Results out soon in August.

Broker recos look very bullish and why not on a P/E of just over 6 to 2011.....

Thomas Cook Group PLC

FORECASTS 2010 2011
Date Rec Pre-tax (�) EPS (p) DPS (p) Pre-tax (�) EPS (p) DPS (p)

Panmure Gordon
02-08-10 BUY 319.00 27.10 11.30 338.00 28.70 12.40

Exane BNP Paribas
02-08-10 BUY 116.00 26.62 10.75 319.00 28.87 11.66

Numis Securities Ltd
02-08-10 ADD 324.20 27.60 11.25 357.10 29.90 11.81

Oriel Securities
02-08-10 BUY 330.40 28.40 11.40 363.50 31.30 12.10

KBC Peel Hunt Ltd
30-07-10 BUY 301.06 25.22 10.75 313.36 26.23 10.93

WestLB
30-07-10 SELL 28.81 11.52 29.91 11.96

Shore Capital
30-07-10 HOLD 312.00 26.50 11.80 347.00 29.50 13.00

Charles Stanley Securities
15-06-10 HOLD

Evolution Securities Ltd
11-02-10 None

Investec Securities [R]
09-02-10 BUY 327.00 27.30 11.74 352.23 29.39 12.49

Fyshe Horton Finney Ltd
25-01-10 BUY

Collins Stewart
24-12-09 BUY

Nomura Research Institute
25-09-09 RED

2010 2011
Pre-tax (�) EPS (p) DPS (p) Pre-tax (�) EPS (p) DPS (p)

Consensus 316.42 26.98 11.36 342.50 29.39 11.96

1 Month Change 1.07 -0.22 0.01 3.43 -0.14 -0.14
3 Month Change -11.92 -1.09 -0.05 -11.79 -1.00 -0.44


GROWTH
2009 (A) 2010 (E) 2011 (E)

Norm. EPS 2.76% 0.38% 8.92%
DPS 14.03% 10.80% 5.26%

INVESTMENT RATIOS
2009 (A) 2010 (E) 2011 (E)

EBITDA �574.90m �589.69m �613.90m
EBIT �372.50m �420.55m �447.05m
Dividend Yield 5.38% 5.96% 6.27%
Dividend Cover 2.62x 2.38x 2.46x
PER 7.10x 7.07x 6.49x
PEG 2.57f 18.55f 0.73f
Net Asset Value PS -240.80p 224.47p 240.43p

I think this has gone as far as it can go for the present.
pause for breath until further trading statements are published.

Happy to hold for the moment and wait for first week in feb, though sp could then go either way depending on trading statement.

2012 was a good one for small caps stocks, with the FTSE Small Cap index ending the year at 3419, up 25.2% on the year.

The top performer on the year was travel firm Thomas Cook (LON:TCG), back from the brink of bankruptcy and up 224% on the year.

whatt goes up so fast must come down!

It's come down pretty fast from £2 over the last two years transco - no reason it can't go back up again just as fast. The financial press are now sounding very bullish about this company and market sentiment has turned around. I certainly wouldn't be shorting this share right now.

Tuesday 08th January 2013

Financial press warms to Thomas Cook chief

Thomas Cook's new chief executive Harriet Green appears to be winning over the financial press after making her mark on the tour operator.

Green, who joined the troubled company in May and who could receive a pay package worth almost £3 million in her first year, was featured in a positive light in several articles over the New Year.

The Times named Thomas Cook in its 10 shares to follow this year thanks to Green's recovery programme.

It said Thomas Cook was a "straight punt" after going through a "near-death experience".

In a separate article it praised Green for her achievements so far, despite her "surprise" appointment.

"She had no experience in the travel or leisure industries, having spent most of her working life in electronics. But she has already made her mark," said the article.

"Several senior executives have departed and in her first results briefing to the City late last month she indicated that more job cuts were likely, having identified £100 million of annual cost savings in her first 17 weeks in the job.

"It is a moot point whether Harriet Green would attract epithets such as "feisty" and "combative" were she just another grey man in a grey suit. Instead, she is a diminutive mother of two grown-up children with a fondness for yoga and black clothing.

"She sets great store in having a good work-life balance, again not often a stated priority for the average grey-suited male executive."

Meanwhile, the Telegraph said Thomas Cook was over the worse after its "annus horribilis".

"The past 12 months have seen the company slump to a £485.3m loss, lay off 1,250 staff, agree a £1.4bn financing package on pretty punishing terms and part with a number of assets," it said.

"While 2013 is unlikely to be an "annus mirabilis", there is recognition that the tour operator is now over the worst and some parts of the City believe Thomas Cook represents a buying opportunity.

"Green has identified £100m of costs that can be stripped out and more savings are expected early next year, potentially in the form of job cuts, shop closures and a further downsizing of the aircraft fleet. Debt, at £788m, is too high and it is expected Thomas Cook will have to raise £300m to £400m to ease its balance sheet.

"However, even after an equity-raising, analysts believe the shares, which have added 31p over the past 12 months, have potential. Credit Suisse estimates that post a £300m rights issue, Thomas Cook would trade on a multiple of 4.9 times."

The Daily Mail said Green hasherself showed her commitment to the operator by acquiring 500,000 shares at 23p each.


"Other directors piled in too and have so far more-than-doubled their money," it said.

"Chairman Frank Meysman bought 100,000 shares at 24.6p and Peter Fankhauser, chief executive of UK & Continental Europe, 170,000 at 23.25p."

A spokesman for Thomas Cook said it was "nice to see this critical community changing their view on us!".

Lovely, up we go again!

About 10/6 in old money now :-)

Still can't decide whether to jump ship before the results in early feb. Decisions, decisions........

All I can say is every time I go past a Thomas Cook shop the are packed out. I do think the new boss will make sure she can turn it around.

The important element is the trading statement, so hopefully all of these 'full shops' will translate in to an upbeat statement.

Also if you have more than 500 shares and hold them for over 6 months you can get 10% off one of their holiday's.

I have just booked a holiday in one of their 3 (I think) shops in Chelmsford for the first time in years as their in shop prices now match their on line prices. The shop was very busy and according to the sales person, thing have been very busy since new year. Also they had run out of some foreign currencies, which I think is a pretty high margin side business. I intend to hold my shares until the early Feb results and sell out then, H

About 11/- 2d in old money now!

Heading quickly now for the next resistance point on the chart and the shorters diving for cover again. Morgan Stanley target of 60p beginning to look a bit conservative.

probably wrongly, though it is never so, i have banked my profit here at 56.75 ..... it has risen almost in a straight line and must at the very least be due for some consolidation

I think it will probably consolidate upon trading statement 1st wk feb. Am considering banking profit earlier than that but still think there is mileage in the sp yet. Am going to try & squeeze 60p out of it!

Looks to have over ''cooked''

Is it time to book profits in Thomas Cook?

By Darshini Shah | Mon, 14/01/2013 - 10:37

2012 was the year of Thomas Cook Group (TCG); back from the brink of bankruptcy, and ending the year with a share-price rise of more than 270%. But is it time for investors to book their profits?

Holiday demand on the wane

Trading in 2012 benefited from the UK, which accounts for 32% of Thomas Cook's sales, experiencing the wettest summer on record.

But what goes up must come down. Findings from market research agency Explore highlight that 40% of British consumers are expected to spend less on holidays abroad in 2013. And earnings growth is expected to remain muted in the coming year given significant job insecurity and an ongoing need for many companies to limit their costs in a very challenging environment, resulting in low consumer purchasing power.

"In addition we have concerns over [Thomas Cook] using easyJet (EZJ) as a third-party flying partner as there must be a risk this will lead to customers on these flights constructing their own holiday in future years rather than booking a package," warns Simon French, analyst at Panmure Gordon.

Thomas Cook's other regions don't seem to be doing too well either.

In its latest presentation, in November, the company stated: "[The] Eastern European businesses experienced difficult market conditions with general economic uncertainty together with local over-capacity", while "West Europe has continued to be affected by the ongoing political unrest in the Middle East and North Africa (MENA) region and the economic uncertainty caused by the European debt crisis".

The Dutch and Belgian markets were said to be "very price competitive", with Belgium also characterised by flight over-capacities. A decline in performance in North America was attributed to "over-capacity in the market which drove down average selling prices" as well as "a very mild Canadian winter which impacted the performance during the peak holiday period".

Nothing has changed since then. The eurozone debt crisis is unsolved; the MENA region is still in upheaval following the Arab Spring; while North America is now likely to be overshadowed by the fiscal cliff crisis.

Central Europe, West Europe, North Europe and North America account for 26%, 15%, 12% and 3% of sales respectively.

Single pricing a mirage

Bulls will say demand will pick up, as the tour operator offers uniform pricing across all three distribution channels of retail, online and phone.

However, there could still be variations in pricing across channels for components such as flight-only or room-only bookings. And French questions what the impact will be, "particularly when TUI Travel (TT.) continues to offer discounts on holidays booked online".

James Hollins, analyst at Investec, adds: "Uniform pricing should be well received by most consumers (less confusing and lower likelihood of a customer feeling they have overpaid relative to another), although some individuals used to getting the warm feeling of securing a discount online may not appreciate the strategy."

Poor track record of cost savings

Secondly, the group has outlined £100 million worth of cost savings, with more due to be announced in the spring. With an operating profit margin of just 1.6%, there is a clear need to reduce costs.

However, French points out that travel companies have a poor track record of cost savings being delivered to the bottom line, and believes that investors should be conservative when assessing how much of these should be included in profit forecasts.

He is assuming £60 million of UK improvement this year, and half of the £30 million of lost profits from bad publicity last year, will be recouped, along with all £13 million of the first year's cost savings. In years two and three, he forecasts only a third of cost savings will be delivered to the bottom line.

Rights issue on the way?

Thomas Cook has gross adjusted debt of £3.5 billion, with £540 million of EBITDAR.

French is of the opinion that the group needs to raise between £150 million and £300 million of equity to strengthen the balance sheet, which would reduce the 2014 pro-forma earnings per share from 3.9p to 3p.

Expensive valuation

Bulls attribute the share price reaction to the strength of new management, as well as a coherent and aggressive cost-saving programme being implemented that they say should ensure improved cash flow and earnings.

While there is some scepticism about how effective the cost-savings programme will be for the bottom line (see above), there is no doubt that Harriet Green as chief executive is an immensely impressive appointment for Thomas Cook.

However, it does appear that the hiring of the new management team, as well as any potential recovery, has been priced in. The stock is trading on a 2013 price/earnings (P/E) ratio of more than 20 times.

Next catalyst

Thomas Cook will unveil its interim management statement on 8 February.