Thomas Cook shares plunge after second profit warning in two months

Travel agent Thomas Cook’s shares took a hammering on Monday as the UK’s glorious summer triggered another profit warning and its finance chief headed for the exit.

The holiday group blamed the summer heatwave for a drop in its full-year profit forecast — it now expects to make £280 million below the £323 million it previously expected. Shares plunged 25%, or 19.5p, to 58.6p while shares in main rival TUI were also down 2.5%.

Its chief financial officer Bill Scott leaves in November after only eight months in the role. Sten Daugaard, on the board of Thomas Cook’s German business, will replace Scott until a permanent successor is found.

The company warned in July that it expected profits for the year to be “at the lower end of market expectations” due to more people staying at home. It usually makes most of its annual profits during summer. But people chose not to go away.

And although total bookings were up 12% compared to the time last year, they were 5% cheaper in August and September as the firm cut prices to tempt holidaymakers. Chief executive Peter Fankhauser admitted that recent performance “is clearly disappointing”. But he said the impact of the hot summer in northern Europe “is continuing to be felt into winter trading”.

“Assuming a more normal trading environment we would expect some of this year’s shortfall to be recovered, although the winter is likely to be tougher,” said Shore Capital’s Greg Johnson. The analysts downgraded the stock from ‘Buy’ to ‘Hold’.

Thomas Cook has been opening a string of boutique hotels — Cook’s Clubs — on the Continent and is signing its own-brand hotel in China.