Third year of record profits for Thomas Cook UK&I

Thomas Cook UK & Ireland delivered a third year of record profits, achieving  £87.1 million in the 2005-06 financial year.

This was up from £83.3 million the previous year and £51 million the 12 months before.

The company further improved on its margin, taking it up from 5 to 5.1 per cent.

A profit margin of five per cent or more is considered ‘the holy grail’ within the travel industry.

Thomas Cook UK & Ireland announced its figures as its parent company, Thomas Cook AG, confirmed its financial performance for the same period. The profit delivered after tax by the overall group was 170.8 million euros, which saw carryings rise by 2.8% to 13.61 million but staff numbers drop by 15% to 19,775 with 3,531 lay-offs.

Four months into its new financial year the UK & Ireland business is confident that it will meet its ambitious profit target for 2006/07, although this target is not publicly disclosed. 

The results reinforce Thomas Cook’s position as the most profitable travel company in the UK, the group claimed.

Thomas Cook – owned by German department store group KarstadtQuelle – has been tipped as a likely buyer of First Choice’s mainstream holidays division along with MyTravel and Virgin but nothing was mentioned in this morning’s financial statement.

The Thomas Cook results came against a difficult background, with 2006 described as  “notoriously challenging” due to avian flu, the World Cup, terror threats and the hottest UK summer on record which all had a significant impact on customer numbers. The UK travel market fell by 5.4% in the financial year.

Thomas Cook said a “commitment to driving down costs and reacting quickly to changes in customer demand” enabled the company to outperform the market.

Manny Fontenla-Novoa, chairman and group CEO of Thomas Cook AG, said: “Once again Thomas Cook UK & Ireland has delivered ground-breaking and industry-leading profits.

“The strong results in the 2005/2006 financial year could not have been achieved without the great help and support demonstrated by the people of Thomas Cook.

“Despite great changes within the organisation and across the industry they have worked together to deliver another strong performance, both financially and in terms of customer service.”

He continued: “My vision for both Thomas Cook in the UK and for the wider group is simple: to continue to build a lean and streamlined integrated business that delivers exceptional service to its customers, together with high levels of profitability for its shareholder. We have a dynamic leadership team in place and employ a motivated workforce.

“In the UK, our focus is to maintain and develop our core focus – delivering exceptional holidays to our customers. But over the past 18 months we’ve also been developing a strategy to strengthen and evolve our business in two additional areas – Financial Services and Independent Travel.  The current financial year will really see these new sectors take off for Thomas Cook.”

Update to follow…..

by Phil Davies

Related News Stories: