UK: Thomas Cook cuts first half loss as booking trends improve

Thomas Cook has reduced its loss for the traditionally quieter first half of its financial year

Thomas Cook has reduced its loss for the traditionally quieter first half of its financial year - Credit: PA

Thomas Cook took another step towards calmer waters today by announcing a £425million fundraising with shareholders in a bid to cut debt.

The move, which is part of a wider £1.6billion refinancing plan, came as the tour operator reported encouraging trading for the summer season, including a 10% reduction in the number of holidays left to sell compared with last year.

Under new chief executive Harriet Green, Thomas Cook also said it cut losses to £275.6m for the seasonally quieter half year to March 31.

She said progress made over the last year in restructuring the business had enabled it to carry out the refinancing, which will include a deeply-discounted rights issue raising around £305 million.

The UK’s second largest holiday operator, which staved off collapse a year ago following a rescue deal with lenders, recently unveiled a strategy based on offering “trusted and personal” holiday experiences and more city breaks.

It is also cutting costs by £170m in this financial year, an increase today of about £25m on previous forecasts.

Ms Green said the refinancing will reduce the company’s “very significant debt”, lengthen its repayment profile and help it deliver its recovery plan.

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She added: “We look forward to continuing the rapid transformation of the group so that we fulfil the potential of the Thomas Cook brand for our customers, suppliers and employees.”

Thomas Cook said it had sold around 60% of its holidays for the summer season, an increase of 2% on a year earlier.