Thomas Cook secures extra funding as financial woes worsen.

22/05/2019.

Thomas Cook has secured £300m of extra funding to tackle mounting debts and is reportedly seeking a sale of its airline as the travel firm struggles to stay afloat.

See our previous post – What  if Thomas Cook collapses?

Britain’s oldest travel agent has faced financial difficulties alongside other high street businesses as disruption from online competitors cuts into company profits. The business reported a pre-tax loss of £1.5bn for the first half of 2018 and saw share prices fall 17% to 19p, as sales continue to wane. At the end of 2018, the company lost 60% of its value in just eight days, after issuing two profit warnings in two months.

The situation has only continued to worsen for Thomas Cook this year. Although revenue increased to £3.2bn in the six months to March 2019, profits were felled due to a £1.1bn write down of high-street operator MyTravel, which merged with Thomas Cook in 2007. Despite offering extensive discounts and cutting down on holiday packages for 2019, the business says it has still only sold 57% of its summer 2019 holidays, with tour operator bookings declining by 12%.

CEO blames Brexit as analysts call for “urgent” airline sale

Accounting for Thomas Cook’s poor performance, the travel group’s CEO Pete Fankhauser says business has been impacted by “an uncertain consumer environment across all our markets,” with uncertainty regarding Brexit leaving many in the UK reluctant to make travel plans. Speaking on recent sales figures, Mr. Fankhauser says there is “little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”

Analysts have highlighted the severity of the situation and the company’s need to cut down on costs. Begbies Trainer partner Julie Palmer warns: “Thomas Cook’s need to sell its airline business to balance out the books will become increasingly urgent as time runs down to get the best price,” with investors and offer prices potentially set to decrease due to “the current climate” of “people trying to make fewer journeys via air” due to environmental concerns. The agency meanwhile says it has received multiple bids for its airline business, but has yet to accept any.

String of high street tour operators collapse

In addition to waning consumer demand for holidays this year, travel agencies are also facing a more systemic threat from the rise of online commerce. Web-based travel agents are taking over market space from traditional operators, with the market value of e-retailer On the Beach this month surpassing that of Thomas Cook in a watershed moment for the industry. Six high street UK tour operators collapsed last year, as steep rent costs become increasingly unsustainable due to internet disruptors and decreasing consumer demand.

Are you owed money by a travel company?

With pressures on the high street it is essential that you stay on top of the credit limits you grant travel companies and watch carefully for any late payments.

If Thomas Cook can get into difficulty, you can’t just assume your customers can and will pay you, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

See the section below – About CPA.

Are you also at risk of collapsing?

If you are struggling like Thomas Cook, rather than shutting down, do you realise you may have a hidden source of capital within your business waiting to be activated?

We can help you uncover a hidden goldmine, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.

That compensation could be the cash rescue your business needed.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cashflow.

Don’t let your bankers control you, contact CPA today.

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to retailers like Select or small ones, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

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For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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