Thomas Cook Cuts Profit Forecast, Suspends Dividend On Weak British Market
Thomas Cook warned in September that a heatwave in northern Europe had hit demand in the most profitable part of the summer season and hurt winter trading, forcing it then to cut its profit outlook by 13 per cent
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Thomas Cook cut its forecast for full-year underlying operating profit for the second time in two months today and suspended its dividend after the hot British summer deterred holidaymakers from going abroad.
The British company warned in September that a heatwave in northern Europe had hit demand in the most profitable part of the summer season and hurt winter trading, forcing it then to cut its profit outlook by 13 per cent.
Bringing forward its results by two days, the company said today it now expected to report a figure of 250 million pounds ($320 million), down 58 million pounds on the previous year and below the target of 280 million pounds it set in September.
Part of the hit came from 28 million pounds worth of legacy and non-recurring charges, due to transformation and disruption costs, and unpaid historic hotel bills.
"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," Chief Executive Peter Fankhauser said.
"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."