Thomas Cook tanks as it says FY earnings to be at bottom of range

19th May 2016 07:57

(ShareCast News) - Shares in Thomas Cook tanked on Thursday after the tour operated posted a narrower loss for the first half of the year but said summer bookings were down 5% and underlying earnings for the year are expected to be at the lower end of market views.The company posted a loss before tax for the six months to the end of March of £288m versus a loss of £303m in the same period last year, on revenue of £2.67bn versus £2.74bn.Chief executive Peter Fankhauser said: ""Thomas Cook has made significant progress in the last six months. Despite disruption in some of our key markets, we've managed to slightly grow our revenues on a like-for-like basis, having anticipated the shift in demand away from Turkey, Tunisia and Egypt and into the Western Mediterranean and long haul destinations."At the same time, we've increased our underlying gross margin by 10 basis points thanks to our focus on selling higher quality holidays. The launch of Casa Cook in Rhodes this month is a great example of how we are widening our appeal to independent, style-conscious travellers."The company said it was trading well to destinations other than Turkey, with strong bookings to Spain and the US.Demand for Turkey, however, its second-largest market last year, is still significantly below last year's levels.In addition, demand in Belgium has dropped following the attack at Brussels airport in March. As a result, the company now expects underlying earnings before interest and tax for the full year of £310m to £335m. This compares to a current range of analyst estimates of between £310m and £359m.Summer bookings to destinations excluding Turkey were up 6% compared to last year, but bookings for summer 2016 are currently down 5% overall, the company said.Thomas Cook said it continues to expect to pay a dividend in respect of the current year's earnings.At 0815 BST, Thomas Cook shares were down 15% to 76.12p.