Flight and package tour company Thomas Cook has today confirmed it has suffered a loss of profits in its last financial year following the issue of its second profit warning in two months, blaming the hot British summer for a downturn in its fortunes.
The tour company made a pre-tax loss of £53m on earnings for the year to September a whopping £76m lower that this time last year. Last year’s pre-tax profits were £43m so the drop represents a significant problem for the company. Thomas Cook blamed the unusually hot summer for the fact that people had decided on a staycation rather than escape abroad to warmer climes. That said, winter holiday bookings were also down by 3% so perhaps there is a trend with consumers being concerned about the economy.
Shares in Thomas Cook fell by 23% following the profit warning and a further 1.7% today following the announcement of the loss. Rival travel company Tui was also hit by a 3% fall.
Thomas Cook still managed to turn a profit of £30m in their airline business which has led to calls to split the airline away from the loss making holiday division.
The company remained optimistic on the future with the intention to build its partnership with Expedia and to open at least 20 new dedicated hotels.