Thomas Cook Regulatory News (TCG)

31 Aug 2007 07:04

Thomas Cook Group PLC31 August 2007 31 August 2007 Thomas Cook Group plc Interim Management Statement Thomas Cook Group plc is today publishing its first Interim ManagementStatement. Current Trading and Outlook The Board believes that, overall, the Group's financial performance for the fullyear 2007 will be in line with its expectations. While the recovery in the UKin summer 2007 has not been as strong as we had expected, we anticipate thatNorthern Europe and Airlines Germany will exceed our expectations. In the UK, as previously reported, we have reduced capacity year on year forsummer 07 by 5%. Cumulative bookings are currently tracking in line with thisreduced capacity and average selling prices are 1% up year on year. While wecontinue to see an improvement in trading compared to summer 2006, we have notbeen able to fully recover the increased cost of fuel by charging higher prices. In addition, our customers are having to pay approximately €60m of additionalAir Passenger Duty, which has acted as a brake on prices. In Northern Europe, cumulative bookings for summer 07 are currently 2% ahead ofthe prior year on similar capacity and average selling prices are 4% up year onyear. When combined with the winter performance reported in June, we expect theNorthern Europe division to deliver an excellent result for the full year. In Continental Europe, bookings for summer 07 are currently 6% behind the prioryear with average selling prices 2% ahead. As anticipated, trading conditionsin our largest market, Germany, remain challenging, but we have taken stepsthroughout the season to reduce capacity and mitigate the impact. We are verypleased with the performance in our Western European markets (Belgium, Hollandand France). In Belgium, the largest of the Western markets, cumulativebookings are currently 7% ahead of the prior year and average selling prices are1% ahead. Summer represents the low season in North America. Cumulative bookings forsummer 07 are currently 32% behind the prior year. This is broadly in line withthe reduced capacity. Average selling prices are 11% up year on year. In Airlines Germany, the booked seat load factor for summer 07 has increasedagainst the prior year by 1% for short and medium haul and by 4% for long haul.The cumulative yield is also currently 9% higher than the prior year. Thisreflects a strong performance in long haul and management's focus on profitableroutes and strict cost control. Integration and synergy update The programme to integrate the former Thomas Cook and MyTravel businesses hascontinued to make excellent progress in the two months since our interimresults. We are increasingly confident that the synergies achieved will exceedthe €140m predicted in the Prospectus for the merger. Since the completion of the merger on 19 June 2007 we have passed a number ofkey milestones: • Appointment of senior managers in the new Group and UK & Irelanddivision management structures. • UK fleet rationalisation and capacity planning for the Winter 2007/08and Summer 2008 seasons. This is vital for the combination of the Group's two UKairlines, which is expected to be the largest single source of synergy benefits. • Detailed plans for proposed office closures and the relocation of allprincipal operating functions by the end of 2007. • Put in place plans to migrate to a single UK charter tour operatingreservations system by November 2007. Management continues to seek further synergy opportunities as plans areimplemented. Czech acquisition On 1 August 2007, the Group completed the acquisition of Travel Plus, for €3.1m,as the basis for establishing a new tour operator business in the CzechRepublic, which is a promising market with good economic growth. Thisacquisition was financed from the company's own resources. Travel Plus is aleading travel agent with seven shops located in major cities throughout theCzech Republic, and tour operating subsidiaries Dusek Tours and All-roundService. Hurricane Dean Hurricane Dean struck the Lower Antilles, South Jamaica and Mexico between 17and 21 August 2007. The Group had a total of approximately 7,000 customers inthe affected areas at the time the hurricane struck and our normal incidentsupport procedures were activated as soon as the threat of the Hurricane becameknown. Where necessary, rescue flights were deployed to remove customers fromthe resorts most at danger. In addition, a number of flights were cancelled ordelayed during this time. Where cancellations and delays occurred, customerswere given the opportunity to book alternatives. We are pleased to report that no customers or staff were injured in thehurricane and that all flights and our resort operations in the affected areashave now returned to normal. Our immediate and professional response to theincident again demonstrates our commitment to customers and highlights yet againthe benefit of booking a holiday through a tour operator rather thanindependently. We do not expect the financial impact of Hurricane Dean to be material to theGroup's results. Future Seasons Trading In the UK, capacity on sale for winter 07/08 is expected to be approximately 5%below the prior year as we exit unprofitable programmes and thus enhance yields. Currently, cumulative bookings are encouraging at 2% ahead of the prior year,and in the last four weeks bookings are 9% ahead of the prior year. As a result,we have already sold 26% of our current capacity on sale, which is 3% more thanhad been sold at the same time last year. Average selling prices are 1% downyear on year. The summer season 2008 in the UK has recently been launched and earlyindications are good, with customers booking early to ensure they get theholiday of their choice. As with winter 07/08, we are currently reviewing thecombined programme with regards capacity planning, exiting unprofitableprogrammes and optimising yield management. In Northern Europe, bookings for winter 07/08 have started very strongly, beingcumulatively 14% up on the prior year on 6% more capacity. We have sold 36% ofour capacity to date which is 2% more than had been sold at the same time lastyear. Average selling prices are also 6% ahead year on year. Brochures in Continental Europe for winter 07/08 have not yet been launched inall markets. However, in Germany and Belgium, where brochures have recentlybeen launched, early bookings indications are encouraging. Brochures for the winter 07/08 season in North America have only recently beenlaunched and cumulative bookings are currently behind the prior year. However,in the last four weeks, bookings have been tracking significantly ahead of theprior year. Cumulative average selling prices are also 8% ahead. The booked seat load factor in Airlines Germany is currently 4% ahead of theprior year for short and medium haul and 3% ahead for long haul. Arcandor (formerly KarstadtQuelle) Reporting Arcandor, our majority shareholder, is today issuing its half year report to theGerman market in line with German regulatory requirements. This report containsfinancial information relating to Thomas Cook Group plc. However, the segmentalfinancial information relating to Thomas Cook Group plc is not directlycomparable to the information that Thomas Cook Group plc would have reported forthe period to 30 June for a number of reasons. In particular, Arcandor'ssegmental financial information reflects the impact of that Group's changes inownership of Thomas Cook AG throughout the current period. The information alsoincludes adjustments to eliminate accounting policy differences between the twogroups. Enquiries:Thomas Cook Group plc Today +44 (0) 20 7404 5959 Thereafter +44 (0) 1706 746464Manny Fontenla Novoa Joint Chief ExecutiveLudger Heuberg Chief Financial OfficerSteven Olivant Investor Relations & Financial Communications Director Brunswick +44 (0) 20 7404 5959Fiona AntcliffeConor McClafferty A conference call for analysts will take place today at 8.30am (BST). Thedial-in arrangements for the call are as follows: Telephone: +44 (0) 1452 541 077Participant Code: 15280632 A recording of the conference call will be available until 14 September 2007 on: Telephone: +44 (0) 1452 550 000Access Code: 15280632# This information is provided by RNS The company news service from the London Stock Exchange