Belfast Telegraph

More gloom expected for under-the-weather tour operator

By Toby Green

Thomas Cook has had rather a tough time of it recently. The tour operator's chief executive, Manny Fontenla-Novoa, resigned in August after overseeing three profit warnings in less than a year and its share price has plummeted more than 80% since February.

Investors will, therefore, be hoping there is no more bad news on Thursday when the group releases its pre-close update. The last time it updated the market, in July, it estimated that it would make an operating profit of £320m for the year.

Last week its rival, Tui Travel, said that strong trading at the end of summer had ensured it remained on track to meet its profit targets. However, Numis Securities' Wyn Ellis is not forecasting bullishness from Thomas Cook. He said "deteriorating economic conditions" meant that he did not "expect any near-term respite to the problematic trading environment that has helped to de-rail the company."


The Daily Mail's owner DMGT issues a pre-close trading update, and Investec's Gareth Davies expects the same themes to be the focus as when it released its third quarter interim management statement in July. Mr Davies believes national advertising will have dropped by just under 10% over the year, with regional advertising dropping by roughly 8%. He also expects the company to have cut its debt to under £800m by the time the year draws to a close.


Its brief update on Wednesday before the end of its financial year is unlikely to see Babcock reveal much aside from details on its order book and pipeline, according to Citigroup's Hugo Mills. The analyst believes the defence group will achieve its stated aim of a £10bn pipeline by November, and therefore estimates it should by now have topped £9bn. However, he expects the order book to stay steady at £12bn, although he still feels this will be "an achievement".

Mr Mills also says he will be on the lookout for a possible disposal of its US unit. After being knocked by a profit warning from its detection business in May, Smiths Group reveals its full-year results on Wednesday with hopefully no more nasty shocks. Charles Stanley's Tina Cook is forecasting that the figures will be in line with expectations.


The world's largest caterer, Compass, issues its pre-close trading update on Thursday, having last updated the market back in July when it revealed a jump in its revenue of 4.5% over the third quarter. Analysts from UBS expect it to post a 5% rise in organic sales for the 12 months, with margins staying flat in the last three months of the year.