The shares of Thomas Cook Group plc (LON: TCG) are up 469% since this time last year.
The shares of Thomas Cook (LSE: TCG) climbed 2p, or 3%, to 74p during early London trade this morning to extend their twelve-month gain to 469%.
The advance was prompted by a first-quarter statement that declared the travel agent's business transformation plan was "firmly on track".
Thomas Cook revealed underlying losses during October, November and December had reduced from £93m to £70m. Lower costs counterbalanced revenues that fell £137m to £1,724m.
The group also announced plans to reduce its costs by a further £60m a year, which will come on top of the £100m of cuts announced previously. Today's statement confirmed net debt stood at £1,559m, too.
Harriet Green, Thomas Cook's chief executive, said:
"As we continue to strengthen Thomas Cook and determine our profitable growth strategy for the future, the power of our brand remains key to the transformation.
We have seen stronger operating performances in our major markets - the UK, Germany and the Nordics. I am particularly pleased with the improved performance in the UK as the benefits of the turnaround plan are reflected in its operating results."
Looking ahead, the travel agent claimed future bookings were "robust" and "in-line with expectations" as the firm's "improved capacity management" led to higher sale prices and improved margins.
This time last year, Thomas Cook's shares were languishing around the 13p mark after a series of profit warnings during 2011 wiped more than 90% from the group's market value.
Today's market cap is £670m, which when added to the firm's average net debt level gives an enterprise value of £1.7bn. Assuming a margin of 3.5% -- achieved during 2008 and 2009 -- can be regained on last year's sales of £9bn, earnings might one day recover to £250m. That forecast could value the business at less than 7 times potential profits.
Of course, whether those projections are realistic -- and whether the shares can rally even further from here -- remain questions only you can answer.
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> Maynard does not own any share mentioned in this article.
