Thomas Cook Group's FY pretax profit slips

Thomas Cook Group has posted a lower FY pretax profit of £42m, down from £50m a year ago. This was on revenue of £7.8bn, broadly unchanged on the year.

Interim dividend was 0.5p a share, from nil.

CEO Peter Fankhauser was pleased with the company's progress in what he described as a difficult year for tourism.

"The early actions we took to shift our holiday programme into the Western Mediterranean and long haul, together with the benefits of a stronger Euro, helped us to maintain revenue at Group level.

"Additionally, a focus on holidays to our own-brand and partner hotels delivered record profit margins in our UK and Northern European businesses. Underlying operating profit for the group was £308 million.

"This reflects the decline in customer demand for Turkey, which impacted Condor in particular, and the effect on our Belgian business of the Brussels attacks.

"Meanwhile, we've made big strides towards our target to put the customer back at the heart of the business. Our strategy is clear: to deliver sustainable growth by giving our customers great holidays which inspire them to come back to Thomas Cook and recommend us to their family and friends.

"This renewed focus on quality and service delivered a six-point increase in customer satisfaction in Summer 2016 telling us that the changes we're making are having an impact where it matters most.

"Right across our business we're making customers' experience of our holidays better. By focusing on fewer hotels, we can have a bigger influence on quality and service, whether that's a promise to fix any issues within 24 hours or the reassurance of regular checks on health and safety standards.

"We're also building a stronger portfolio of own-brand hotels, with the aim of increasing the proportion that we manage ourselves. This will enable us to offer holidays that are unique to Thomas Cook and to attract a new generation who might have thought a package holiday wasn't for them.

"We're building momentum with 14 new hotels in the pipeline to open in the next two years, including the roll-out of Casa Cook into Kos and Mallorca and a new Ocean Beach Club in Cyprus.

"Our renewed focus on the customer has breathed new energy into the business and I'm proud of the way that our people, in our markets and in resort, have embraced the challenge. It is these efforts to create lifelong advocates for Thomas Cook that will generate greatest value in the future.

"Given the environment, the Board's recommendation to pay a dividend, our first in five years, reflects confidence in the strategy and the opportunity for sustainable, profitable growth.

"We're taking a cautious approach to the year ahead. We've had an encouraging start to bookings for Summer 2017 in our key markets, but it is early days.

"In addition, we are addressing the decline in Condor's profitability with actions that we expect to have a positive impact in the second half of the year. Overall, we are confident that our strategy for profitable growth, focusing on improving our holidays for customers, will help us to achieve a full year operating result in line with current market expectations."