Thomas Cook shares up 8% as bookings remain 'stable'

Shares in travel group Thomas Cook were up nearly 8% this afternoon after it reported market share remained stable and revenues were up in the fourth quarter.

Yesterday rival firm TUI Travel claimed the financial troubles at debt laden Thomas Cook, which were well publicised last year when it issued three profits warnings, had played to TUI's advantage. TUI reported bookings were unchanged in January while the industry reported a 14% drop.

However, Sam Weihagen, group chief executive at Thomas Cook, refuted claims the firm's market share was declining in an interim management statement: "I have been encouraged by how our bookings have developed, particularly in the UK where our market share for both the winter and summer seasons remains broadly stable."

The share price was up 7.7% or 1p, at 14p,by 13:09pm. The statement also revealed revenues were up 3% on the previous year to £1.8bn due to increased activity in Northern Europe and Airlines Germany.

However, there were seasonal underlying losses in operations of £91m, more than the £37m reported in 2010 as a result of "tougher trading conditions and rising fuel costs".

Weihagen said: "As expected, the first quarter has been adversely impacted by the uncertain economic environment across Europe, input cost inflation and the ongoing disruption in MENA."

In the UK, the statement said its turnaround plan was progressing well and it remained on track to deliver the planned £35m benefit in the current financial year which will "help offset the headwinds faced from a weaker consumer environment" and announced plans to sell off further parts of the business.

"We continue to work hard on restructuring the UK business and a full strategic review of the group is progressing well. As part of this review, the board has agreed the group will look to sell its majority stake in its publically quoted Indian subsidiary. This is in addition to the previously announced non-core asset disposal programme where we have made good progress."

Last November, the tour operator's share price fell by 73.8% or 30.34p to 10.77p following the group's announcement that it was seeking more capital because of a slow-down in trading.

The firm blamed the dip in sales on weak consumer confidence due to political unrest in Egypt and Tunisia and floods in Thailand and reportedly considered the closure of around 200 travel agencies.

Its bankers, including Barclays, HSBC, RBS and UniCredit, agreed to provide a £200m facility until April 2013, which replaced a £100m short-term credit agreement announced in October 2011.

Investment Week also reported both Scottish Widows £715m UK Income fund, which was one of the top ten shareholders, and Invesco Perpetual's £127m UK Aggressive fund were both hit after seeing their holdings in Thomas Cook fall.