At Last, a British Auditor Actually Does Its Job
Travel operator Thomas Cook has been too fond of using flattering profit adjustments. Fair play to Ernst & Young’s auditors for calling this out.
Thomas Cook's auditors deserve a nice holiday somewhere warm.
Photographer: DANIEL ROLAND/AFPIn late 2017, Thomas Cook Group Plc refinanced a 400 million euro ($451 million) bond at an attractive rate of just 3.875 per cent, cutting its yearly interest bill by 10 million pounds. The British travel company – whose illustrious history stretches back more than 175 years but which has had an increasingly tough time of it recently – also increased the size of a revolving credit facility to 650 million pounds ($831 million).
In hindsight, its timing was lucky. Summer bookings have been very disappointing subsequently, leading to a series of profit warnings. The bond’s value has slumped by almost one-third, and it yields nearly 14 percent (not a happy sign in credit-land).