Thomas Cook saw its share price nosedive on Monday morning after it announced a poor set of full year results which precipitated its stock fall more than 30% to 34p a share, down from 48p at open.
In its full year results, the company issued its second profit warning of 2018, with underlying earnings coming in at £250 million, down by £58 million compared with the previous year, after the business was hit by £52 million in write-downs and additional costs.
Thomas Cook has ‘disappointing’ 2018
According to Thomas Cook’s Group CEO Peter Frankhauser, ‘2018 was a disappointing year’ for the company, despite taking some important steps in transforming the business.
The company’s tour operating business saw profits decline by £88 million following the sustained summer heatwave restricted its ability to hit planned margins in its third quarter, Frankhauser said.
A less than perfect set of results has led the Thomas Cook to suspend its dividend for the fiscal year. In 2017, the company set a 0.6p per share dividend that resulted in a cash redemption of around £9 million paid during 2018.
CEO focused on growth
Despite the disappointing financial performance, 2018 was a year of good strategic progress for Thomas Cook, with the company establishing its hotel investment fund and opening 11 new hotels.
The business also launched a new alliance with Expedia in five key markets in a bid to give customers more choice at a lower cost to the company.
‘Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering,’ Frankhauser said.
‘Across the Group, we will continue to streamline our cost base and manage our capacity to give us greater operational flexibility and financial discipline, while focusing the team on delivering performance improvements and giving customers more reasons to holiday with Thomas Cook,’ he added.