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.

About Robert Stephens 3395 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email or use one of the other contact methods available on the 'Contact Us' page