Thomas Cook reported a worse than expected decline in full-year operating profit and said it would close 200 of its underperforming shops in Britain, as it looks to reduce its debt and restore confidence among investors.
Europe's second biggest travel firm by sales, which secured a rescue package from its banks last month, said the move is part of a turnaround plan which will enable it to deliver annual profit improvements of 110 million pounds ($171 million).
The company, which had issued a string of profit warnings and went to its banks for 200 million pounds of additional funding in November, said its operating profit for the year to Dec. 14 fell by 58 million pounds to 304 million pounds.
In contrast, the world's biggest tour operator TUI Travel reported a better-than-expected full-year profit last week, boosted by strong online sales and demand for exclusive resorts.
Market expectations for Thomas Cook's full-year operating profit had ranged between 306 million pounds and 321 million pounds, with the average forecast standing at 316.7 million pounds, according to Thomson Reuters I/B/E/S data.
The company has been hit hard by tough trading conditions, especially in Britain, where its core customer base of families with young children has been particularly affected by tough economic conditions. It has also been impacted by unrest in popular destinations such as Egypt, Tunisia and Morocco.
Shares in Thomas Cook, which have lost over 90 percent of their value since March, closed on Tuesday at 15.02 pence, valuing the business at 132 million pounds.