Thomas Cook share price: Travel group offloads ancillary products unit

on Dec 12, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Thursday, December 12: Thomas Cook Group (LON:TCG) announced yesterday that it has sold its UK ancillary travel products business, Essential Travel, to Holiday Extras Group for £2.1 million.

The sale forms part of the tour operator’s strategy to simplify brands and focus on core assets.
The announcement also revealed that Thomas Cook has entered into a commercial agreement with Holiday Extras to be its exclusive distributor of certain ancillary travel products for its UK business. This will enable it to continue to offer its customers services, such as airport and cruise terminal parking, airport hotels and lounges and travel insurance.

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The deal, subject to regulatory approval, will result in a loss on disposal of £15 million, principally arising from goodwill recognised at the time of the unit’s acquisition in March 2010.
**Latest asset sale**
The disposal of Essential Travel is the latest in a string of asset sales, in an effort to turn around the company by exiting low-value businesses and paying down debt that was taken on before the economic downturn.

In recent weeks, the travel operator has sold its business in Egypt and Lebanon (Thomas Cook share price falls on sale of some Middle East operations), its UK corporate foreign exchange business (Thomas Cook share price: Company offloads foreign exchange arm) and its specialist activity tour operator Neilson Active Holiday (Thomas Cook share price: Holiday company sells specialist tour operator). Thomas Cook is also exiting its UK escorted tours business and selling most of its shareholding in UK air-traffic controller NATS Holdings (Thomas Cook share price: Travel group nets £38mn for UK air traffic controller stake).

Last month, the travel group reported a narrower fiscal 2013 pre-tax loss of £158.1 million from a loss of £336.8 million last year and increased its cost-saving and new revenue-growth targets (Thomas Cook share price soars as profit rises 49 percent).
Thomas Cook CEO Harriet Green said in the company’s statement yesterday: “Further to our recent results announcement, I am pleased to report yet more progress as we deliver the rapid transformation of Thomas Cook.” He added: “The sale of Essential Travel builds on our previously announced strategy of simplifying our brands and applying an intense business focus on our core assets to deliver sustained profitable growth.”

**Thomas Cook share price on the up**
After falling in yesterday’s afternoon session, shares in Thomas Cook closed 0.12 percent higher, extending the stock’s one-month gain to 16.82 percent.
According to AnalystRatingsNetwork data, two research analysts have a ‘sell’ rating for the travel firm’s shares, eight have a ‘hold’ rating and 12 have a ‘buy’ rating. The stock’s average rating is ‘hold’ with a consensus price target of 161.97p.
**As of 08:15 UTC buy Thomas Cook shares at 170.20p.**
**As of 08:15 UTC sell Thomas Cook shares at 170.00p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
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