24 Thursday, May 16, 2019 20:54

Thomas Cook suffers £1.5BILLION loss as Brexit uncertainty spooks holidaymakers

Thomas Cook has reported a £1.5billion half-year loss (Image: GETTY)Pre-tax losses for the troubled holiday firm widened from £303million in 2018, while shares plunged 17 percent off the back of the news. Boss Peter Fankhauser pointed the finger to Brexit uncertainty and said there was “now little doubt” that ongoing political decisions had caused UK holidaymakers to postpone their summer travel planning.

He went on to warn second half earnings would be hit amid tough trading over the key summer period. Mr Fankhauser also confirmed the cash-strapped group has received “multiple” bids for its airline, which was put up for sale in February to help shore up its finances. Related articles
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Airline scraps duty free on flights - will this affect you? Thomas Cook has faced tough trading and higher fuel expenses in recent months, leading to the company slashing costs further in the second half.

Cost-cutting measures have included axing 150 roles from its head office in Peterborough.It also signalled possible further store closures, having already announced plans in March to shut 21 stores and axe 320 retail roles.He said: “The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.

The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sunThomas Cook“The continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins.“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year.

”Thomas Cook now expects underlying earnings to fall over the second half and put pressure on full-year results - marking its third profit warning in less than a year.Mr Fankhauser said customers are “having a great deal this summer” as a price war rages in the sector.But the group confirmed it had secured a new additional £300 million financing deal with its lenders to help boost its balance sheet.

The firm has sold 57 percent of its summer holidays, while tour operator bookings are down 12 percent for the summer season.Its airline bookings are down six percent.
Thomas Cook issued a fresh profit warning as Brexit uncertainty spooked customers (Image: GETTY)Russ Mould, AJ Bell investment director, said Thomas Cook’s mounting woes raise the prospect of a possible bid for the firm.

.He said: “Times are tough for travel operators at the moment and the problem for Thomas Cook is that its ability to navigate a difficult market is hindered by its unwieldy borrowings.“Speculation over an emergency fundraise, which mounted at the end of 2018,.....

News Code: 169335  |  Express
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