Struggling tour operator Thomas Cook has said it will suspend all further dividends while it seeks to rebuild its financial position.
In a trading update today, the UK-based firm said it was continuing to be hit by a fall in bookings in the United Kingdom and turmoil in the Middle East.
While the group delivered steady results for July and August, in line with expectations, September has been a more challenging month, particularly for French business, Thomas Cook said it a statement.
However, the company still expects to deliver a result broadly in line with market expectations.
Thomas Cook’s forward bookings for the 2011-12 winter season are currently mixed when compared with the same time last year.
They are down seven per cent in the UK, and 16 per cent lower in France, Belgium, the Netherlands and Eastern Europe, but up six per cent in Germany and Scandinavia.
The company presently has debts of around £900 million, which it will attempt to pay down in lieu of dividend payments.
Trouble at the Top
Thomas Cook has been rocked by a series of tremors in the travel trade this year.
A partial merger with the Co-operative Group has offered short-term respite to the group, but analysts are already stating Thomas Cook may be forced to merge with TUI AG of Germany as both continue to battle touch market conditions.