Thomas Cook says Brexit hitting holiday plans

Thomas Cook shopPicture copyright AFP

Journey agency Thomas Cook has warned of “further headwinds” for the remainder of the 12 months after reporting a £1.5bn loss for the primary half of the 12 months.

It mentioned there was “now little doubt” that Brexit had precipitated clients to delay their summer season holiday plans.

Some £1.1bn of the loss was attributable to the choice to write-down the worth of My Journey, the enterprise it merged with in 2007.

The agency additionally mentioned it had acquired “multiple” bids for its airline.

It sought bidders for its fleet of 103 jets because it sought extra funds for the enterprise, which has issued a sequence of earnings warnings which have sparked a plunged in its share value from 140p a 12 months in the past.

The primary half outcomes have been accompanied by its third earnings warning in lower than a 12 months, driving the shares down 17% at 18p, near lows they traded at in 2012 when it was in monetary issue.

Some 21 retail shops have been closed, Thomas Cook Cash, its forex arm, is beneath assessment and the corporate mentioned extra “cost efficiencies” have been deliberate.

The corporate mentioned extra of its 566 shops may shut as leases finish and that 150 roles could be reduce from its Peterborough head workplace.

Peter Fankhauser, chief government, mentioned that through the first six months of the 12 months there had been “an uncertain consumer environment across all our markets”.

“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer,” he added.

Journey firms often report a primary half loss – final 12 months’s was £303m – however this 12 months the loss was deeper due to the choice to revalue MyTravel “in light of the weak trading environment”. The companies merged in 2007.

‘Grim studying’

Mr Fankhauser mentioned that trying to the remainder of the 12 months “the continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins”.

“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year.”

Earnings within the second half of the 12 months could be decrease than the identical interval final 12 months, it mentioned.

The enterprise has reduce its capability in anticipation of a slowdown however mentioned it continued to “face intense competition, particularly in our UK business”.

Mr Fankhauser mentioned clients have been “having a great deal this summer”.

Laith Khalaf, senior analyst at Hargreaves Lansdown, mentioned the figures made “grim reading”.

“Thomas Cook’s scaled back the holidays it’s offering in response to lower consumer demand, but the competitive environment means that even so, it’s having to offer discounts to get customers to part with their cash,” he mentioned.

The underlying loss was £245m in contrast with a £170m loss a 12 months in the past, whereas the corporate has secured £300m of loans forward of the winter 2019/20 season.

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