RNS Number : 8816Z
Thomas Cook Group PLC
13 March 2013
13th March 2013
Thomas Cook Group plc
NEW GROWTH STRATEGY AND UPDATED PROFIT IMPROVEMENT PLANS
The Thomas Cook Group plc today announces its new profitable growth strategy, focused on simplification, web innovation, flexible new products and services, enabled by rigorous execution and an integrated IT platform. Building on its trusted brand and 171 year heritage Thomas Cook will deliver personalised holiday experiences through a high-tech, high-touch approach.
Financial Highlights
· Business Transformation gaining momentum. A further £50m of cost-out actions identified bringing the total profit improvement actions so far to £350m with more to come.
· Significant progress achieved in embedding improved working capital management practices contributing to c£150m improvement in average working capital.
· UK Turnaround on track; thorough UK restructuring underway to re-shape the organisation to meet customer need with a target to deliver UK EBIT margin in excess of 5% by FY15.
· Northern and Central Europe continue to build on their industry leading positions.
· Executing on one Group-wide Airline Segment, improving costs, quality, reliability and customer experience to build a stronger business.
· Transformed approach to hotel purchasing to utilise Group scale, already delivering tangible benefits.
· Non-core disposal programme underway with the opportunity to realise gross proceeds of £100- £150m.
Strategic Highlights
· A Strategy of simplification, focused on delivering trusted, personalised holiday experiences delivered through a high-tech, high-touch approach.
· New strategy has been based upon extensive research and analysis including a comprehensive, in-depth survey measuring the attitudes and changing needs of almost 18,000 travellers, validated against the experiences of many of Thomas Cook's own customers.
· Clear metrics developed to measure and report on progress, with the following measures established:
FY15 Targets
o New product revenue > £500m
o Increase Group web penetration to > 50%
o Cost Out/profit improvement of £350m
FY15 KPI's
o Sales increasing at CAGR > 3.5%
o Underlying Gross margin improvement >1.5%
o UK EBIT margin >5%
o Cash Conversion of >60%
· The strategy will deliver on-going product and service innovation through four major initiatives:
o Expand our successful, proven international hotel concepts across our markets
o Creating a new portfolio of flexible, trusted, products and services
o Creating a single, consistent, omni-channel gateway for customers to access personal recommendations from our extensive range of products and services
o All underpinned by the powerful Thomas Cook brand and an integrated IT platform
Outlook
Following the positive trends outlined in the Q1 IMS trading continues to be robust and summer trading is progressing well with improved margins. The outlook for the full year continues to be encouraging, underpinned by the on-going delivery of the Group's Transformation actions.-
Harriet Green, Group CEO Thomas Cook Group plc said:
"Our Business Transformation plans are ahead of schedule and already delivering substantially improved performance, which resulted in our recent return to the FTSE 250. We have exceeded our initial commitments and today announced a further £50m of cost out actions, bringing the total profit improvement actions identified already to £350m, £290m of which is still to come Stabilising the business has been our priority through addressing our cost and cash challenges, and strengthening the leadership team to create a more effective, aligned organisation focused on rigorous execution.
We are excited to now reveal our new strategy based on four cornerstone principles; delighting customers with trusted, personalised holiday experiences through a high tech, high touch approach. Based on comprehensive consumer research we aspire to occupy a unique position in the market through our new strategy, deliver industry leading margins and customer loyalty, whilst maintaining consistent quality that can be trusted. We will expand our already successful hotel concepts; and build a new portfolio of flexible, trusted products and services; creating a single gateway for customers to access personalised recommendations, specifically tailored to meet their needs.
The operational credibility of this strategy rests on the success of our self -help measures to date, our trusted brand and the clear targets and KPI's against which we are ready to be judged. We have real options now, with the prospect of delivering improved revenues, strengthened gross margin, better cash flow and disposal opportunities, to build a strong and exciting future for the Thomas Cook Group, worthy of our customers and our heritage"
***
The Group is holding a Capital Market's Morning today, March 13th, during which this information will be discussed with investors and analysts. A video of the presentations will be posted on the newly launched Group website later. www.thomascookgroup.com
Enquiries:
Andrew Lorenz, FTI Consulting +44(0)7775 641807
+44(0)207 269 7291
Jenny Peters, Thomas Cook Group +44 (0)7568 105144 |
Thread abonnieren
