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Thomas Cook to close shops as losses mount

Thomas Cook to close shops as losses mount

Thomas Cook has announced losses of £398 million following the release of financial results for the year ended September 30th.

The struggling tour operator – which has seen its share price slip to 14 pence - blamed political unrest in Egypt and Tunisia earlier this year, while floods in Thailand also took a toll on results.

As a result of the losses Thomas Cook confirmed it would close 200 stores in the United Kingdom over the next two years - 125 more than previously announced.

More than 600 jobs are likely to go as a result.

Shares in the oldest tour operator in the world were down 4.5 per cent to 14.3 pence earlier this morning.

Prices fell by 70 per cent in a single day in November as the company revealed it was in talks with creditors.

Thomas Cook eventually secured a £200 million loan from banks, including Barclays, HSBC, RBS and UniCredit,

The new facility will expire on April 30th 2013.

“This has been a very challenging year for the group, despite which we still delivered an underlying operating profit of over £300 million,” said Thomas Cook chief executive Sam Weihagen.

“We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance.

“We continue to take action to substantially strengthen the balance sheet and the Board is undertaking a full strategic review.

“I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value.

Thomas Cook confirmed the sale of its stake in Spanish hotel group Hoteles Y Clubs De Vacaciones yesterday as it seeks to raise cash.

In the past year revenue increased eight per cent at constant currency to £9,809 million on volume, price and mix gains and benefits from acquisitions.

However, the results were at the bottom end of market expectations with Thomas Cook hit by exceptional charges of £573 million, which included write-downs in the value of its UK and Canadian business.