Monday 17 December 2018 1:04 pm

Thomas Cook boss Peter Fankhauser spends £50,000 on company shares

Reporter at City A.M. covering City politics, transport and law. Get in touch:

Reporter at City A.M. covering City politics, transport and law. Get in touch:

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Thomas Cook boss Peter Fankhauser has spent £50,000 on company shares as the tour operator continues to struggle with declines in its share price.

Shares were down nearly five per cent at the time of writing, following a set of disclosures to the London Stock Exchange (LSE).

Fankhauser paid 29p per share, higher than the current trading price of 27.24p.

In its annual report published today, the tour operator admitted that 2018 had been a year of "mixed fortunes".

Thomas Cook has seen its share price tumble from a peak of 120p to current levels after a series of profit warnings which the company blamed on prolonged periods of hot weather that kept its customers at home.

While Fankhauser received a pay rise in 2018, from £717,800 in 2017 to £732,100 this year, he did not receive his annual bonus due to financial hurdles not being met. Outgoing chief financial officer Bill Scott also did not pick up his bonus.

The company reported a £53m slump in profits before tax at the end of September, compared with a profit of £43m the previous year. Profit losses for the year as a whole totalled £163m in 2018, compared with a £9m profit in 2017.

Fankhauser said: "2018 was a disappointing year for Thomas Cook, despite achieving some important milestones in our strategy for transforming the business.

"After a good first six months of the year, we went into the summer with a positive position, confident of filling all our committed hotel accommodation and flight capacity at good returns. However, with the start of the heatwave in May, that demand tailed off in the fourth quarter, with customers across our European source markets delaying decisions about their summer holidays as they enjoyed record temperatures at home. This delay in bookings resulted in oversupply across the market and an even more competitive pricing environment than usual, restricting our ability to achieve the planned margins in the 'lates' booking period.

"While all our source markets were impacted, we saw a particular hit to our UK business where the slowdown in bookings came on top of an already competitive market for Spanish holidays."

Fanhauser said that for 2019 Thomas Cook would reduce its airline capacity to focus on "higher quality, higher-margin hotels and destinations".