect on our Belgian business of the Brussels attacks."The company said it has seen an encouraging start to trading for Summer 2017, with bookings ahead across all segments.Shore Capital said: "We believe that this is a good performance from Thomas Cook given the geo-political backdrop and current trading is encouraging, although comments around H2 weighting suggests that full year results are even more dependent upon summer trading."At 1023 GMT, the shares were up 9% to 80.19p.