Thomas Cook has issued a second profit warning in two months.
The package holiday provider has said that profits are expected to be £30 million lower than expected.
The heatwave had an impact over summer, where people put off booking holidays to stay in the UK. The mild winter is having the same effect for winter holiday bookings, which are down by 2% over Christmas.
The group’s airline business performed well and recorded profit growth of £35 million.
Earnings to the end of September will be £250 million.
On the profit warning, shares in Thomas Cook (LON: TCG) fell 30%.
“2018 was a disappointing year for Thomas Cook, despite achieving some important milestones in our strategy for transforming the business,” said the group’s chief executive Peter Fankhauser.
“After a good start to the year, we experienced a larger-than-anticipated decline in gross margin following the prolonged period of hot weather in our key summer trading period,” he added.
“Our final result is expected to be around £30 million lower than previously guided, due to a number of legacy and non-recurring charges to underlying EBIT. Within this, profit in our tour operating business fell £88 million as the sustained heatwave restricted our ability to achieve the planned margins in the last quarter.”
“The UK was particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain.”
“Despite the impact of the hot summer, our northern European tour operator achieved anear-record performance, albeit lower than that expected at the end of May. Meanwhile, our Group Airline delivered strong growth in customers and profit, benefiting from increasing capacity in a turbulent European aviation sec,” he added.
Shares in the group are currently trading -25.71% (0907GMT).
