Thomas Cook warns UK hot spell will hit annual results

Thomas Cook warns UK hot spell will hit annual results

Thomas Cook has reported revenue grew ten per cent, to £2.48 billion, in the three months ended June 30th.

However, gross profit in the third quarter fell three per cent, to £443 million, when compared to the previous year.

Peter Fankhauser, chief executive of Thomas Cook, commented: “We have grown revenue strongly in the third quarter as more customers chose Thomas Cook for their holidays.

“I am pleased to see that the improvements we’ve made to our holidays are paying off through strong growth in both new and retained customers, at 12 per cent and five per cent respectively so far this year.”

Releasing the third quarter trading statement, Thomas Cook reported underlying EBIT was up eight per cent to £14 million.

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Summer bookings were also up 11 per cent on last year, with 79 per cent of the programme sold.

Fankhauser added: “Bookings for the summer are up 11 per cent overall, fuelled by strong growth in our Group Airline, in line with the planned increase in capacity, particularly in Germany.

“This has helped to offset a slowdown in package holiday bookings in recent weeks with customers across our European markets delaying decisions about their summer holidays as they enjoy the record temperatures at home.”

Thomas Cook this week earlier denied reports it planned to spin off Thomas Cook Airlines into a standalone company.

Looking ahead, however, Fankhauser warned profit for the year would come in at the lower end of expectations.

He continued: “It’s clear that we remain in a competitive environment, particularly in the UK where the growth in popularity of higher-margin destinations like Turkey and Egypt has not fully offset the continued pressure on margins to Spanish holidays.

“The sustained period of hot weather in June and July has led to a delay in customer bookings in the tour operator, restricting our ability to drive margins in the ‘lates’ market.

“Based on our current view, we now expect growth in full year underlying operating profit to be at the lower end of market expectations.”