Weak UK bookings hit Thomas Cook

11th Aug 2010 07:02

Package tour operator Thomas Cook warned that full-year profits will be at the low end of forecasts due to softer UK bookings and the weak euro."As we enter the final quarter, it is apparent that trading in the UK business is softer than expected and, at current rates, the recent weakening of the euro will have an adverse impact on translation of our euro-based earnings," said chief executive Manny Fontenla-Novoa."As a result, we now anticipate underlying operating profits for the full year (excluding the impact of the volcanic ash cloud) to be at the lower end of market expectations."The group also announced that the total financial impact from the Icelandic volcanic ash disruption is now estimated at £81.9m, topping its original estimate of £60-80m.In the three months ended 30 June, the group made a pre-tax loss of £116.6m compared to a profit of £2.9m last year. Underlying profit from operations fell to £25.8m from a restated £49.7m last year, after £28.8m lost contribution as a result of the volcanic ash. Revenue was down 9%, largely reflecting the remaining planned winter capacity reductions and the lost revenue associated with the volcanic ash cloud.Cumulative average selling prices in the UK are 3% ahead of last year, but they are not up as much as previously anticipated due to weaker booking trends in May and June. While bookings have improved since the end of the World Cup, price increases have not been sufficient to compensate for weaker bookings, the group said. UK bookings in the last 4 weeks were down 2%.Overall summer bookings have improved following some weakness in June as a result of the World Cup and exceptionally warm weather in its source markets, while initial trends for the winter 2010/11 season are encouraging. Thomas Cook's statement comes the day after rival TUI Travel's shares fell out of bed following a profit warning. TUI also warned profits this year will be at the low end of forecasts after UK bookings faltered.