Thomas Cook's half year earnings hurt by Egypt disruption

15th May 2014 07:56

Tour operator Thomas Cook reduced earnings losses in the first half of the year, but revenues contracted as disruption in Egypt continued to weigh.The company reported an earnings before interest and tax (EBIT) loss of £187m in the six months ended March 31st 2014, an £11m improvement on the prior year thanks to higher profits in Northern Europe, reduced seasonal losses in Germany and strong performances in France and Russia.Sales, however, dropped 0.7% to £9.1bn and revenues fell 6.6% to £3.1bn as the unrest in Egypt and pricing weakness in the UK offset growth in other areas of the business. Concept hotel summer bookings rose 44% and UK 2014/15 winter bookings gained 11%.Online bookings, which account for about £3bn of bookings, jumped 39% as more customers opted to use mobile phones and tablets to arrange their holidays. Net debt at the end of the period came to £811m, a reduction of £404m on last year's figure. During the period, the group generated £119m in gross disposal proceeds through the divestment of non-core businesses in the UK as it streamlined operations and focused on a smaller number of brands. "Our strategy is designed to deliver revenue growth and improved margins over the medium term and, accordingly, the benefits have not yet been reflected in the group's results for the first half 2014 given the early stage of development and the low season over the winter period," the company said."However, bookings for our new products are strong for the summer 2014 season and we expect to report the initial benefits from our profitable growth strategy from the second half of this financial year."Shares in Thomas Cook were down 3.92% to 171.6p at 08:46 on Thursday.RD