The Week Ahead: Thomas Cook expected to post increased Q1 loss following terror attacks
- Credit: PA
Thomas Cook will update the market on its first quarter trading figures this week as the travel sector looks to recover from a year that saw European terror attacks and political instability in Turkey dent bookings.
City analysts forecast that losses at the travel giant will widen in the three months to the end of December, with the group’s Nordic and German airline operations dragging on its performance.
Jeffrey Harwood, at Stifel, said: “Last year a £49m operating loss was incurred in the first quarter. We expect some increase in the loss this year, reflecting lower profits in Nordics, difficult trading at Condor and adverse currency translation movements.”
Last year Thomas Cook boss Peter Fankhauser bemoaned a “difficult year for tourism” after the group revealed that underlying profits dipped to £308m in the year to September 30, from £310m a year earlier.
Political ruptures in Turkey and the terrorist atrocity in Brussels knocked demand, although it said that moves to shift to alternative destinations helped limit the blows.
You may also want to watch:
Wyn Ellis, analyst at Numis Securities, said: “We remain unenthusiastic about the investment merits of Thomas Cook: we believe that the basic business model continues to face structural challenges.”
Nevertheless, Mr Ellis still expects the travel giant to report an “upbeat” set of results on Thursday amid a backdrop of steady demand and softer comparatives.
- 1 Suffolk school goes viral after teachers post TikTok dance
- 2 Man in hospital with serious injuries after Suffolk stabbing
- 3 Ipswich Town transfer rumour: Blues linked with 'ambitious move' for striker
- 4 Community in shock after stabbing on Suffolk estate
- 5 Former Town star's son scores to help Hartlepool secure dramatic return to EFL
- 6 Pub demolition plans generate 150-plus objections in a week
- 7 No starts, sarcastic cheers and a quick profit - A look back at Kieffer Moore's time at Town
- 8 Patient in 90s will fight Ipswich Hospital parking fine
- 9 Couple launch smoked meat business after impressing at family BBQs
- 10 Councils to be given powers to fine drivers £70
He said: “Underlying trading and demand trends have been quite encouraging. Travel agents in the UK have also reported brisk bookings in recent weeks in a very competitive market in which the tour operators are in a strong relative position.”
Mr Ellis also flagged the closure of the Sharm el-Sheikh beach resort in Egypt last year, which saw Thomas Cook’s figures take a hit in the first three months of 2016.
But Mr Harwood said that “despite Brexit and the weakness of sterling, demand for overseas holidays remains robust” in the UK.
At its results in November, Thomas Cook said it was confident of achieving a result in line with expectations in 2017 and Mr Harwood added that, while it was “still early days”, this week’s update was likely to offer a similar message, with market conditions largely unchanged.