BELEAGUERED travel firm Thomas Cook racked up £300m of losses after admitting that it came close to collapse last year.
The 170-year-old company said that the negative publicity it suffered after it went to its banks for an additional £200m of loans to secure its future had weakened sentiment.
But it said efforts to stabilise the business were bearing fruit as various turnaround initiatives will now boost UK profits by £140m over the next three years, £30m more than previously thought.
Underlying pre-tax losses rose by 41% to £328.3m in the seasonally quieter six months to the end of March, although these had been signalled in a recent circular to shareholders.
The widening losses reflected difficult conditions in all its markets, particularly in France where bookings to the Middle East and North Africa were hit by the Arab uprisings.
But the group said it was pleased that summer bookings in the UK were only 1% down on the previous year – boosted by Olympics packages – although margins were under pressure.
Chief executive Sam Weihagen said a recent £1.4bn deal with lenders to extend the maturity of its loans to 2015, the sale of its Indian business and the sale and leaseback of some of its aircraft provided evidence of its turnaround.
He said: “From this platform, we can re-energise our business and begin to rebuild profitability, reduce debt and continue to provide a fantastic holiday experience for our customers.”
The group recently appointed Harriet Green, the boss of electro-components distributor Premier Farnell, as its new chief executive.
James Hollins, an analyst at Investec, said he was confident of the group’s survival and has maintained his buy rating on the stock.
The group’s UK turnaround plans have seen it focus more on independent and exclusive holidays and remove 500 under-performing mainstream hotels – about 22% of its properties – from its summer programme.
This trend was evident in its summer bookings, which saw a 10% rise in specialist and independent holidays, boosted by strong demand for Olympics packages.