Thomas Cook blames heatwave for profits warning

Daily news Economy

The UK’s summer heatwave has been blamed for a travel operator’s profits warning that sent shares tumbling by up to 25 per cent.

Thomas Cook said warm domestic weather had led to many customers opting for a UK ‘staycation’ this year.

This has forced Thomas Cook to offer higher discounts than usual, cutting the full-year earnings forecast from £323 to an expected £280m.

The company share price has fallen by 50 per cent since the start of the year

In a separate announcement, Thomas Cook announced the departure of chief financial officer Bill Scott this November after less than a year in the post.

Chief executive Peter Fankhauser told investors that the effects of the heatwave would impact on Thomas Cook into 2019.

He admitted that trading was “disappointing” but said the firm was capable of further improvements in performance.

Holidays to Turkey, Egypt, Tunisia and Greece were popular again, he added. This had contributed to a 12 rise in group bookings compared to last year.

This was offset by a five per cent decline in the price holidays were sold at.

Thomas Cook makes most of its annual profits in the summer and analysts predicted a tough winter for the operator.

Rival operator Tui said last month that its profit predictions stood, but it did not expect to beat them due to the warm summer at home.

The British tourist industry has been celebrating a bumper year, with more than two thirds of British people planning a domestic break.

Last year, they took more than 33 million domestic holidays, according to the Association of British Travel Agents. It is hoped that figure will be surpassed in 2018.

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