Thomas Cook plans to sell 77 pct stake in India unit
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Struggling holiday firm Thomas Cook said it was holding on to market share in Britain, dismissing claims by TUI Travel that it had benefited from negative publicity around its arch rival's financial difficulties.
The world's oldest travel firm said its first quarter loss widened to 91 million pounds from 37 million a year ago, in line with expectations and reflecting economic woes across Europe and political upheaval in the Middle East and North Africa.
But it was upbeat about recent trading in its home market following a sales slump in November when customers were spooked by the company twice seeking rescue from its banks.
"I have been encouraged by how our bookings have developed, particularly in the UK where our market share for both the winter and summer seasons remains broadly stable," acting chief executive Sam Weihagen said in a statement on Wednesday.
Thomas Cook said it had sold 42 percent of summer holidays already and had 13 percent fewer holidays to sell than at this time last year. TUI Travel, which owns Thomson and First Choice, said on Tuesday it had sold 35 percent of its summer holidays.
Weihagen accepted TUI Travel had picked up market share in January, which he attributed to promotions, but said, for summer 2012 as a whole, Thomas Cook was keeping up with its rival.
"January, yes, they took share. Before that, in December we took share. In December we would have been hugely ahead of TUI because they were not doing much activity in the market place. They did a lot of activities in January when we were managing more for margin," he told reporters on a conference call.
Shares in Thomas Cook, which have lost around 90 percent of their value over the past month, were up 5.8 per cent to 13.75 pence at 2.25 pm GMT.
"Thomas Cook has performed more robustly than some might have feared in the UK," said Numis analyst Wyn Ellis.
Peel Hunt analyst Nick Batram said the update 'could have been worse' but was not great.
"The early summer performance in the UK will give some fodder to the bulls. Unfortunately, there are clearly significant trading challenges outside the UK," he said.
INDIAN SALE
Thomas Cook confirmed it planned to sell its 77 per cent stake in Thomas Cook India as it looks to bring down its debt of 890 million pounds.
Shares in Thomas Cook India closed up 20 per cent to Rs 53.85 in Mumbai, valuing Thomas Cook's stake at around $180 million.
Thomas Cook's future has been in question since it warned of a possible debt default last November.
The company has been hit hard by tough trading conditions, especially in Britain, where its core customer base of families with young children has been particularly affected by tough economic conditions. It has also been affected by unrest in popular destinations such as Egypt, Morocco and Tunisia.
Thomas Cook issued three profit warnings last year, culminating in the departure of Chief Executive Manny Fontenla-Novoa in August. Weihagen said it expected to appoint a new chief executive by the end of March.
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