Thomas Cook lost £31 per minute in the last financial year

One of Britain’s leading holiday companies lost £163m in the year to September – representing an average loss of £31 per minute.

Thomas Cook had made a modest profit of £9m in the previous financial year.

The firm’s chief executive, Peter Fankhauser, called it a “disappointing year”, attributing the loss to a “larger-than-anticipated decline in gross margin following the prolonged period of hot weather in our key summer trading period”.

The share price was little changed when the markets opened. Thomas Cook had released its second profits warning in two months on Tuesday, and the poor results were already priced in.

At the start of 2018, Thomas Cook was valued at over £2.5bn at the start of 2018; in the course of 11 months its market capitalisation has slumped by around £2bn to just £550m.

Net debt at the holiday company increased by £349m to £389m, which was blamed on “delayed bookings and higher non-cash items”.

No dividend will be paid to shareholders.

Mr Fankhauser said: “We delivered a strong first six months of the year, achieving improved financial results and going into the summer with a positive position. As a result, we were confident of filling all our committed hotel accommodation and flight capacity at good returns.”

But in late May the spell of long, hot weather began in northern Europe.

“Profit in our tour operating business fell £88 million as the sustained heatwave restricted our ability to achieve the planned margins in the last quarter,” he said.

Bookings for the current winter are 3 per cent down on last year, with no change to average selling prices – “largely reflecting knock-on effects from the hot summer weather and poor demand for the Canary Islands”, says the firm.

Thomas Cook reports strong demand for Turkey, Egypt and Tunisia “as customers seek alternatives to high hotel prices in the Canaries”.

Yet it is selling holidays to the Canaries in the coming week for under £200, including flights and accommodation.

The firm re-started holidays in Tunisia in February 2018, three years after the terrorist attack in which 30 British holidaymakers were killed in a massacre at the resort of Sousse.

The chief executive said: “Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering. We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant.”

Commitments to aircraft seats and hotel beds will reduce, with a move to “dynamically-packaged product” – typically flights with easyJet and accommodation sourced through “bed banks”.

In a move which Thomas Cook shop staff may interpret as a threat to their jobs, the firm said: “We want to increase the number of customers who book directly with Thomas Cook, with a focus on digital channels where our cost of sale is lower.”