Can Thomas Cook Avoid Post-Holiday Blues?
Spreadex | Nov 16, 2017 11:26
After a truly horrible couple of years, Thomas Cook seems to have got back on track in 2017. It admittedly spent the first half of the year trading fairly laterally, moving between 85p and 95p; however, it rocketed higher over summer, culminating in a 26 month peak of £1.28 in early September. Since then its performance has been a bit more mixed, though it has held onto a decent chunk of its summer growth. Thomas Cook Group PLC now sits at a current trading price of £1.13.
As mentioned the company’s sharp rise began in July, in large part thanks to its third quarter results. Summer bookings were up 11%, with Greece, Cyprus and Bulgaria all seeing substantial volume growth. There was even good news from Turkey and Tunisia; the former saw holidaymakers begin to return to the destination after last year’s military coup had caused demand to drop, while Thomas Cook said they would restart offerings to the latter for the first time since 2015’s terrorist attack. All this helped revenue rocket 14% higher to £2.27 billion, with pre-tax losses more than halving year-on-year to £31 million.
The firm’s most recent update came towards the end of September, and wasn’t quite as rapturously received as the Q3 statement in July. Still, winter 2017/18 booked revenue rose 6%, with a further pick-up in interest in Turkey and North Africa, while it confirmed that full year profit would be in line with expectations.
Alongside this fairly bog-standard September statement came a couple of interesting developments. First was a deal with Expedia (NASDAQ:EXPE), which sees Thomas Cook able to offer its customers access to 60,000 additional hotels, while also ‘significantly’ reducing the cost of running its city breaks and hotel-only business. The other move saw Thomas Cook both buy a 42% stake in German hotel and tour business Aldiana from LMEY, and announce it was creating a joint hotel investment platform with the Swiss group.
In terms of Wednesday’s full year results, alongside decent profit numbers investors will want to see evidence that there has been continued increase in demand for Turkey and North Africa, i.e. the regions that most impacted Thomas Cook’s performance in the last few years.
Thomas Cook Group Plc (LON:TCG) has a consensus rating of ‘Hold’ alongside an average target price of 98.99p.
Get The App
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.