(Press Association) Travel giant Thomas Cook has revealed a 40% plunge in UK earnings as it suffered amid “challenging” trading and a hit from the weak pound.
The holiday giant reported underlying earnings of £52m for the UK division in the year to September 30, down from £86m the previous year after it was knocked by rising hotel prices, the pound and intense competition in the Spanish market.
It also said its costs were sent surging after facing a torrent of fraudulent illness claims and after supporting 10,000 customers caught up in the devastating Hurricane Irma.
Shares in the group plunged as much as 13% after the results.
Turkey and Egypt
But the group said it has launched action to return its UK division to profitable growth once more by slashing costs, taking legal action against illness fraudsters and focusing on fast-growing holiday destinations Turkey and Egypt as demand returns to the countries.
The wider group enjoyed a better year, with pre-tax profits rising to £46 million from £34 million a year earlier thanks to a turnaround at its German airline Condor and improved customer demand.
Underlying earnings rose £24m to £330m.
Peter Fankhauser, chief executive of Thomas Cook, said: “2017 was a milestone year in the strategic development of Thomas Cook.
“By delivering what we promised on strategy, we’ve inspired more customers to choose our holidays for their hard-earned weeks in the sun.”
He added: “Looking to the year ahead, we can see real momentum in our Group Airline, and expect our Continental Europe and Northern Europe tour operator businesses to continue their good performance.
“While conditions are challenging in the UK, we have implemented a set of actions to improve performance.”