Thomas Cook cuts profit forecast, suspends dividend on weak British market
Thomas Cook cut its forecast for full-year underlying operating profit for the second time in two months on Tuesday 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 13pc.
Bringing forward its results by two days, the company said on Tuesday it now expected to report a figure of £250m (€282.5m), down £58m (€65.5m) on the previous year and below the target of £280m (€316m) it set in September.
Part of the hit came from £28m 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."