The owner of North East independent holiday firm Hays Travel says the company’s latest results vindicate the decision to acquire hundreds of Thomas Cook shops three years ago.
The Sunderland business, launched 42 years ago in a single shop in Seaham, County Durham, became the UK’s largest independent travel firm when it bought 555 high street travel agents from the collapsed tour operator Thomas Cook in 2019 in a £7.8m deal.
Months later, the company’s entire network of shops was forced to close when the Covid-19 pandemic struck, which led to it effectively laying off around 900 of its staff while putting some on half pay, saying the slump in the travel market had led to it losing hundreds of thousands of pounds a day.
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Now, three years after rescuing the Thomas Cook shops and jobs, the company has announced its first profit since the start of the pandemic, converting the loss of £35.6m for the 18 months to April 2021 to operating profit of £12.45m for the year ended April 2022. It also recorded Ebitda of £15.9m, up from a loss of £29.4m.
The results come despite a turbulent 12 months with ongoing coronavirus restrictions, the Omicron variant, the national recruitment crisis and latterly the Russian invasion of Ukraine impacting the whole travel industry.
Travel bookings increased by 221% and the group achieved a transaction value of £1.07bn, up from £747m in the previous 18 months. Turnover, however, dropped from £262.5m to £219.4m. The average number of employees fell from 5,229 to 3,786.
The firm retained all former Thomas Cook employees who wanted to join Hays Travel when it took over the shops in 2019 and it said it has since increased overall staff numbers in the three years since the acquisition. There are also now 542 apprenticeships across the UK in travel agent or head office roles.
The company made two acquisitions and continues to have no debt and does not use overdrafts. It said its balance sheet continues to strengthen with significant improvement in sales of cruise and touring holidays.
Owner and chair, Dame Irene Hays, said: “These results vindicate our decision to acquire the Thomas Cook retail estate and we have fulfilled the commitment we made then to return the remaining shops to profit.
“The key to our success is our customer service ethos. Each time a new challenge appeared – whether it was traffic lights, restrictions or cancelled flights - our agents were there for their customers.”
Dame Irene said that diversifying during the pandemic to provide business processing services, utilising contact centre skills and expertise, and the strength of the balance sheet pre-pandemic all played a part in sustaining the business.
With new challenges on the horizon, not least the cost-of-living crisis, she said the firm’s business plan remains ambitious and achievable.
She said: “The demand for holidays continues. As the UK’s largest independent agent, our vast range of products means we can find holidays for people who are on a budget or those who want luxury, longer cruises or touring holidays, and we are seeing lots more people choosing to spread the cost by direct debit.
“In the current year we will continue to grow organically and via acquisitions as well as developing our Independence Group, Foreign Exchange and Homeworking Divisions, continuing our focus on great value holidays and excellent customer care.”
Dame Irene commended the commitment and skills of the company’s staff, adding: “Our people have yet again been phenomenal. The success of the company in 21/22 is down to their fantastic commitment to continued customer service throughout the pandemic and ever since.
“We’ve continued to recruit and train more travel agents and head office positions and more than doubled the number of apprentices. I am delighted that we can now continue to reward our retail teams for their loyalty and hard work with a significantly increased bonus scheme.
“I’m also pleased to be able to reinstate our contributions to local communities through our branches across the country and the Hays Travel Foundation.”
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