Member Info for MrMaggoo

It really is a basket case. Like i said originally poor product, poor selling strategy, poor marketing, poor pricing, poor strategic leadership, poor cost control. Basically it's poor!

Sounds like there are loads of disparate parts of the business all doing silly little deals that won't deliver any value. Why can't they just focus on fixing their core business before doing that? It's really basic stuff that they would teach a kid in GCSE Business Studies.

This looks like a shrewd move with hindsight doesn't it....

https://www.reuters.com/article/us-thomas-cook-m-a-fosun-comment-idUSKBN0M20Q820150306

Ultimately the taxpayer via RBS - unofficially Cameron pulled strings at RBS to get the cash as he didnt want another big loss back when they were folding...

CFO is considering how many different excuses he can use to call a cost exceptional. What he should be considering is how many overheads can he shelve which don't cost him a load in cash to get rid of...

Trouble is, for example closing shops, isnt great for cash. Redundancies, dilapidations, buying out leases plus lost sales... you can't just take an axe to it.

this is why the strategy of the past 10 years have led to this... like i say, it's Debenhams not Jet2

Someone at The Times has got some shares! It is pretty volatile but I would say it's going to struggle to recover in the near term from this - if you look back it was only really when Harriet came in that it turned. Current CEO has been in the wings a while and has always been pretty useless so he isn't that character to instill confidence. I mean, going on in the press about the hot weather is just embarrassing. Easyjet, TUI, Ryanair etc etc all seemed to cope fine with it.

I see your point but look at it this way - they take the majority of their bookings in GBP and then pay the bill 6 months later in Euros/ AN Other currency. If FX crashes in March how will that one work out? You can hedge to a point but not that much.

Also agree it isn't top of their problems. The cashflow is the massive one for me - it nearly got them before and could easily again. At this time of year they are losing tens of millions per month as the costs are way over the revenue. The aim is to borrow to sustain that til summer when all of the sales are made - that's why they file in September as it is the best cash position. So if -£300m is the best position, think how it will be by the end of December. Sure they have the covenants to cover this off this year - but another 12 months with a worse than required cash inflow in summer could spell serious problems by this time next year.

For this reason I also don't like the Airline sale idea - flights are always paid up front so it will worsen the cash flow position. Although having said that, the one off inflow from the sale will help short term. If that sale happens I would hold out very little hope of the remainder of the business holding on for many more years long term however....

No problem, there seem to be a number of people completely in the dark on here so thought it might help.

A few of other observations:

1. The Times article on exceptionals being over is missing the point. They are using a Travel Industry accounting rule on restructuring to allow them to do this. If you do your research you will see that this exceptionals figure has been high in the stat accounts for 10 years plus - the figure includes all sorts of things that would be considered as operating costs in most other industries. I see no reason why this will suddenly stop now. In fact, of the £30m additional profit warning on Tuesday, £14m was because the auditors have finally put their foot down and told them that something isn't exceptional. What you will probably see is that if exceptionals fall, op expenses will wise.

2. "Brexit wont have an effect" - no deal brexit could easily finish it off. FX rate crash, uncertainty on borders, uncertainty on jobs in UK = crash in bookings for travel industry. Clearly a problem for all but a bigger problem when you have a huge cost base to cover. Obviously a deal and smooth exit could see the opposite with more optimism - but do you really want to hold a share based on that outcome?

3. Investors need to look at this less as a travel business and more as a retailer. Which businesses are failing in the high street? Those with too much reliance on in store sales. Once customers move online you are in a different competitive world and TC is miles off the competition. IMHO this business is closer to Debenhams than it is to Jet2 regardless of what they sell.

I used to work there and have seen this from the inside - it's a dinosaur and has been for years and years. The writing was on the wall in recent years when Harriet was pushed out by the Germans - they think they know what they are doing but are clueless.... Reasons it will ultimately not recover long term:

1. Too many shops - doing deals with Co-op etc. Every year the customers using shops are literally dying - how many people these days aren't savvy enough to shop around? It's old people only basically. So their main channel with huge overheads is losing money in hundreds of shops. Needs a cull of 50% but they can't replace the scale using internet based sales so the business would ultimately fail if they did that so they will trundle along selling holidays but making smaller losses to cover other overheads.

2. Confused product - competing with Jet2 and Tui but nearly always more expensive because they went for margin and reduced capacity. Your central overheads are still the same in this scenario - the others realise it's a volume play not a margin one. Buying own hotels was a stupid move if you can't fill them. TC tour operator clearly run by idiots.

3. Marketing is appalling - trying to be clever or create a premium or unique brand. Silly adverts with kids pratting about in pools dressed as sharks. Is that what customers want or expect from TC? Will they pay premium margins? No of course not. Marketing clearly run by idiots.

4. Cost control is non existent. Small margin business = tight cost control required. Too many different brands and teams making very similar decisions and making very little impact overall. The shift in cash position of £300m+ is probably the most worrying stat of the lot. So if that continues will it be -£800m by next year. The business is basically insolvent.

5. "Exceptionals" has been masking true performance for years. 2017 "we made £300m Op income" (or thereabouts) was really £12m Profit if you take off all of these costs. They have been using exceptionals to hide away the cost of empty retail units etc for years by taking them out of Op Income. It''s all a lie and demonstrates where auditors fail shareholders in daring to question their employers.

Anyway, just my opinions for what they are worth. I don't hold any shares (last time I did they were £1.80) and don't intend to. Only short term gains to be had here for now - can't see how they will turn this around in the backdrop of brexit in 2019, they are not geared for lower revenues as cost bases are way too high.