Thomas Cook has cut its profit guidance for the second time in two months and suspended its dividend.
The travel company has been hurt by the heatwave that gripped northern Europe this year, deterring holiday makers from booking lucrative last minute deals and sending its shares down 70% in 12 months.
"I'm not happy with the financial result," chief executive Peter Fankhauser said. "This is not where we wanted to be."
Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia, seek the sun in southern European destinations such as Spain, Turkey and Greece.
However, record temperatures in much of northern Europe this year meant the company was forced to warn in July and September that demand for holidays had been damaged.
The company said on it had also taken around £30 million of charges to account for costs linked to changes to its business, flight disruptions and unpaid historic hotel bills.
More Hotels
Thomas Cook, which had rebuilt itself from a 2011 collapse when the euro zone debt crisis and political turmoil brought it to its knees, said it would push ahead with its strategy of opening its own hotels, which tend to drive higher returns and customer loyalty.
"Across the group, we will continue to streamline our cost base and manage our capacity to give us greater operational flexibility and financial discipline," Fankhauser said.
Year To September
The group said for the year to the end of September, its profit had fallen to £250 million, down £58 million on the previous year and below the £280 million it forecast in September.
Expecting Progress
For 2019 it said it expected to "deliver progress" on underlying operating profit. Analysts said this implied material downgrades to current consensus of £309 million.
Winter bookings are down 3% on last year, with flat pricing. UK bookings are flat, albeit at lower margins.
"The UK was particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain," the company said.
Thomas Cook said it was confident that its customers could travel without disruption at the end of March when Britain leaves the EU, but that it had seen signs of customers booking holidays during that period outside of the bloc.
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