Thursday 22 March 2018

Thomas Cook, facing backlash, flags dividend restart

Young attractive family on beach vacation in Spain on the Costa del Sol on a sunny day
Young attractive family on beach vacation in Spain on the Costa del Sol on a sunny day

Travel firm Thomas Cook, facing a backlash in Britain over its handling of the death in 2006 of two children on one of its holidays, said that dividend payments could resume next year as it stuck to its forecast for full-year growth.

Thomas Cook said on Wednesday that it had signed a new larger debt facility and its confidence in its improving profitability meant it could restart dividend payments in its financial year ending September 2016.

The world's oldest travel group has been in the headlines in its home-market of Britain for reasons other than its recovery from crisis in 2011, when it ditched its dividend as tough trading plus its heavy debt load almost brought it to its knees.

Its shares lost around 3 percent on Monday as some social media users called for a boycott of the company following reports it had received more in compensation over the deaths of the children than their parents.

The company, whose customers are mainly based in Britain, Germany and Scandinavia, later said it would pay the 1.5 million pounds ($2.3 million) it had received from the local hotel operator in Greece to charity.

An inquest in Britain last week returned a verdict of unlawful killing in the case of Christi and Bobby Shepherd who died from carbon monoxide poisoning while on a Thomas Cook holiday in Greece.

For the six months ended March 31, Thomas Cook reported an underlying operating loss of 173 million pounds ($268 million), narrowing a seasonal loss when fewer customers holiday from 187 million pounds in the same period last year.

The company repeated guidance provided last November that on a constant currency basis it expected growth in full-year earnings.

Bookings for summer holidays were encouraging, the company said, adding that demand for holidays in Britain and flights in Germany were offsetting tough trading conditions in other parts of its German business.


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