Does Thomas Cook have more investment appeal than IAG, Carnival and Tui after H1 results?

Will the Thomas Cook Group plc (LON:TCG) (TCG.L) share price outperform shares in International Consolidated Airlns Grp SA (LON:IAG) (IAG.L), Carnival plc (LON:CCL) (CCL.L) and Tui AG (LON:TUI) (TUI.L)?

Thomas Cook
Thomas Cook

The Thomas Cook Group plc (LON:TCG) (TCG.L) share price is flat today after the release of its H1 results. Revenue has risen 3% to £2994 million, which reflects strong Winter demand to Spain and long-haul destinations. Gross margin is 40 basis points lower, mostly due to weaker trading at Condor.

Thomas Cook’s seasonal underlying EBIT loss improved by £2 million to £177 million. The company’s seasonal loss for the period (loss after tax) improved by £27 million to £272 million. The strong bookings for 2017 also helped to reduce net debt by £34 million. It is now £794 million.

The company’s strategy is a key reason for its relatively good performance in H1 in my view. The changes it has made to its offering has helped increase its Net Promoter Score by 8 points. Measures such as a 24-hour hotel promise being rolled out to cover 80% of customers in core sun & beach holidays, as well as a growing digital presence mean customers may become more satisfied in my opinion.

Progress has also been made in the company’s own-brand hotels and resorts, while improved trading means Condor is expected to move back into profitability for the full year.

In the last 6 months, the Thomas Cook share price has risen 31%. This is a better performance than other travel & leisure companies such as International Consolidated Airlns Grp SA (LON:IAG) (IAG.L), Carnival plc (LON:CCL) (CCL.L) and Tui AG (LON:TUI) (TUI.L). For example, the IAG Share price is 30% up, Carnival has moved 14% higher and Tui is up 8%.

In my opinion, the Thomas Cook share price could continue to perform relatively well. I believe it has a good strategy to deliver improving customer satisfaction and financial performance in the long run. Therefore, I’m optimistic about its future prospects.