News World Heatwave takes toll on Thomas Cook as holidaymakers delay booking

Heatwave takes toll on Thomas Cook as holidaymakers delay booking

British travel company Thomas Cook Group said a summer heatwave kept holidaymakers from booking last minute trips overseas and warned that annual profit would come in at the lower end of expectations.

But Thomas Cook said its airline business was growing strongly, particularly in Germany where it had added capacity, as it continues to benefit from the demise of Air Berlin last year, a trend also seen by German airline Lufthansa which also reported results on Tuesday.

The company denied a report in a British newspaper that it was considering splitting off its airline and selling a stake to an outside investor to reduce debt.

“We have no current plans to sell our airline,” CEO Peter Fankhauser told reporters on a call, although he did not rule out a future move.

“We have consistently said that we are open to play our part in the consolidation when it makes sense for our business,” he said.

Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia go on holiday, mainly to warmer destinations in southern Europe, such as Spain, Turkey and Greece.

But a heatwave has affected the company’s ability to extract higher margins from late bookings.

“Because of the weather, we have now in the market more capacity to sell for the late business,” Fankhauser said.

Thomas Cook said that as a result, full-year underlying operating profit would now be at the lower end of market expectations, from a 323 million pound ($424.26 million) to a 355 million pound range. In its last financial year, the 12 months to Sept. 30 2017, it made 330 million pounds.

Shares in Thomas Cook gained 3.9 percent to 100.7 pence at 0843 GMT. That represented a slight reversal of the 21 percent fall in the company’s stock over the last three months due to worries about the warm weather, compared with the mid-cap index which has risen 3 percent in the period.

Thomas Cook’s bigger rival TUI Group is due to report its third-quarter results on Aug. 9.

Jefferies analysts, who rate Thomas Cook a “buy”, cut their forecasts for annual earnings per share by 10 percent, but said the story remained positive in the longer term.

“This year’s abnormal weather does not affect our longer-term investment thesis, which remains unchanged,” they said.

Top Stories

UK helps employers with slow phase-in of job shield costs

British finance minister Rishi Sunak offered fresh help to employers hit by the coronavirus shutdown on Friday, announcing that future contributions they must make...

One new Covid-19 case from repatriations

There was one new Covid-19 case in Cyprus, the Health Ministry said on Friday, from a total of 2363 tests, bringing the total number...

Limassol: Dead body found in warehouse

  A body has been found in the light shaft of a warehouse on Nicos Georgiou street in Limassol, philenews reports. It said the body of...

Holy Synod to allow weddings during pre-Christmas fasting period

As a result of Covid-prompted wedding postponements, the Holy Synod has decided to allow wedding ceremonies during the pre-Christmas fasting period this year until...

President to discuss phase 3 with scientific advisors on Tuesday

  The team of scientists advising the government on the coronavirus outbreak are due to hold a new meeting with President Nicos Anastasiades on Tuesday...


Local cuisine: An introduction

Rich in fresh ingredients and tasty herbs, offers the very best of Mediterranean culinary delights. Head out to a tavern and feast on a...

Spiced lamb with beetroot salad and scented yoghurt

Lay the lamb on a tray, skin side down. Rub with crushed garlic, sprinkle with spices and ground pistachios, wrap in plastic wrap and...

Easy seafood pasta with white wine sauce

Ingredients: 2-3 tbsp olive oil 1 garlic clove, chopped 2-3 tablespoons of whipped cream 1/3 cup white wine 300g spaghetti, roughly broken 300-400g of...

Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...