Feb 8, 2018

Pain in Spain crimps profit margins for Thomas Cook

Profit margins at Thomas Cook has continued to suffer thanks to an increase to costs in delivering sun-soaked trips to Spain, in what the package tour operator describes "a highly competitive - and, at times, unpredictable - market." In the three months ending 31 December 2017, Thomas Cook said revenues increased to £1.3bn, up from £1.22bn a year earlier. There was a £22m loss in underlying earnings before interest, tax and amortisation - the period represents the company's quieter Winter season - a slight increase from a £21m earnings loss over the same quarter last year. Profit margins across the group fell by 50 basis points on a like-for-like basis, similar to the trend Thomas Cook suffered over last year's summer period where the demand for Spanish holidays from British tourists had increased costs. The company added that desire for trips to Spain is returning to "More normal levels," with customers also choosing holidays in the Eastern Mediterranean, indicating margin pressures may soon abate.

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