Thousands of small investors in Thomas Cook Group (TCG) are furious after being wiped out by its demise. One group which represents individual investors is considering whether there are grounds to sue the auditors after their shares were left worthless, brandishing the collapse of one of the UK’s oldest tour operators ‘disgraceful’. While small investors are nursing their losses, the collapse of the 178 year-old Peterborough-based travel company is another crushing blow for the High Street, with more than 550 stores expected to close, hitting up to 9,000 UK jobs. A total of 21,000 jobs around the world are at risk after the company’s collapse in the early hours of yesterday morning when a complex rescue deal between its banks and largest shareholder, Chinese investor Fosun, broke down.
Metro Bank (MTRO) has been dealt another blow after having to shelve a £200million fundraising due to a lack of demand from investors. The lender, which was rocked by an accounting scandal earlier this year, last night announced it had pulled the bond issue after receiving just £175million worth of commitments. This was despite the bonds offering a generous 7.5% yield to investors – much more than other UK banks have recently paid out, at a time when bond yields are stubbornly low. The pressure is now on for Metro Bank, which is also looking for a chairman, to raise the funds so that it can meet EU regulations known as MREL by the deadline of January 1 2020. MREL requires banks to hold an extra buffer of money so that in the event of a financial crisis they could run down in an orderly fashion rather than just collapsing.
Orders for Crossword Cybersecurity plc (CCS) product Rizikon Assurance doubled between January and June, while revenue rose 5% to £570,757 – but losses widened from £824,000 to £1.1million due to investment in marketing and development. Chaired by former MI6 chief Sir Richard Dearlove, the firm will unveil its second product by the end of 2019 and cryptically said it is aiming to close ‘several large opportunities’ in the next few months too.
In what will be interpreted by the City as some much-needed firefighting, Burford Capital (BUR) released a 45-page briefing for investors on its website that seeks to answer some of the questions it has been facing. The briefing showed that Burford is good – and perhaps even conservative – at estimating how much profit it expects to bring in from each case. On the downside, investors are still in the dark about what proportion of profits a huge case in Argentina accounts for. The move towards greater transparency and accountability was welcomed by investors.
Wetherspoon (J.D.) (JDW) was unmoved by an increase to its target price from 1400p to 1750p from Berenberg brokers, who say it could be in line to benefit from higher earnings from fruit machines. Regulations that have cut down the amount punters can stake on fixed-odds betting terminals (FOBTs) has hammered gambling companies but, analysts say, with their low labour costs, could be a boon to pubs.
Petra Diamonds Ltd.(DI) (PDL) edged up after unearthing a 20.08-carat rare blue diamond from its Cullinan mine in South Africa, the source of two of the largest diamonds in the Crown Jewels. And Berenberg analysts upgraded Petra’s stock from ‘sell’ to ‘hold’, arguing its shares fell after full-year results last week because of worries about the global diamond industry rather than Petra’s performance, per se.
Smiths Group (SMIN) dropped a further 79p, to 1559p, after reporting on Friday that profits had slid in its catheter-making medical division, which it is planning to demerge and spin off as a separate company.
Low & Bonar (LWB) almost doubled its value as traders celebrated a 15.5p per share cash offer from Germany’s Freudenberg. Low & Bonar announced the £107million takeover after the market closed on Friday, which is usually a time companies sneak out bad news.
Northgate (NTG) revved up 17.5p, to 320p after new chairman Avril Palmer-Baunack kicked off a strategic review of the van and lorry hire group’s growth options.
