Thomas Cook’s share price drops after confirming £25m earnings hit followingTunisia attacks and ongoing Grexit fears

Thomas Cook's share price fell this morning after confirming the terror attack in Tunisia and ongoing concerns around a possible Grexit could lower full year earnings by £25m. 

The holiday group has reported its 12th consecutive quarter of improved profitability for the three months to 30 June, with operating profit up £53m, while net debt dropped by £111m to £392m. 

 

Summer holiday bookings to most destinations were “in line with expectations”, the firm added. 

 

The strong pound is also expected to hurt Thomas Cook's earnings to the tune of around £39m. 

 

The business acknowledged there would be considerable knock on effects from the tragic events at a tourist resort near Sousse, Tunisia on 26 June, in which 38 people were killed.  However Thomas Cook said it still expects full year growth. 

 

Despite that investors were clearly unconvinced about the outlook: Thomas Cook's share price was down 3.2 per cent in early trading. 

Thomas Cook appears to have shrugged off the negative publicity around its handling of the deaths of two children at one of its approved hotels in Corfu nine years ago. 

 

The group was heavily criticised in May for failing to apologise to parents Sharon Wood and Neil Shepherd, with former chief executive Harriet Green going on to donate £3m to a charity they had set up. This backfired, however, after it emerged the parents had not been consulted on the move once again.  

 

But the holiday group has been much harder hit by the aftermath of the Tunisia attack, although it has been seen as handling the situation well, evacuating more than 15,000 guests and offering special assistance teams for those affected. 

 

At the time Thomas Cook's share price took a hit, and today's announcement gives the first details of exactly how it has affected the company's bottom line. 

 

Chief executive Peter Fankhauser said: “Since the end of the third quarter, our business has been impacted by significant external shocks….  

 

“Our people have shown exemplary commitment during these crises, distinguishing Thomas Cook by personally contacting tens of thousands of customers, and amending and rebooking their holidays in just a few days.  It is the dedication of our people that make us one of the most popular travel brands in Europe. 

 

“While the impact of Tunisia and Greece will reduce our fourth quarter and full year profits, and in spite of foreign exchange headwinds, I have every confidence that our progress will continue, supported by the ongoing execution of our profitable growth strategy."

 

 

It was shaping up to be a strong year for Thomas Cook, despite its handling of the Corfu deaths. The events in Tunisia and Greece will take its toll on the business, but overall it is performing well.