Co-op’s £82m in holiday pay as it breaks from Thomas Cook

The Co-operative Group today landed a windfall of almost £82 million as it exited its travel joint venture with Thomas Cook.

The Co-op’s consumer services chief Rod Bulmer said the business, which operates high street travel agencies, “does not fit” with overall strategy.

The decision follows a series of asset sales at the mutual.

After its bank came close to collapse in 2013, boss Richard Pennycook has jettisoned farming, pharmacy and ATM maintenance businesses to focus on core areas, such as food, funerals and insurance. The money generated by the sale, £50 million plus interest in return for its 30% stake and a dividend of £31.9 million, will be invested in those divisions.

Thomas Cook, which will also pay £5.8 million to Central England Co-operative for its 3.5% holding in the joint venture, said the long-expected deal was not expected to have a material impact on the group’s profit.

Taking full control of the 764-stores chain will allow it to better integrate in-store and online offers and grow sales of extras like holiday-related financial services, boss Peter Fankhauser added.