Thomas Cook confident on turnaround

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HOLIDAY operator Thomas Cook said a £45m sale helped it reach a target for disposals ahead of schedule as it reported a narrowing seasonal loss.

The company also said that summer bookings were developing in line with its expectations. Bookings for summer holidays are a closely-watched metric as they generate the bulk of the firm’s earnings.

The tour operator is half-way into a three-year cost-cutting plan to turn the company around by slashing jobs, shutting branches and selling parts of its business.

The agreed sale of Gold Medal, a distributor of scheduled flights, hotels and car hire, to a unit of the Emirates Group for £45m, brought disposal proceeds to £125m, the company said.

It had set a target for earning between £100m and £150m from divestments by the end of 2015.

The world’s oldest travel group posted an underlying operating loss of £56m in the three months to the end of December, a 15 per cent improvement on the corresponding year earlier period.

“Our first quarter results, new product revenue growth, web integration, cost out and profit improvement programmes ... give us confidence of achieving our targets and delivering even more value in the years to come,” chief executive Harriet Green said in a statement.

Thomas Cook announced plans last November to cut costs by £440m by 2015 - 10 per cent more than previously expected - and to deliver a further £440m of savings by 2018, partially through a move to sell more holidays online.

Ms Green joined less than two years ago, after the company was brought to its knees in 2011 from the combined impact of the euro zone debt crisis, high fuel costs and political turmoil in holiday destinations Egypt and Tunisia.

Shares in Thomas Cook have more than doubled over the last year.