Thomas Cook has booked a profit in the full year to 30 September 2015, the first profit in five years for the troubled travel agency. The company announced the profit on 25 November and told shareholders that it was positive about the outlook for 2016, despite global threats.
After being close to a breakdown in 2011, Thomas Cook reported a £50m pre-tax profit, from a £114m loss in 2014's financial report. Sales, however, were down 8.8% to £7.8bn.
"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," chief executive Peter Fankhauser said. "We have continued to build on this success with the launch of a new boutique concept, Casa Cook, with the first hotel set to open next spring in Rhodes."
"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," Fankhauser said, referring to terrorist attacks and higher threats in several popular destinations.
Thomas Cook was one of the companies hit after the attacks in Paris and the company has seen a year of crisis in Tunisia and a higher terror threat around the world. However, many people are looking for destinations that are considered safer, which could mean flights to countries further away and higher incomes for the travel giant.
The firm has suspended flights to Egypt's Sharm el-Sheikh and its Tunisia market is closed. After the plane crash in Sinai, it has sent back around 1,700 customers from the Sharm region, contributing to higher costs. However, as this happened after 30 September, this will be calculated with 2016's full year results.
The company has also faced backlash when a court ruled in May that the company had breached its duty of care in 2006 after two children died from carbon monoxide poisoning in a hotel in Corfu. The company has since paid the compensation of £1.5m it had received from the Louis Corcyra Beach Hotel in Corfu to Unicef, without consulting the children's parents, who had been supporting a different children's charity.
People turned to social media to encourage others to boycott Thomas Cook earlier in May when it was reported that the company allegedly received a much larger sum in compensation than the parents. Fankhauser later apologised for what happened.
"With terrorism and geopolitical related fears having hampered travel sector sentiment of late, investors are welcoming a strong bounce by Tomas Cook (TCG) shares this morning," Michael van Dulken, head of research at Accendo Markets commented. "This comes from a return to full-year profit after a half decade of losses, management's upbeat observations on current trading in the face of headwinds and its confidence in guidance/outlook following am encouraging start to the year allowing it to reinstate dividend payments in 2017 after a 4 year hiatus."