Ailing Thomas Cook Group (TCG) on Thursday put its airline up for sale in a bid to raise more than £1 billion to pay down debt after one of the worst years in its history. The holiday giant played down suggestions last year it could sell its 103 aircraft, breaking up the company. Today it said it had begun a “strategic” review of the airline to “increase financial flexibility and accelerate execution of our core strategy”. It could sell all, or just part, of the airline arm. Investors enjoyed a 13% bounce in the battered shares to 35p. They were nearer 130p back in November 2014 when then chief executive Harriet Green was ousted amid a whispering campaign about her suitability to lead a large company. Industry experts say Cook’s planes could be picked up by aircraft leasing companies, but note the tough market for sellers. Many airlines are going bust or close to collapse, and thus keen to sell planes at depressed values. City analysts think Thomas Cook’s present finances are simply unsustainable. Last year it made profits of just £12 million on sales of £9 billion.
Petrofac ex-manager David Lufkin admits bribe charges as SFO investigation continues. Oil firm Petrofac Ltd. (PFC) was hammered today after a former executive pleaded guilty to 11 counts of bribery as part of an ongoing Serious Fraud Order investigation into the company. David Lufkin, 51, ex-global head of sales for Petrofac, entered his pleas at Westminster Magistrates’ Court yesterday. The indictments relate to “corrupt offers” made to influence the award of contracts to Petrofac worth in excess of $730 million (£565.9 million) in Iraq and more than $3.5 billion in Saudi Arabia. The SFO investigation has already wiped billions from Petrofac’s share price and it lost another 14% today, down 80p at 478p. The SFO said its probe will continue into Petrofac’s use of agents in multiple jurisdictions, including Iraq and Saudi Arabia. Lufkin will be sentenced later.
Insurer Beazley (BEZ) buffeted by disasters and Fed rate hikes as profits slide 55%. US rate rises and weather-related disasters hammered Lloyd’s of London insurer Beazley last year, leading to sharply lower profits. It said 2019 should be better after pricing started to come out of the doldrums. The Lloyd’s syndicate-owner said its $5 billion (£3.9 billion)-plus investment book generated almost $100 million less than a year ago after bond prices fell following Federal Reserve rate hikes. The Fed, which has come under fire from President Donald Trump, triggered losses in the bond market after hiking rates four times in 2018. Beazley invests about £8 in every £10 in bonds, leading to a lower 0.8% return versus 2.9% in 2017.
Bellway records rise in buyers pulling out of home deals. The number of would-be homebuyers pulling out of deals is creeping higher in the run-up to Brexit, housebuilder Bellway (BWY) said on Thursday. The FTSE 250 business said cancellation rates rose to 13% in the six months to January 31, up from 11% a year earlier. Bellway’s finance chief Keith Adey said: “This reflects a slight nervousness in the economy ahead of the UK’s looming departure from the EU. It is to be expected.” The company has been using some incentives to entice buyers, particularly for more expensive properties, including agreeing to cover stamp duty costs and upgrading kitchen appliances for nothing. Those sweeteners to get deals over the line — coupled with good mortgage terms and the Government’s Help to Buy scheme — helped first-half revenues rise 12% to almost £1.5 billion.
