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The Holiday group, Thomas Cook, lost 30% on Tuesday after posting its second profit warning in two months, saying its annual results would be affected by write-downs, additional costs and a "particularly disappointing" demand for bookings. late.
In a stock market update ahead of its full financial results, Thomas Cook said the underlying profit before interest and taxes for the year to September 30 would be £ 250 million, or £ 58 million less than last year, on a like-for-like basis. as many months.
In September, the group warned that the underlying lending for the year is expected to be around £ 280m, down from £ 40m to £ 50m, mainly because of the weakness of exchanges following the exceptionally hot climate in Europe. This caused shares to fall by a quarter.
Tuesday, Thomas Cook has revised this figure further, saying that ebit would suffer an additional loss of £ 30 million due to write-downs on receivables and additional costs.
Shares fell by 30% when opening in London, bringing their fall for the calendar year to 71%.
Of this amount, £ 10m related to 'transformation costs' – the closure of UK stores and advertising to encourage customers to connect online, and £ 4m related to the bankruptcy of the airlines Air Berlin and Niki – forcing Thomas Cook to replace himself. pbadenger flights.
Another £ 14 million related to the write-down of receivables, as Thomas Cook estimated that the amounts owed to him by various hotels would no longer be reimbursed.
The last 2 million pounds sterling was not specifically taken into account, but the group noted that UK demand and "particularly disappointing" for the UK and higher discount rates in the late book market – as announced in September – would have a negative impact of 88 million pounds on profits.
"The year 2018 has been disappointing for Thomas Cook, despite the milestones of our business transformation strategy. After a good start to the year, we recorded a larger-than-expected decline in gross margin due to the long period of hot weather in our key summer period, "said Managing Director Peter Fankhauser.
"The UK has been particularly affected by the very strong promotional activity adding to an already competitive market for holidays in Spain," he added.
Lower profits will come despite a 6% rise to £ 9.6 billion in comparable sales, the group said. The dividend for the full year has been suspended.
Thomas Cook said his priorities for 2019 were "to take into account the performance of our UK tour operator business," to foster operational efficiencies and cost savings, as well as "to improve the sales of Own brand hotels with higher margin ". In addition to 11 brand-name hotels this year, the group has announced that further openings were planned for 2019.
The group said it hoped to generate "progress" on the underlying EBIT in 2019 and that the reported operating profit would be a "primary goal for the future".
"In the future, we need to learn from 2018 and start the new year focusing on areas where we can make a difference for our customers in our main holiday offer. We will pay particular attention to the performance of our UK tour operator where the challenges of transformation in a competitive environment remain important, "said Fankhauser.
Shares of rival Tui holiday group also fell 4% Tuesday.
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