Decent FY16/17 despite a notable decrease in UK gross margin
Thomas Cook held a conference call yesterday to discuss its FY16/17 results and its crucial summer season. This year’s like-for-like revenues returned to growth with an increase of 9% to £9.0bn, supported higher volumes in all major destinations (Greece, Spain…). That said, gross margin highlighted question marks concerning the company’s performance as, despite its 3% growth in absolute terms on a like-for-like basis, margin lost 130bps to 22.1%. Most of the effect unsurprisingly comes from the UK tour operator business, given a mix of high bed costs in very popular Spain (42% of revenues this summer), currency impacts, and exceptionally numerous apparently false illness claims.
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