THOMAS Cook saw its share price plummet yesterday after it issued a profit warning triggered by unrest in the Middle East and North Africa and belt-tightening in the UK.
Europe’s second biggest travel firm said full-year profits will be £60m lower than previously expected – triggering a share price drop of almost a third.
The company is now estimating profit for the year to 30 September of around £320m while the City had pencilled in a figure of £380m.
Tourist destinations such as Tunisia, Egypt and Morocco have been hit by political unrest and the company’s French business has also been badly affected.
But two-thirds of the profit shortfall was attributed to tough trading conditions in the UK. The company said it would carry out a “fundamental strategic and operational review” of its UK arm.
Manny Fontenla-Novoa, chief executive, said that the company could not significantly raise the price of holidays to shore up profit.
“It is impossible to pass on rising costs to consumers in this environment,” he said.
However, Thomas Cook said average UK selling prices for summer holidays were up four per cent as more customers bought packages that included food.
Despite the “difficult trading conditions”, bookings by UK customers are up by one per cent for the key summer season.
The number of holidays Thomas Cook has left to sell is five per cent lower than a year ago, but this is partly because it has reduced the number of packages on offer.
Shares in Thomas Cook closed down 28 per cent at 34.85p.