Thomas Cook warns of £30m hit to profits after heatwave

Thomas Cook has warned of a £30 million hit to profits in an unscheduled announcement after the heatwave affected demand for its holidays.

The group said underlying earnings would be £250 million for the year to September 30, down £58 million on 2017.

This was put down to additional charges including flight disruption and transformation costs, as well as dwindling demand for its tour holidays amid the heatwave.

Group revenue was up 6% on a like-for-like basis, reaching £9.58 billion.

Earnings in the tour operator division dropped by £88 million due to a higher-than-anticipated decline in margins as Thomas Cook slashed prices to keep up with competitors.

The company said the warm weather in Europe meant many customers had delayed holiday-booking decisions, with the UK particularly slow.

Chief executive Peter Fankhauser said: “Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering.

“We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant.”

Thomas Cook said it will focus on driving awareness and take-up of its own brands in the UK during 2019, as well as increasing its flexibility and reducing costs.

Bookings for the upcoming winter season are currently down 3% in the tour operator division, but airline bookings are 11% ahead of last year