Shares in Thomas Cook have slumped by more than 30% after it issued its second profit warning in two months and suspended its dividend. The travel operator said it had suffered a "disappointing year" with the UK market particularly hard hit as hot summer weather saw demand melt away. Bookings for this winter are down 3%, the company added, partly blamed on "knock-on effects" from the heatwave. It has launched a shake-up including plans to improve returns from its network of UK high street outlets and cut back airline capacity next year. Shares closed 22% lower on Tuesday and are now down by almost 70% for the year to date. The warning also had an impact on shares of rival Tui, which fell almost 2.5%. Thomas Cook's unscheduled statement comes just two months after a previous profit warning and two days before the company had been due to issue results for the year to the end of September. The company now expects underlying operating profits of £250m, £58m lower than last year, pointing to a big fall in earnings for its tour operator business. It said its bottom line was hit by the cost of discounting on last-minute deals. Profits were also dragged lower by accounting write-downs on income from hotels plus disruption and restructuring costs. Chief executive Peter Fankhauser said: "2018 was a disappointing year for Thomas Cook, despite achieving some important milestones in our strategy for transforming the business. "After a good start to the year, we experienced a larger-than-anticipated decline in gross margin following the prolonged period of hot weather in our key summer trading period." Mr Fankhauser said that within the tour operating business the UK was "particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain". He added: "Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering. "We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant."
Shares in Thomas Cook fell by over 30% after the travel firm issued a second profits warning since September, citing a fall in demand due to the unusually hot UK summer. The surprise profit warning came just before the company issued results for 2018. The company expects a £58m ($74m) decrease in underlying operating profits YoY to £250m, largely due to its tour operator business losing earnings. Thomas Cook has also confirmed winter bookings are down 3%, largely due to the heatwave’s “knock-on effects”. Shares in the company have fallen nearly 70% during the nine months to September.