Thomas Cook’s share value plunged this morning following the company’s profits warning to the City of London.
Shares were trading below 91p an hour after the London Stock Exchange opened, down 32% from Monday’s close.
The sell-off followed the group’s 7am announcement that its third-quarter profits (for April-June) will be £5 million lower than forecast.
It took Thomas Cook’s total share value – its market capitalisation – to £1.08 billion, putting it marginally below the group’s net debt reported as £1.094 billion in May.
The downturn dragged rival Tui Travel’s shares down by 6.37% to 207.10p in early trading.
Thomas Cook blamed “difficult trading conditions” in the UK and the higher-than-forecast impact of unrest in the Middle East and North Africa.
The group continues to trade profitably for the year as a whole, but underlying earnings for the year could now be £40 million lower than in 2010.
It is understood senior departures are imminent as Thomas Cook promised “a fundamental review”.
The group is awaiting a Competition Commission ruling on its proposed retail merger with The Co-operative Group and Midlands Co-operative, a move that must now be in question.