The Courier & Advertiser (Perth and Perthshire Edition)
Thomas Cook issues third profit warning of the year
Thomas Cook shed more than a fifth of its stock market value yesterday after its third profit warning of the year caused shares to plunge.
In an unscheduled announcement, the company said it would take a £30 million hit to profits due to extra costs and the effect of the heatwave on holiday bookings.
Underlying earnings will be £250m for the year to September 30, down £58m on 2017.
This was put down to additional charges including flight disruption, writedowns on money owed by some hotels and transformation costs, as well as delayed demand for its tour holidays amid the heatwave.
Group revenue was up 6% on a like-for-like basis, reaching £9.58 billion.
Analysts at AJ Bell said: “Thomas Cook has experienced a cocktail of problems over the past few months and its shares have been burned as a result. Management are doing their best to apply after-sun lotion to the situation but ultimately, the business is looking very sore.”
Earnings in the tour operator division dropped by £88m due to a higher-thananticipated decline in margins as Thomas Cook slashed prices to keep up with competitors.
The company said warm weather in Europe meant many customers had delayed holiday-booking decisions.
Shareholders will not receive a dividend.
Chief executive Peter Fankhauser said: “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.”
Thomas Cook shares fell 10.98P to close at 37.56p.