Thomas Cook Group PLC, which is the UK’s second-largest travel company, reported a £590 million overall annual loss. Even though Harriet Green, the new chief executive officer at Thomas Cook Group PLC, expressed her dissatisfaction regarding the loss, the company remains optimistic about its future. The UK’s travel company tries to reorganize itself to get back in the game. The high annual loss was caused by reduced capacity and higher fuel costs as well.
Thomas Cook’s Results
According to a statement, Travel Cook Group PLC 's statutory losses for the year to the end of September were 590 million, compared to £518 million a year earlier. As for Travel Cook’s pre-tax losses for the same period, they came in at approximately £485 million, up from roughly £398 the last year. Certainly the restructuring costs, which were designed to turn around the UK’s second-largest travel agency, were partially responsible for reported pre-tax losses.
Thomas Cook Group PLC saw underlying profit decrease by as much as 49 percent to £156 million, compared to over £300 million a year ago. Even though the result was more or less in “line with expectations”, the company underlined that it was affected by higher fuel costs.
In addition, the UK’s second-largest travel company saw its revenue slump 3 percent to about £9.5 billion from approximately £9.8 billion. Thomas Cook Group PLC also informed that it had reduced its net debt to nearly £788 million from about £891 million over the period.
As it was stated by Travel Cook CEO Harriet Green, aforementioned figures echoed challenges the company had been facing during the period. However, she underlined that, on the other hand, the 2012 results did not reflect improvements which were made in the last quarter of the year while the company was struggling amid difficult trading conditions in the market.
New CEO, New Approach
Harriet Green was named as the new CEO of Thomas Cook Group Plc back in May. The recent results of the company were described by her as "unacceptable", yet she believes that the group is slowly recovering. She underlines whenever she can that Thomas Cook has a bright future ahead of itself.
A key to success of Thomas Cook Group Plc is creating a well-organized as well as efficient organization. In her opinion, changes in the organizational structure and key management are essential. The turnaround plan also includes an implementation of cultural change as well.
Reform plans are expected to result in over £100 million of annual cost benefits. In addition, Travel Cook Group PLC is to concentrate on reducing its net debt by improving cash generation and the management in general, not to mention other upcoming measures.
Even though Travel Cook CEO Harriet Green has not specified the potential downsizing plan, a “more streamlined business” is expected to be introduced by her reform plans. She underlined: “We employ 31,000 people, 17,000 in the UK. As we reshape we may have a greater need for certain skills, whether it’s around the web or technology, and less in other areas, as we continue to enhance the customer experience.”
However one thing is sure that more reforms are to come. Even though detailed plans have not been revealed, analysts expect cost-cutting measures which will affect the company’s airline and internet business.