Thomas Cook to axe 200 UK branches under turnaround plan

Thomas Cook’s share price has been dealt another blow after the travel operator announced plans to close more stores than expected.

In its final results for the year ending September 30, the world’s oldest travel agency says it will close about 200 “underperforming” shops with leases that expire in the coming two years. The news came as the firm reported a £398m loss for the year.

The move is part of the company’s UK turnaround plan, which includes measures to reduce its UK airline fleet, consolidate its hotel portfolio, eliminate inefficiencies and integrate its independent businesses.

Thomas Cook’s share price was down 4.05% to 14.22p as of 1215 GMT. The stock has plummeted over the course of 2011 after starting the year at 195.2p and peaking at 204.8p in mid January.

The travel agent’s major shareholders include Invesco, BlackRock, Axa, Standard Life Investments and Legal & General.

The stock also owned by a number of individual retail funds. The latest data available to Morningstar shows relatively minor positions in Thomas Cook being held by the Scottish Widows UK Equity Income, Premier Income, Artemis Strategic Asset fund and GAM UK Diversified funds, among others.

Thomas Cook has battled to bolster the confidence of investors in recent months. In November, its shares dropped by three-quarters in one day, despite the company securing £200m in new funding just days before.

A fall in UK profits and the disruption across the Middle East and North Africa were offered as the reasons for the group’s lower profits.

Sam Weihagen, group chief executive, says: “We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance.

“I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value.”

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