Thomas Cook Sees Profit Slump in UK Division

Thomas Cook blame fake holiday sickness claims for 40% fall in UK profits

Average selling prices in the United Kingdom are 6% higher year-on-year for next summer, which Thomas Cook said was mainly down to "input price inflation".

Its UK division saw margins drop after four years of growth.

Thomas Cook said its United Kingdom tour operating business "experienced challenging conditions" in the second half of the year, which resulted in a sharp drop in earnings for the division.

Thomas Cook said a "strong recovery" at its German airline Condor helped the travel firm fly to rising profits for the year.

The company noted that after four consecutive years of profit growth, margins in United Kingdom business declined due to a more competitive market environment, especially for holidays to Spain.

The company also pointed to a surge in costs from fraudulent illness claims and a big bill supporting 10,000 customers caught up in Hurricane Irma, which devastated parts of the Caribbean and the USA state of Florida.

The tour operator said on Wednesday underlying earnings before interest and tax (EBIT) was 330 million pounds ($437.6 million) in 2016-17, a little higher than an analyst consensus of 327 million pounds.

The company said it planned to take legal action against people who make false illness claims.

Thomas Cook also said it continues to re-position the business to accelerate the shift towards online distribution.

Following an improvement in Turkey and Egypt business, coupled with a sharp rise in bookings to Greece and Cyprus, the company has seen a good start to trading for summer 2018.

"We also grew sales of differentiated holidays, by 16% for holidays to own-brand hotels, and by 8% for sales to selected partner hotels, in order to improve our competitive positioning".

The actions the company has taken in the past 12 months will take it "significantly further forward" in its strategy for profitable growth, said Fankhauser.

An improved performance in other markets meant that overall the companies full-year pre-tax profit rose by 35 percent to $61 million (£46 million). On an underlying basis stripping out exceptional items, profit rose to GBP186.0 million from GBP162.0 million.

Revenues have topped £9bn at tour operator and holiday group Thomas Cook, in what its chief executive hailed as a "milestone year".

Net debt at the end of the year stood at only GBP40.0 million, a considerable reduction from GBP129.0 million a year earlier.

The groups chief executive Peter Fankhauser vowed to boost efforts to overturn the downturn across its United Kingdom business, he said: "While conditions are challenging in the United Kingdom, we have implemented a set of actions to improve performance".

Related News:

  • Nuggets' Paul Millsap needs wrist surgery, could miss 3 months

    Nuggets' Paul Millsap needs wrist surgery, could miss 3 months

    Kenneth Faried will likely step in as the starting power forward if Millsap does indeed miss an extended amount of time . There were big sighs of relief in Denver when Paul Millsaps' X-rays on his injured wrist came back negative.
    Different types of alcohol trigger different emotional responses

    Different types of alcohol trigger different emotional responses

    According to the researchers, drinks with a higher concentration of alcohol will give a feel of aggression to the consumer. What's more, spirit drinkers were also the most likely to feel confident (59%), energised (58%) or sexy (42%).
    Zimbabwe set to move quickly to replace Robert Mugabe

    Zimbabwe set to move quickly to replace Robert Mugabe

    Mugabe's resignation late on Tuesday triggered wide scale celebration and dancing in the streets of Harare . Zimbabwean President Robert Mugabe has stepped down, according to the speaker of the country's parliament.
  • Defecting North Korean soldier shot five times as he runs towards South

    Defecting North Korean soldier shot five times as he runs towards South

    Surprisingly, North and South Korean soldiers did not exchange fire in the first shooting in the area in more than three decades. One of the pursuing guards appears to briefly cross the dividing line between the two countries before turning around.
    IOS and Android get Nintendo app ahead of release date

    IOS and Android get Nintendo app ahead of release date

    If you have done the later already via an Australian My Nintendo account, then you're stuck using that account for the time being. Those who want to interact with their friends can spend time at the campsite and build a relationship with them.
    Charlie Rose Is Accused Of Sexual Harassment By 8 Women

    Charlie Rose Is Accused Of Sexual Harassment By 8 Women

    On Tuesday's CBS This Morning , Rose's co-anchors Nora O'Donnell and Gayle King spoke frankly about the alleged behavior. It is systematic and pervasive and I've been doing a lot of listening, and I'm going to continue to do that.
  • Amazon Australia pre-launch selling test starts on Thursday

    Amazon Australia pre-launch selling test starts on Thursday

    It looks like Amazon will be launching for Black Friday after all. On Tuesday, Amazon shares closed up 1.17% at $1,139.49. Let's Make History!' Amazon declares in the email.
    Our first interstellar visitor is a long, ominous asteroid

    Our first interstellar visitor is a long, ominous asteroid

    This indicated that the object was a spindle shape about 400 m (1,300 ft) long that revolves on its axis every 7.3 hours. And fortunately for all fans of oddball interstellar interlopers, there will likely be news of more in the near future.
    Twitter reactions to the wacky LaVar Ball interview on CNN

    Twitter reactions to the wacky LaVar Ball interview on CNN

    Ball's son, UCLA basketball LiAngelo Ball, and two of his teammates were facing several years in prison on a shoplifting charge. If there's anything the former reality star loves more than golfing at Mar-a-Lago, it's firing off ill-thought out tweets .
  • Nick Xenophon Team senator resigns due to United Kingdom  citizenship

    Nick Xenophon Team senator resigns due to United Kingdom citizenship

    The British Home Office had pocketed her money before the nomination, Xenophon said. "There may be a referral". Her mother was born in Singapore to British parents, and migrated to Australia with her family.
    Egypt's Sisi meets Lebanese PM Hariri in Cairo

    Egypt's Sisi meets Lebanese PM Hariri in Cairo

    The move caught even his aides off guard, and politicians close to him say Riyadh forced him to quit and held him in Saudi Arabia. Hariri is now in Paris, where he met French President Emmanuel Macron on Saturday.
    Paxton Lynch named Denver Broncos' Week 12 starting QB

    Paxton Lynch named Denver Broncos' Week 12 starting QB

    The Denver Broncos aren't just getting a new offensive coordinator this week - they're getting a new quarterback. He was battling with Siemian for the starting job this summer but injured his shoulder in the preseason.


Most liked

5 former Broncos named semifinalists for Pro Football Hall of Fame
Along with the San Francisco 49ers Roger Craig , James was the only other running back among this year's semifinalist group. Two former Dolphins - linebacker Zach Thomas and offensive tackle Richmond Webb - did not make Tuesday's cut from 108 to 27.

Brian Bowen Not Allowed to Play at Louisville, Can Transfer
Bowen will be provided with written permission to contact another college institution if he wishes to transfer. Bowen, a 6-foot-7 small forward from Saginaw, Mich., was a five-star prospect coming out of high school.

This Is How the Galaxy S9 Plans to Beat iPhone X
So, going by this, the Galaxy X will look like the same smartphone as present in the images used in this article. Between December 1-11, they'll be handed a Galaxy S8 or Galaxy Note 8 when they visit Samsung Digital Plaza.

Saudi king, Russian president discuss counterterrorism by phone
US President Donald Trump and Russian President Vladimir Putin spoke on the phone for about an hour on Tuesday. Putin and Assad met for talks in Sochi , the Russian Black Sea resort, Russian state media reported Tuesday.