Financial Trading Blog

Stock of the day 25/11/2014 – Thomas Cook Group



Sun, sea, sand, skiing, snow; nowadays the holiday possibilities are endless. Thomas Cook will be hoping to capitalise on this fact as it announces its full year 2013/2014 earnings release on Wednesday.


Since coming close to collapse in 2011, Thomas Cook has slowly been clawing its way back to the top. And the year started strongly, hitting its 2014 peak of 189.55 very early on in mid-January. However, Thomas Cook shares suffered a great drop in May following its half-year earnings release; with this report Thomas Cook announced an operating loss of £187 million. Despite this figure being a 6% improvement on the previous year’s number, Thomas Cook’s share price fell from 181.65 on May 14th to 151.35 on May 19th, with a 12% fall on May 15th, the day of the release.

This decline slowly continued until August, which saw a reversal of fortunes and a second-half high of 140.95 in early September. However, the country-wide malaise felt by stocks on the FTSE in mid-October did not leave Thomas Cook unscathed. At its lowest point in this period, share prices hit 99.35, just over half of its 2014 high from January. Since then there has been a consistent rise since that mid-October low, and Thomas Cook entered the week of its full year report at a 136.5 close on Monday, opening Tuesday slightly lower at 135.45, spending much of the day hovering between 135 and 137.

Looking ahead to Wednesday’s release, Thomas Cook is set to provide stronger figures than May, with forecasts predicting an announcement of profits around £323 million. This is 23% higher than the same point last year as the holiday company continues to try and cut costs to reduce its deficit. Despite warm autumn weather potentially reducing the number of bookings by British holidaymakers, the company should be boosted by the traditionally stronger second-half period for the holiday sector, as the summer months provide the bulk of its revenue.

The company is also taking steps to bring holiday-booking into the future, by expanding its ‘showcase experiences’, where customers are allowed to digitally experience their holiday before purchasing it by using a head-mounted virtual reality technology. Whether this technological leap will have much impact on business is up for debate; regardless, Thomas Cook will be searching for some sunny figures on its road to recovery tomorrow.

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