Thomas Cook shares plunge following profit warning

Thomas Cook shares plunge following profit warning

thomas cook

Shares in Thomas Cook plunged as the holiday firm downgraded annual profit forecasts.

The company has blamed the heatwave for the drop in full-year profit forecast, as many customers put off holiday bookings to enjoy the warmer weather in the UK. 

“Summer 2018 has seen a return to popularity of destinations such as Turkey and Tunisia,” said Peter Fankhauser, Thomas Cook’s chief executive. 

“However, it has also been marked by a prolonged period of hot weather across Europe. This meant many customers spent June and July enjoying the sunshine at home and put off booking their holidays abroad, leading to even tougher competition and higher than usual levels of discounting in the ‘lates’ market of August and September.”

“Our recent trading performance is clearly disappointing. However, despite the recent challenges, we continue to make good strategic progress which positions us well to drive further performance improvement; this includes the launch of our Expedia alliance in the UK and Scandinavia, signing our first own-brand hotel in China and lining up a pipeline of 10 new Cook’s Clubs in some of our key destinations for Summer 2019.”

The group is now expecting full-year earnings of £280 million, below the previous forecast of £323 million, which the company made in July.

The warmer than usual temperatures are also expected to hurt bookings over winter.

In a separate statement, the group said its chief financial officer Bill Scott would leave the company at the end of November.

Shares fell 18 percent after the warning to 64p.

Thomas Cook will report its full-year results on 29 November.

Shares in the group (LON: TCG) are currently trading down 23.15 percent at 59,82p (0852GMT).