Thomas Cook Back In Profit After Five Years

Thomas Cook has posted an annual pre-tax profit for the first time in five years despite facing challenges over its response to the deaths of two children in Corfu and the terrorist attack on tourists in Tunisia.

The travel company reported a pre-tax profit of £50m for the 12 months to the end of September, compared to a £114m loss the year before. It had last reported an annual profit in 2010.

Chief executive Peter Fankhauser said 2015 had been a "year of real progress" as good trading combined with tough cost control.

He said the new financial year had got off to a good start with encouraging trading for the coming winter and summer. Shares rose 5%.

But he added that the travel industry was experiencing "an unprecedented level of disruption" after terror alerts in Tunisia and Egypt saw flights suspended while the attacks in Paris knocked consumer confidence.

Mr Fankhauser said: "In my 30 years I've never experienced anything like it."

The return to profit comes after a turnaround initiated by previous boss Harriet Green, who was widely credited with saving the business - while shedding thousands of jobs and shutting branches - before quitting last year.

Revenues fell 9% to £7.83bn but Thomas Cook said that on a like-for-like basis adjusting for currency movements, business disposals and store closures, and fuel costs, they were up by 1%.

The group saw a £263m increase in sales of holidays to own-brand hotels and other new products but took a £130m revenue hit from disruption in Tunisia and a fall in other revenue of £47m. Tunisia resulted in a £22m profits hit, slightly up from a previous estimate of £20m.

Flights to the north African country remain suspended after the massacre of 38 tourists in June. Thomas Cook has also suspended flights to Sharm el Sheikh in Egypt, along with other operators, after the downing of a Russian jet from the resort was blamed on a bomb.

Mr Fankhauser said: "Despite turbulence in some of our destinations, the underlying business performed in line with our plans at the start of the year, demonstrating its greater resilience.

"Customers have responded well to our increased focus on higher-quality hotels with our own-brand properties proving particularly popular, growing bookings by more than 40% over the year.

"Of course, the past year has also presented considerable challenges for Thomas Cook as we confronted the mistakes that were made following the deaths of Bobby and Christi Shepherd in Corfu nine years ago.

"I am clear that we need to learn from the tragedy and do things differently in the future."