Shares in travel company Thomas Cook plunged on Wednesday morning, after UK profits dropped significantly in the year to 30th September.

The group was hit by a combination of rising holiday prices and a fall in the value of the pound, as well as a price war in the Spanish market.

Earnings in its UK division dropped by 40 percent over the year to £52 million, sending shares down over 10 percent at market open. However, outside of the UK, underlying earnings rose across the group as a whole to £330 million, despite being hit by a surge in costs from fraudulent illness claims.

Thomas Cook said: “In response, our UK tour operator has implemented a set of actions to improve profitability.

“We have taken a robust approach towards illness claims including improving our handling and assessment processes, and taking legal action against fraudsters – as a result, the claim rate has declined dramatically.”

However, looking ahead, the company confirmed that current trading remained in line with expectations after a renewed interest in winter breaks in Egypt and the Canaries.

Peter Fankhauser, chief executive of Thomas Cook, said: “2017 was a milestone year in the strategic development of Thomas Cook.