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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Thomas Cook - Capacity management boosts margins

March 2013

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • TCG
  • Price:
  • 92p
Shares in package holidays operator, Thomas Cook, one of our NAPS for 2013, have soared to a new high of 92p, making for a gain of 66% in just a month. This rise came on the back of improved trading for the quarter ended 31 December as a reduction in surplus capacity (fewer available holidays) led to a 7% drop in revenue to £1,724m, but more importantly a 1.3% increase in gross margin. That resulted in a reduced operating loss of £106m (previous year: £121m) in spite of a £6m rise in interest costs. Better cash management reduced net debt £86m to £1,559m, leaving headroom of £290m. Encouragingly management have identified a further £60m savings on top of the original £100m. The improved trading came thanks to stron ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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