Thomas Cook, the second biggest travel company in Europe, has announced to close 200 of its 1300 British travel agencies, 125 more than announced earlier. The move, caused by disappointing financial results, lifts the job loss to 660. The group also aims to sell 6 of its 41 planes and about 500 hotels in an attempt to reduce the company’s net debt of over 1.3 billion euro.
Exceptional charges sink yearly profits
In general, the financial year that ended on 30 September was not all bad, as revenue rose to from £8.9 billion to £9.8 billion (€10.6 to 11.7 billion) and underlying profit was still £303.6 million (over €360 million). Due to ‘exceptional charges’ however, results before tax went down from a £42 million (just short of €50 million) profit to a loss of £378 million (€475 million). The reported loss after tax was £518 million (€620 million), down from a £3 million profit last year.
The results did not come as a complete surprise, as the group had issued three profit warnings in 2011. The world’s oldest travel agency (founded in 1841 and in Belgian hands until 1948 as part of the mythical Wagons-Lits company) was barely saved from bankruptcy by a £200 million (€240 million) emergency loan from banks last month.