Thomas Cook profits wilt as Britons sunbake at home

29th Nov 2018 10:00

(Sharecast News) - Travel operator Thomas Cook felt the heat in more ways than one on Thursday as full year pre-tax losses came in at £163m, compared to a profit of £9m last year.Earnings before interest and tax fell 23% to £250m, while sales were up 6% to £9.6bn as customers chose to stay at home and enjoy Britain's rare summer heat. The dividend was also suspended.Earnings at its tour operator unit were £88m lower in the year to September, as people delayed booking holidays. The company also took a £30m hit from writedowns related to airline and hotel failures, store closures and IT costs.Winter bookings were down 3% year on year.Chief executive Peter Fankhauser described 2018 as "disappointing year" for the company."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," he said."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."Fankhauser said despite the hot summer, Thomas Cook's Northern European tour operator achieved a "near record performance", albeit lower than that expected at the end of May."Meanwhile, our Group Airline delivered strong growth in customers and profit, up £35m, benefiting from increasing capacity in a turbulent European aviation sector."