New chief executive Harriet Green outlines first £100m of cost cuts identified with more to come
Travel agency Thomas Cook has reported a statutory loss of £590 million for the year to September 30.
The company's new chief executive, Harriet Green, described the loss as “unacceptable” and promised another £100 million of cost cutting measures over the next three years.
Thomas Cook announced plans in October to cut 430 jobs at its UK airline business which cut its aircraft fleet to 35 as part of a wider restructuring.
Green said the “look of Thomas Cook going forward will be different”.
She added: “Thomas Cook, in my opinion, is not broken. It is viable and working and we have turned a corner.”
The company has so far offloaded 149 travel shops in the past year and sold five administrative offices.
Green is expected to announce wider restructuring plans for the company in the spring.
Thomas Cook posted a pre-tax loss for the year of £485.3 million, with losses up 22 per cent on last year's £398.2 million pre-tax loss, with the bulk of losses in the past two years coming from write-downs.
Revenues were down three per cent on last year to £9.5 billion, though the firm said the last quarter of the year was a “major improvement” on the previous year.
The company was rescued by its lenders with a £200 million bail out earlier in the year after amassing debts of £890 million and issuing a number of profit warnings.
A further £1.2 billion refinancing deal with 17 different lenders, announced in May, included a £14 million fee to be paid to the lenders.
The lenders also have an option to acquire a 10 per cent stake in the 170-year-old company before May 2015 priced at a 62 per cent discount at the time the deal was struck.
Thomas Cook also agreed excess cash of over £250 million generated by the business would go towards paying off its loans, and if the company fails to pay back at least £100 million of its debts at agreed 'cash sweeps' in March 2013 and 2014, it will face a two per cent penalty on its outstanding debts.
The current loan facility runs until May 31, 2015.
Thomas Cook said today it had cut its net debt by more than £100 million in the financial year, from £891 million to £788 million.
The company's current market capitalisation, based on the current share price, is £225 million.