Thomas Cook has reportedly told some of its suppliers they will have to wait longer to be paid.
The travel group sent a letter to suppliers of back office services six weeks ago telling them it would now be paying them in 90 days, as opposed to the 60-day period it had previously used, the Financial Times reported.
Cook said in the letter it was “developing new ways of working” and gave the suppliers little choice but to accept new terms.
Suppliers were also given strict requirements for filing invoices and told failure to comply would lead to their invoices being rejected.
They were also instructed to respond within 14 days to the letter informing them of the changes to the terms. The changes came into effect on October 13.
The group warned last week that it had become less bullish about trading conditions next year and was now forecasting growth “at a moderate pace”.
But the caution was largely overshadowed by last Wednesday’s announcement of the exit of chief executive Harriet Green. Hundreds of millions of pounds were wiped off the group’s value on that day as shares fell 18%.
Cook told the FT that said the change in supplier payment terms was not related to the tour operator’s worries about tougher trading conditions.
It said it had changed its “procurement process with our indirect suppliers in the UK as part of an ongoing strategy to put in place more efficient finance processes and drive our transformation”.
It added: “These changes included alterations to our payment terms and billing dates which will ensure that all our suppliers are paid on time, fairly and on equal terms.
“This forms part of our wider strategy to build a sustainable business and improve our efficiency around goods receipts and approvals. The overwhelming majority of suppliers have accepted these changes.”
One person with knowledge of the situation said the new terms were issued only to back office suppliers who represent a small proportion of the group’s suppliers, the newspaper reported. Direct suppliers, who make up the majority, are on a range of payment terms.
Cook’s share price rebounded slightly at the end of the week and closed up 2.18% on Friday at 121.80p.