Peterborough's Thomas Cook reveals a £1.5 billion loss as Brexit hits holiday bookings

Holiday giant Thomas Cook has crashed to a £1.46 billion half year loss as customers put holiday plans on hold.

Thursday, 16th May 2019, 12:32 pm
Thomas Cook has unveiled new financial losses.

The troubled travel operator, which yesterday announced 100 job cuts at its Peterborough head office, has blamed Brexit uncertainty for the slide in bookings.

The new losses are the latest in a string of poor performances revealed by the firm, which employs about 1,000 people at Westpoint, in Lynch Wood, as it struggles with changing customer demand, unseasonal weather, political events and competition.

Chief executive Peter Fankhauser said: "The first six months of this year have been characterised by an uncertain consumer environment across all our markets.

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"The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.

He warned: "As we look ahead to the remainder of the year, it's clear that the continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins."This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year."

Thomas Cook's figures for the six months to March 31, show sales fell to £3,019 million compared with 3,227 million for the same period last year.

During the same time its losses rose to £1,456 million compared to £303 million in the previous year.

The company's net debt has also soared - up to £1,247 million from £886 million last year.

It now expects underlying earnings to fall over the second half as holiday firms cut prices to boost Brexit-hit demand and costs of fuel and hotels rise.Mr Fankhauser said further cost savings are planned in the second half of the year to counter tougher trading and higher fuel expenses, following its decision in March to shut 21 stores and axe more than 300 retail roles.

The firm has confirmed "multiple" bids have been made for all or part of its airline, which was put up for sale in February to help shore up its finances, and said it was assessing the offers.

It has also secured an additional £300 million financing deal with its lenders to help boost its balance sheet.

It revealed a slump in customer numbers during the first half, down 295,000 to 2.9 million.

In a bid to revive its fortunes, Thomas Cook has put together a strategy for profitable growth.

Its focus is on improving customer care, enhancing facilities for online bookings, developing its highly profitable own-brand hotels and strengthening its operations in both China and Russia.