Tour company Thomas Cook warns on profits

[November 22, 2011]  LONDON (AP) -- Shares in tour company Thomas Cook lost two-thirds of their value after the company issued a profit warning Tuesday and said it was seeking new agreements with its principal banks, barely a month after announcing a renegotiation of its funding.

Thomas Cook Group PLC shares were down 67 percent at 13.67 pence in late morning trading, after falling as low as 10.17 pence earlier in the session. On July 1, shares had closed at 134.5 pence.

"Legitimate questions will be asked as to whether Thomas Cook can survive long-term," said James Hollins, analyst at Evolution Securities.

Thomas Cook, Europe's No. 2 tour operator behind TUI Travel PLC, announced that it was postponing publication of its full-year results "as a result of deterioration of trading in some areas of the business, and of its cash and liquidity position since its year end."

Cook has lost bookings because of unrest in Tunisia and Egypt and flooding in Bangkok.

"We're operating business as usual," said Sam Weihagen, Thomas Cook's interim chief executive. "Flights are leaving on schedule, shops are open and we're taking bookings."

Wyn Ellis, analyst at Numis Securities, said Thomas Cook's announcement could scare away some customers and alarm suppliers. The company, he said, "faces a difficult near-term future which could lead to significant loss of market share."

Analysts at Panmure Gordon & Co. believed "the group will need a major cash call from its shareholders."

[Associated Press]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.