thomas cook

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.

“Looking to the year ahead, we can see real momentum in our Group Airline, and expect our Continental Europe and Northern Europe tour operator businesses to continue their good performance.”