Thomas Cook suffers UK profit slump

● Group says that current trading is robust with total bookings up 5%

left its profit margins 1.3 percentage points lower at 22.1 per cent. Its UK division saw margins drop after four years of growth. But Thomas Cook gave some hope that trading was turning around as holidaymakers return to “more profitable” destinations Egypt and Turkey.

Demand for trips to Egypt and Turkey plunged after the bombing of a plane from the Egyptian resort of Sharm elsheikh and a violent attempted coup by the Turkish army, which has been followed by a string of terrorist attacks in the country. It said current trading was in line with management’s expectations, with total bookings up 5 per cent, supported by demand for holidays in the Canaries and the renewed interest in Egypt.

Nicholas Hyett, an analyst at Hargreaves Lansdown, noted: “There are promising signsinthomascook’snorthern European and Continental businesses, but those are being outweighed by headwinds in the UK.

“With destinations in the Eastern Mediterranean out of favour following political unrest, holiday providers are dashing headlong into Spanishresorts.theincreasedcompetition is a double whammy for Thomas Cook, pushing up the cost of beds while piling the pressure on pricing.”