Thomas Cook says trading improves after tough year

The 171-year-old firm has been hit by tough trading brought on by an economic downturn, high fuel costs and social unrest in popular destinations, and has had to negotiate banking lifelines and make disposals to raise cash and reduce debt.

Underlying operating profit for the year to September 30 fell 49 per cent to £156m, down from £304m a year ago but in line with consensus according to a Reuters poll of 15 analysts.

“These results reflect the major issues that Thomas Cook faced last year, but they mask the material improvement that we made in the fourth quarter,” chief executive Harriet Green said.

“Our brand has demonstrated its strength by recovering all the ground lost during last year’s difficulties.”

The group, which will set out its full turnaround plan in the spring next year, said its fourth quarter had shown strong improvements and that 2012/13 winter bookings were ahead of committed capacity in all markets at improved prices.

Including goodwill, write down payments and restructuring costs the firm made a statutory pretax loss of £485m. Net debt fell £103m to £788m.

Formerly the head of Leeds-based electronic parts distributor Premier Farnell, Ms Green took over at Thomas Cook in July as part of a shake-up at the firm. She is due to outline a detailed turnaround plan in the spring but said last August technology would be the salvation of the struggling firm.