Troubled Thomas Cook issues further profit warning

‘High levels of discounting’ exerting pressure on margins, according to travel firm’s boss

Thomas Cook said it had received multiple bids for its airline, but this was overshadowed by what it referred to as a ‘difficult trading environment’. File photograph: Getty
Thomas Cook said it had received multiple bids for its airline, but this was overshadowed by what it referred to as a ‘difficult trading environment’. File photograph: Getty

British travel group Thomas Cook issued its third profit warning in less than a year on Thursday.

The alert sent its shares tumbling to a 6½-year low as the company said discounting and higher fuel and hotel costs would take a toll during the peak summer season.

Thomas Cook said it had received multiple bids for its airline unit, but this was overshadowed by what chief executive Peter Fankhauser called a "difficult trading environment" despite a delay to Britain's exit from the European Union.

"With a lot of holidays left to sell across the market, there are high levels of discounting at this early stage of the season . . . [and] this is putting further pressure on margins," said Mr Fankhauser. He added that a Brexit delay from March 29th until October had brought no respite.

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"There's no doubt that we have [had] a decline in consumer confidence during this whole Brexit phase in the run-up to March. But we have seen no material change to booking patterns in recent weeks since the delay to Brexit was announced," he added.

Thomas Cook warned that second-half underlying earnings before interest and tax would be below the same period last year. And the company added it had agreed a £300 million bank facility to provide more liquidity for the 2019-20 winter season.

Shares fell as much as 23 per cent in early deals to their lowest level since November 2012, taking the value of the company below £300 million.