| 8.7°C Belfast

Thomas Cook loses quarter of value due to heatwave


Lessons: Peter Fankhauser

Lessons: Peter Fankhauser

Lessons: Peter Fankhauser

Thomas Cook shed a quarter of its stock market value yesterday after its third profit warning of the year caused shares to plunge.

The company said it would take a £30m hit to profits in an unscheduled announcement due to extra costs and the effect of the heatwave on holiday bookings.

Underlying earnings will be £250m for the year to September 30, down £58m on 2017.

This was put down to additional charges including flight disruption, writedowns on money owed by some hotels and transformation costs, as well as delayed demand for its tour holidays amid the heatwave.

Group revenue was up 6% on a like-for-like basis, reaching £9.58bn. Shares in the company plunged as much as 30% in early trading before settling at about 37p in mid-morning, a drop of more than 23%. Rival holiday operator Tui was also affected, with shares dropping 3%.

Analysts at AJ Bell said: "Thomas Cook has experienced a cocktail of problems over the past few months and its shares have been burned as a result. Management are doing their best to apply after-sun lotion to the situation."

Chief executive Peter Fankhauser said: "Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering."

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required