UPDATE 2-Thomas Cook shares plunge on profit cut, dividend suspended

* Cuts profit outlook for second time in 2 months

* Shares down 30 percent, at 6 year lows (Adds details, reaction)

LONDON, Nov 27 (Reuters) - Thomas Cook lost a third of its value on Tuesday after the holiday operator cut its full-year profit forecast for the second time in two months and suspended its dividend following the hot British summer.

The oldest travel company in the world, Thomas Cook has been hammered in recent months by the heatwave that gripped northern Europe this year, deterring holiday makers from booking lucrative last minute deals.

Shares in the company were down 31 percent at 0824 GMT, at six year lows. Shares in rival TUI Group fell 8 percent.

Thomas Cook warned in July and September that the weather had hit demand in the most profitable part of the summer season and hurt winter trading, and the latest downgrade on Tuesday took its shares down 70 percent in the last 12 months.

"After a good start to the year, we experienced a larger-than-anticipated decline in gross margin following the prolonged period of hot weather in our key summer trading period," Chief Executive Peter Fankhauser said.

Bringing forward its results by two days, the company on Tuesday said underlying operating profit had fallen to 250 million pounds ($320 million) for the year to the end of September, down 58 million pounds on the previous year.

In September it had predicted an operating figure of 280 million pounds.

Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia go on holiday, mainly to warmer destinations in southern Europe such as Spain, Turkey and Greece.

Part of the hit came from 28 million pounds worth of legacy and non-recurring charges, due to transformation and disruption costs, and unpaid historic hotel bills.

"The UK was particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain," the company said. ($1 = 0.7823 pounds) (Reporting by Kate Holton, editing by Louise Heavens)