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| Edited By: Swati Khandelwal |Source: Zee Business |Updated: Jul 23, 2019, 06:30 AM IST
Thomas Cook India has no relationship with UK-based Thomas Cook but the news of its acquisition by a Chinese company has had an impact on us due to a similar name, says Brijesh Modi, CFO, Thomas Cook India Limited. In an interview with Swati Khandelwal, Modi said Thomas Cook India is independently run by Fairfax Financial Holdings since August 2012. Edited Excerpts:
The decline is a result of the rumours regarding the acquisition of Thomas Cook by a Chinese company, but this news doesn't stand true in respect to Thomas Cook India but is related to Thomas Cook UK. Thomas Cook India and Thomas Cook UK are completely different companies and only our names are similar. Interestingly, it was 2012 when Thomas Cook UK sold its shareholdings to a Canada-based company, Fairfax Financial Holdings Ltd, and since August 2012, Fairfax has been running Thomas Cook India independently. However, Thomas Cook UK has granted a brand licence to use the name 'Thomas Cook' up to the end of 2024. We annually pay Thomas Cook UK for the royalty which is the only transaction that we have with them.
The balance-sheet and financial condition of Thomas Cook India are quite strong, and according to our March 2019 accounts as well as annual reports, the company's total cash, deposit position has amounted at Rs 1,059 crore in the books, cash balances, bank balances and deposits. There is no problem with liquidity. We have always focused on free cash flow since 2012 when Fairfax acquired us. Our company generates free cash flow of Rs 200-250 crore, which was used for the prepayment of the debentures, the only borrowing in books last year. Pre-payment is a big thing amid the ongoing liquidity crunch situation, and we prepaid a debenture liability of Rs 69 crore. So, our holding company, Thomas Cook India, is a completely debt-free company.
Our growth rate for holiday business in the summer season stood 15-20% and we have a Board meeting on August 6, 2019, after which the detailed results will be released. In the coming seasons that is, July to December we have seen a growth of 12-15% in the forward bookings and the peak seasons like Dusshera and Diwali is yet to come. Besides, stabilisation and normalisation of the rates in the aviation sector give a feel this forward booking growth will be maintained or may exceed.
We do not require funds as our liquidity position is quite good. The working capital in travel business remains negative because the customers pay in advance, which is later paid to the supplier. As far as the expansion plan is concerned, we invest in 20-25 retail outlets annually. Investment in the online section is our priority as it is a new trend in which many people are booking online. If we look at the past few years, our capex amounts to Rs 20-25 crore on investments, expansion, technology and we will continue to do so.
Digiphoto was acquired at the end of March 2019, and June quarter will the first quarter when the company's profit and losses will be consolidated in our balance-sheet. The company had made a net profit of Rs 40 crore in 2018, and we expect the trend to continue. The company is profit accretive from day one and also generates cash flow, which is our top priority. Its results will be seen in the first quarter. There is an aspect of seasonality in every quarter, which results in profits for some quarters. We are looking at growth on an annual basis.
We are always open for acquisitions and go for it whenever any right opportunity comes on our way. We don't have liquidity concerns, and at present, we are looking forward to travel-related businesses, as we acquired Digiphoto. Before it, we have made a strategic investment in Ithaka, a company that curates itinerary.
― Zee Media Newsroom
