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Thomas Cook shares tumble as it cuts profit forecast again
Thomas Cook shares dipped 30% this morning after it made an unscheduled announcement warning of a £30m hit to its profits, reiterating the impact this summer’s heatwave has had on demand for holidays.
In its second profit warning in two months, the operator said warm weather in Europe led to delayed holiday bookings and said underlying earnings would be £250m for the year to September 30, down £58 million on 2017.
Chief executive Peter Fankhauser said it had been a ‘disappointing year’, adding the UK was ‘particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain’.
The drop in earnings has also been put down to additional charges including flight disruption and transformation costs.
Group revenue was up 6% on a like-for-like basis, reaching £9.58bn.
A higher-than-expected dip in margins saw earnings in the group’s tour operator division dropping by £88m as it cut holiday prices.
Bookings for the upcoming winter season are down 3% in the tour operator division, but airline bookings are 11% ahead of last year.
Fankhauser added: "Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering.
"We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant."
The group will focus on pushing its own brands in the UK for 2019, increasing flexibility and reducing costs.
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Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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