Mahesh Iyer, CEO & executive director, Thomas Cook (India) Ltd (TCIL), spoke about restructuring at TCIL, acquisition of Kuoni and future acquisition plans during an interview with Swati Khandelwal of Zee Business.
There has been a lot of nervousness about the debt level of your parent company. Will this nervousness have an impact on Indian operations?
Not at all as Fairfax took over the Indian operations of Thomas Cook in 2012 and since then the Indian operations of our company are directly controlled by the Fairfax group. But the brand licence agreement enables us to use Thomas Cook’s brand name. Apart from this, we don’t have any association with Thomas Cook.
The company has gone through restructuring in the recent past. What’s the current status?
We are carving out Quess, one of our portfolio investments, that has grown and gone public, as part of our restructuring exercise.
In the process, we are giving direct ownership of Quess to the shareholders of Thomas Cook that shareholding of Quess. This is the restructuring that we are going through at present. No changes are being introduced in the business of TCIL, which is solely into travel and tourism. In fact, in H1FY19, we have seen our travel business growing at about 17% and passenger growth has been around 12%. Our forward bookings for the coming quarter is higher by about 20% and this is a reason that we are excited to see what the future is holding for us.
You have acquired destination management business from Kuoni this year. How is it contributing to the business?
At the time of acquisition, it had a loss of about $3.5 million, but has reached break-even in the first half of fiscal 2019. So, our estimates for the full year is that we should be at a breakeven or at a marginal loss, but there will be a substantial improvement from the previous year.
Are you planning more acquisitions in FY19?
Our latest acquisition is a start-up because we felt that the new millennials are using technology to get across the customers and we thought that it is the right platform to invest. We don’t have any specific targets that we go after, but clearly if there is a good opportunity at an attractive price we will acquire it. At the standalone level, we are debt-free and are able to generate about Rs 200 crore of free cash every year. Hence, have fairly deep pockets to acquire.
Will currency depreciation have an impact on your business in the ongoing quarter and the next? Is there any conscious shift in the international and domestic travel pattern?
The currency volatility did not have any impact on our business even when it was at its peak in August-September season because holiday is a category where plans are postponed but not cancelled.
