Thomas Cook has posted a half-year loss of £1.46bn after Brexit uncertainty caused British holidaymakers to cancel or delay their travel plans.
Shares opened 21% lower after the travel agent forecast “challenging” trading over the peak summer season, which could dent profits for the remainder of the financial year. Although the shares later partly recovered, they were still 15% lower in lunchtime trading.
Thomas Cook blamed uncertainty over Britain's exit from the EU for “softer demand for summer holidays across the industry”.
Chief executive Peter Fankhauser said: “There is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for the summer.”
However, other factors for the loss have been cited. Strong competition from rivals meant Thomas Cook had to increase cut-price offers. It is also believed that the prolonged heatwave and high prices in the Canaries reduced customer demand for winter sun.
The BBC points out that some £1.1bn of the loss was caused by the decision to write-down the value of My Travel, the business it merged with in 2007. The Financial Times looks at the challenges facing the company and says Thomas Cook has got problems “by the bucket load”.
Analysts from Jefferies point to wider issues facing the industry, saying: “Bookings are trailing capacity cuts in both Continental Europe and Northern Europe, with weak macro backdrops in Germany and Sweden”.
Although the half-year result includes the winter period when travel agents usually struggle to turn a profit, the jaw-dropping loss was several times larger than the loss of £303 million for the same period a year ago.
Looking ahead, Fankhauser said that “continued competitive pressure resulting from consumer uncertainty” combined with higher costs for fuel and hotels was “creating further headwinds to our progress over the remainder of the year”.
Commenting on the discussion around Thomas Cook’s finances, the Daily Telegraph said: “Amid all of the noise about bolstering the balance sheet, one could be forgiven for forgetting there's a business to run.”
from Featured Articles http://bit.ly/2LPtOjW
via Latest News in UK
No comments:
Post a Comment