The Week Ahead: Figures due from Thomas Cook, the AA and AG Barr

A Thomas Cook Airlines Airbus A321 aircraft at Stansted Airport.

A Thomas Cook Airlines Airbus A321 aircraft at Stansted Airport. - Credit: Archant

Britons booking sunshine breaks to escape from a rain-soaked end to the summer look set to provide a boost to Thomas Cook when it delivers a trading update this week while the City will also digest figures from the AA motoring organisation and drinks maker AG Barr.

Travel operator Thomas Cook is expected to have benefited from holidaymakers getting away from the UK’s wet August weather when it posts an update on Thursday.

Brokers at Numis said trading in the UK’s core travel market was strong, adding that they expect Thomas Cook to report a robust late market surge.

Budget airlines easyJet and Ryanair have already reported an uplift in passengers in last month as holidaymakers took advantage of the strong pound and to escape unseasonal UK weather.

In July, Thomas Cook warned of a £39million earnings hit from the combined impact of the terrorist atrocity in Tunisia, the Greek debt crisis and the weakening of the euro.

The attack in June which claimed the lives of 38 holidaymakers including 30 UK nationals is expected to have a £20m impact on the company’s full-year results with a further effect possible next year.

Thomas Cook said this took into account the impact of cancelled trips, rearranging the summer flying programme to alternative destinations and the cost of repatriating customers to the UK. Thomas Cook evacuated more than 15,000 guests on around 60 flights in the wake of the murders in Tunisia.

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The Greece crisis will have a £5m impact in the current year as the firm had to ramp up price reductions on late bookings amid fears of problems the debt-laden country could face as it came to the brink of collapse before reaching agreement with creditors.

Meanwhile, the strength of the pound against the euro and the Swedish krona was expected to have a £39m impact on full-year results, up from the £25m previously expected.

The update came as Thomas Cook also reported an improved performance in the three months to the end of June, as the firm pushes ahead with its recovery plan of cutting costs and selling higher value holidays. Pre-tax losses nearly halved from £81 million to £44 million.

The AA is expected to reveal a further decline in profits as the motoring organisation continues to shed personal members, although business customer numbers are growing, when it reports half-year results on Tuesday.

Analysts at Morgan Stanley forecast that it will slip to a pre-tax loss of £34m, weighed down by the cost of servicing its debts, compared to a profit of £10m the year before.

The group’s underlying performance is also expected to be lower. It said in a trading update for the three months to the end of April that roadside personal member numbers had fallen to 3.74m, 5.2% down on the same period a year before. Meanwhile the number of business customers had risen by 16.6% to 9.85 million compared to the previous year.

Experts at Morgan Stanley said they expected a continuation of the trend of falling personal membership and more business customers for the second quarter. They see underlying earnings for the first half down 2.5% at £207m on revenues 0.7% lower at £488m.

Irn-Bru maker AG Barr is expected to post a fall in profits when it posts half-year results on Tuesday.The firm said in a trading update in the summer that poor weather had dampened trading. It said it sales for the six months to July 25 were expected to be 5% lower than the prior year at around £128 million. Stripping out the impact of losing the Orangina brand and Finlays water, it saw a decline of 3.5%.

Numis analyst Charles Pick is expecting a 7% fall in pre-tax profits to £17.6m, but noted that the company expected the financial performance in the current year to be weighted towards the second half. He said it was “one to reappraise post the H1 results”.

Barr said it in its latest update that trading in the first half had “remained subdued as anticipated” though it hoped to regain momentum enabling it to meet expectations for the full year.

The company, which also makes Tizer and Rubicon, said its performance compared to a period last year when it was buoyed by its sponsorship of the Commonwealth Games in Glasgow.

It said this “along with poor weather, particularly in the north of the UK”, had hit sales while a switch-over in IT systems had produced “short term customer service challenges which have also impacted our overall revenue performance”.

Barr said it had also faced “ongoing deflation across the soft drinks market and continued high levels of price promotion”.

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