Other subsidiaries of Thomas Cook have generated a sizeable growth on the PBT front despite the last quarter being a lean quarter for the tour and travel business, says Madhavan Menon, MD, Thomas Cook.
In an interview to CNBC-TV18 Madhavan Menon, MD, Thomas Cook said, the company has reported profit before tax (PBT) of Rs Rs 27 crore in the second quarter, of which Rs 9 crore was contributed by Ikya Human Capital.
Thomas Cook acquired Ikya Human Capital earlier this year and revenues generated from this company have flown into the books of Thomas Cook in this quarter.
Other subsidiaries of Thomas Cook have generated a sizeable growth on the PBT front despite the last quarter being a lean quarter for the tour and travel business, he added.
Meanwhile, the company expects to grow by double digits in this quarter over the previous year. “People are deriving some positive inclinations from stable rupee. We launched European holidays for summer 2014. The first day of bookings has been in three digits. I am very hopeful that this will bear out for the rest of the season,” he elaborated.
Below is the edited transcript of Madhavan Menon’s interview with CNBC-TV18
Q: Let us talk about your travel and foreign exchange business, the profits from operation is up 23 percent this quarter and even profit after tax (PAT) is up 18 percent in a quarter in which we have seen significant currency depreciation, what led to this kind of performance?
A: First of all, this is the second quarter that our acquisition of company done earlier this year, Ikya Human Capital, is flowing through. It is flowing through for a full quarter for the first time. Therefore, one needs to look at the consolidated numbers. Let me explain these consolidated numbers. If you look at the profit before tax (PBT) it is Rs 27 crore out of which Thomas Cook has generated Rs 18.50 crore and the remainder of Rs 9 crore has come from Ikya.
If I look at Thomas Cook and its subsidiaries, we have generated a sizeable growth at the PBT line. We have generated growth at the topline, but I must mention that the last quarter has been a particularly difficult quarter. It also happens to be a lean quarter for us in terms of the seasonality of all our businesses. Looking from that aspect, the fact that our revenues are marginally higher, we are focused on managing our cost better. A lot of the growth on the PBT has come from that.
Having said that, we are now looking at the last quarter, which is when the season starts functioning again. From our perspective, our forward bookings are looking very healthy. And I expect that we will go back to our growth again. I might add that we launched our summer tours to Europe yesterday. We were able to generate three digit bookings, which was nearly 4 times what we had achieved in the previous year when we launched around the same time.
Q: Could you tell us – we understand from your earnings that you have got some gains on account of human resources services that has added about Rs 330 crore to your income, what is that and is this a one-off?
A: That is what I was mentioning earlier is Ikya Human Capital. This is the company that we acquired earlier this year. This is the first quarter when we are getting earnings across the first full quarter from them. In the previous quarter, we got approximately a part of the quarter when we had completed the transaction. So the growth that you are seeing from human capital is essentially the quarterly earnings that is flowing through our numbers from Ikya Human Capital.
Q: How is this quarter looking now? This is the holiday season, do you expect double digit growth in this quarter?
A: While bookings have been a little slower. At the beginning when we started looking at the October-November-December bookings earlier last month, they were looking a little slow, but they have slowly started picking up again. People are deriving some positive inclinations from stable rupee.
Having said that, my expectation is that we will grow by double digits over the previous year in this particular quarter. We launched our European holidays for summer 2014. The first day of bookings has been in three digits and that is something which is about 4 times what we have witnessed in the past. I am very hopeful that this will bear out for the rest of the season.
Q: You also have an enabling resolution to sell stake in various properties. Any progress on that, is that going to happen in next three-six months?
A: Very honestly. It is still an enabling resolution as I mentioned earlier. We have not done very much about it. In the current situation where commercial sales are a little slow, we are evaluating our options, we are evaluating proposals that we have, nothing is on the table at the moment.
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