Everything looks better in the sunshine and Thomas Cook's (TCG) trading statement is no exception. The travel agent rises 2.1% to 156.8p after revealing growth in revenue and margins.


The figures reflect an underlying resilience to the group's recovery that will doubtless be seen as a vindication of chief executive officer Harriet Green's turnaround strategy.


With underlying earnings before interest (EBIT) and tax improving to a £1 million profit in the three months to 30 June, this represents a whopping £46 million improvement on the same period last year.


Taken over the nine-month period, losses before interest and tax have narrowed to £197 million compared to the £271 million hole in the accounts in the same period last year.


But improving revenue is only one facet of a recovery with a lot of moving parts. Margins over the three months to June have progressed in the right direction with underlying gross margin on a like-for-like basis improving by 110 basis points to 19.8% year-on-year.


And let's not forget the group's ambitious efficiency drive which in the third quarter delivered an additional £31 million of cost savings and profit improvement benefits, taking the cumulative total to £138 million and representing significant progress in meeting a 2013 full-year target of £170 million. The tour operator says it has increased its full year 2015 cost-cutting target from £390 to £400 million.


The delivery of stronger balance also remains a priority. As such, net debt has been more than halved from £1.1 billion a year ago to £452 million and the completion of a £1.6 billion capital refinancing has been instrumental in this ongoing rehabilitation of Thomas Cook.


Trading continues to show encouraging improvement with approximately 85% of planned capacity already sold for the summer 2013 season and political unrest in destinations like Turkey and Egypt has so far not proved too onerous a headwind. In terms of new product lines, the group's concept hotel customer bookings for the summer 2013 season are up by 38%.


When we featured Thomas Cook in last week's issue of Shares, we voiced reservations about the group's ability to hit its online targets in line with its Key Performance Indicators. It would appear, at least on a reading of today's statement, that such concerns may have been ill-founded.


Over the past 12 months, the group can point to a web penetration rate of 35% with www.thomascook.com coming out on top as the most visible holiday website on Google UK, attracting 59% of all generic holiday searches made via laptops and desktops.


It is also the second most visible website for generic holiday searches made via tablets and smartphones, accounting for 68%, snapping at the heels of travelsupermarket.com on 69%.

Issue Date: 01 Aug 2013