Summer heatwave ‘hits holiday giant’s profits’
HOLIDAY giant Thomas Cook is expected to lay bare the impact of a European heatwave and a fall in demand for last-minute trips abroad when it unveils falling profits this week.
A consensus of City analysts expects the firm to post a 15 per cent dive in underlying operating profit to £280m for the full year to September.
It comes after the FTSE 250-listed group said earlier this year that an ‘unprecedented’ prolonged period of hot weather across the continent meant more people spent June and July enjoying the sunshine at home.
However, Thomas Cook’s current trading performance should have improved or at least stabilised since it warned over profits in September.
Since then, holiday bookings for European destinations have not waned, broker Numis said, despite fears of a potential hard Brexit.
Kathryn Leonard, analyst at Numis, said: “The data suggests that demand has improved since Thomas Cook last reported.
“Indeed, the growth of keyword search terms versus the prior year have, on average, improved by circa 5 per cent in the UK and by circa 17pc in the Nordics.”
Adding credence to the data, easyJet recently said that forward bookings for next summer are ‘slightly ahead’ of this summer. Ryanair said Brexit had not affected demand from UK or European consumers for travel.
Numis said the comments from airlines are ‘supportive for the wider UK-listed travel sector, as investors remain vigilant of any slowdown in demand.’
The Thomas Cook results are due out on Thursday.