Thomas Cook profits up


Thomas Cook profits up
Travel group Thomas Cook has said it expects to report an annual operating profit "significantly" higher than market expectations.

In a trading update today the company said its provisional group pro forma operating profit before exceptional items rose 26 per cent to €375.3 million (£269.7 million) in the year to October 31st.

The company also announced plans for a €375 million (£269 million) share buy-back programme.

In addition, Thomas Cook repeated its belief savings of at least €200 million (£143 million) will be achieved following its recent merger.

The anticipated savings from the tie-up between the travel unit of German group KarstadtQuelle and UK rival MyTravel provide Thomas Cook with a "sound platform" to achieve its target of raising the group's operating profit to at least €620 million (£445 million) over the next three years, the company said today.

"Both our current trading and our first operating result as Thomas Cook Group plc are very encouraging," said Thomas Cook joint chief executive Manny Fontenla-Novoa.

The travel company revealed its UK pro forma operating profit before exceptional items had increased by €32.3 million (£23 million) year-on-year.

It said although trading for much of the 12-month period did not fully meet company expectations, reductions in overhead costs and a strong end to the season had offset the weaker-than-anticipated performance.

Early indications for the summer season of 2008 are also good within the UK, the company confirmed.

However Thomas Cook reported a €7.8 million (£5.6 million) year-on-year fall in pro forma operating profit for its North American business.

The travel group said the drop reflected a difficult trading environment and "significant overcapacity in the market", particularly in the peak winter season.

Thomas Cook intends to pay its shareholders a dividend of 5p a share for the year.

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