£1.5bn Brexit blow for Cook

Firm faces job losses and store closures

SHARES in Thomas Cook plunged 14% as it revealed holiday makers staying at home because of Brexit had led to a £1.5billion loss.

The group also issued its third profit warning in less than a year, announced the loss of 150 head office jobs and cast doubt over the future of a number of its 566 high street stores. Its pre-tax losses widened from £303million a year ago to £1.5billion in the six months to March 31 on revenues of £3bn, down from £3.2bn. Its tour operator bookings for this summer are down 12%. Chief Peter Fankhauser said there was “little doubt” Brexit had forced Brits to postpone summer trips. He added there had been no change since the March 29 deadline. Thomas Cook also suffered from more Scandinavians choosing not to fly for environmental reasons, high fuel costs and a wave of discounting from rivals. In addition it wrote down £1.1billion on the value of its MyTravel business, bought in 2007.

The group, with a net debt of £1.2bn, said profits would falter further in the second half despite a £300m bank loan to help it through the quieter winter trading period.

It is also looking at shedding 150 jobs at its Peterborough head office, possible further store closures and selling its airline.

Analysts said the poor performance raised the prospect of a bid for the firm, founded in 1841. “Times are tough for travel operators and the problem for Thomas Cook is its ability to navigate a difficult market, hindered by its unwieldy borrowings,” said Russ Mould, AJ Bell investment director.

“Speculation over an emergency fundraise is only likely to ramp up despite the company’s plan to flog off its airline operations.

“Alternatively, could Chinese major shareholder Fosun step in with a bid?”