Support Skift’s Independent JournalismMake a Contribution Now
Thomas Cook Group Plc said the impact of terror attacks in Tunisia, political and financial turmoil in Greece and the weakening of the euro will combine to wipe about 64 million pounds ($100 million) from full-year earnings.
Repatriating clients from Tunisia and rebooking others after June’s shooting will cost 20 million pounds, discounts on Greek travel are set to wipe out 5 million pounds and the slide of the euro and Swedish krona against the pound will cost 39 million pounds as takings from continental clients are converted to the U.K. currency, London-based Thomas Cook said Thursday.
“Our business has been impacted by significant external shocks,” Chief Executive Peter Fankhauser said in a statement, adding that summer bookings are down 3 percent in mainland Europe, 1 percent in the U.K. and are flat in Scandinavia. The company’s fiscal year runs through Sept. 30.
Fankhauser, CEO since November, is seeking to push through a new round of restructuring after predecessor Harriet Green was credited with rescuing the 175-year-old company by slashing costs following a request for emergency funding in 2011. A goal of growing annual profit by 500 million pounds by paring expenses is within reach, though plans to boost on-line bookings and add product lines are behind schedule, he said.
Shares of Thomas Cook fell as much as 3.5 percent and were trading 0.6 percent lower at 125.60 pence as of 9:35 a.m. in London. The stock has declined 1.8 percent this year, valuing the travel industry icon at 1.93 billion pounds.
Sales fell 12 percent to 1.95 billion pounds in the third- quarter ended June 30, mainly because of the exchange rate impact, Thomas Cook said. Earnings before interest and tax swung to 3 million pounds from a 42 million-pound loss, reflecting the cost-cutting drive, while debt was cut by more than a fifth.
This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network.