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Thomas Cook full-year beats view

Source: Reuters - Mon 30th Nov 2009

Tour operator Thomas Cook said it was confident of meeting expectations for 2010 as summer bookings remained resilient despite rising unemployment and pressures on consumer spending, sending its shares higher.

Europe's second-biggest tour operator reported an underlying pretax profit for the year to end-September of 308.2 million pounds, down 0.4 percent but ahead of the consensus market forecast of 299 million according to a survey of 19 analysts provided by the company.

Chief Executive Manny Fontenla-Novoa said the group had delivered a strong performance in the face of a worldwide recession and the financial impact of the H1N1 Swine Flu outbreak.

While customers were tending to book later than usual, winter 2009/10 trading had continued to improve while bookings for summer 2010 were in line with expectations.

"Recent customer research shows that UK consumers remain intent on taking their holidays abroad next summer and we continue to see strong growth in bookings to medium-haul destinations such as Turkey and Egypt" said Fontenla-Novoa.

Thomas Cook and rival TUI Travel have reduced the number of holidays they sell by more than a quarter in the last two years, enabling them to increase their average selling prices and avoid having to offer heavy discounts at the last minute to fill empty slots.

This has helped them to continue to increase their profits throughout the recession while smaller operators have struggled to stay afloat. Britain's third-biggest travel firm, XL Leisure, fell into administration last year.

Shares in Thomas Cook, which have outperformed the FTSE All Shares Leisure & Travel Index by 10 percent over the last twelve months, were up 2.6 percent to 221.9 pence at 8:37 a.m.. Shares in TUI Travel, which reports full-year results on Tuesday, was up 2.5 percent to 249.8 pence.

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