 | Former bosses of Thomas Cook Group (TCG), its auditors and financial regulators are to face public questions from MPs about its collapse. The Commons business, energy and industrial strategy committee will investigate Thomas Cook as concerns grow over its executives’ pay, accounting practices and the role of its auditors. The committee, chaired by the Labour MP Rachel Reeves, said its inquiry would seek to question executives including the chief executive, the finance director and the chairman, its auditors, PWC and EY, the Financial Reporting Council and the Insolvency Service. |
  | Big Tobacco bosses met senior public health officials and politicians in Washington this week to discuss the future of the industry amid turmoil in the crucial vaping growth market. There was one absentee. Alison Cooper, chief executive of Imperial Brands (IMB), pulled out of a keynote speech at the annual Global Tobacco & Nicotine Forum to remain in Britain to issue a profit warning to the City yesterday. Ms Cooper, 53, warned in a downbeat trading update that increased regulatory uncertainty had led to a “marked slowdown” in the US vaping market and that a growing number of wholesalers and retailers were not ordering or allowing promotion of vaping products. With a number of US states, India and the retail giant Walmart moving ahead with vaping sales bans, the Trump administration threatening to outlaw flavoured e-cigarettes and health officials recommending people stop vaping amid an investigation into lung illnesses and deaths, the future of e-cigarettes in the American market has been thrown into doubt. Jack Bowles, the new boss of British American Tobacco (BATS), which owns the Vype e-cigarette, announced plans this month to cut about 2,300 jobs as it focuses on its vaping business. The growth of the market is potentially critical to the long-term future of tobacco companies, who have faced years of pressure on core cigarette sales from tighter regulation and criticism from public health campaigners. |
 | Industrial action by pilots at British Airways will knock €137 million off the operating profits of its owner, International Consolidated Airlines Group SA (CDI) (IAG). This month’s strike over pay, the first by British Airways pilots, led to the cancellation of 2,325 flights and disrupted travel plans for tens of thousands of passengers. Shares fell to 461p after it estimated the net hit from the action at €137 million, plus a further €33 million due to other disruption that affected British Airways in the quarter, including threatened strikes by Heathrow staff. |
 | Pearson (PSON) has warned that sales of its US university textbooks will fall by a fifth this year, wiping more than £1 billion off its stock market value. The publisher, which is in the midst of a prolonged overhaul designed to boost sales of digital learning tools, warned that trading at its American higher level business had been much weaker than forecast. US students had bought far fewer textbooks than expected when they returned to their universities and colleges after the summer break, it said. The warning rekindled fears over a transformation plan that, as recently as July, appeared to be bearing fruit. “This is a disappointment and painful and we’re in no doubt that it’s a difficult day for shareholders,” John Fallon, chief executive, said. “However, it does help us get to the future state more quickly.” |
 | The higher cost of fuel and tensions in the Gulf after this month’s drone attacks on Saudi Arabian oil facilities have taken their toll on Carnival (CCL) as the cruise operator lowered its full-year profit forecast. In June the leisure company’s business with Cuba came to a halt after the US imposed a ban on trips to the island. |
 | Neil Woodford has suffered a further setback after the investment trust he manages cut the value of its stakes in three private companies by £28 million. Woodford Patient Capital Trust (WPCT) blamed a “challenging fundraising environment” for the writedown on the trio of investments, which it declined to name. It said the downgrades would wipe 3.1p from its net assets per share, which last night stood at 67.93p. The admission comes a fortnight after it cut £36 million from the value of its holding in Benevolent AI, a developer of artificial intelligence software, whose valuation halved in a recent funding round. |
 | OnTheMarket plc (OTMP) issued a surprise warning on revenue, blaming the Brexit-driven slowdown in the housing market. In an unscheduled trading update, the company said that it has converted “fewer” agents than planned to long-term contracts. “Agents are facing well-documented difficulties with lower than usual transaction volumes, reduced letting fee income, the possible onset of recession, the prospect of a no-deal Brexit and a strong sense of uncertainty and a ‘wait and see’ approach among buyers and sellers,” the company said. “These circumstances have given rise to a much more challenging backdrop against which to convert agents on to full-tariff paying contracts.” The company said that revenue and profit for the next two years would be below market expectations. |
  | The highly-rated chief financial officer at Debenhams (DEB) has been poached by the fashion brand Ted Baker (TED). Rachel Osborne was the only board member of Debenhams that Mike Ashley, the founder of Sports Direct, wanted to keep as he tried to oust directors. Ms Osborne, 54, has a degree in veterinary medicine from the University of Cambridge. She joined Debenhams just over a year ago, having worked as finance chief for Domino’s Pizza for two years. |
 | Barclays (BARC) has recruited the former boss of Pimco and a senior executive in George Soros’s investment empire as non-executive directors. Mohamed El-Erian, chief economic adviser at Allianz, owner of Pimco, will join Barclays in January. Mr El-Erian, 61, served as chief executive of Pimco, the world’s second largest bond fund manager, between 2007 and 2014. The bank has also hired Dawn Fitzpatrick, 49, who oversees $25 billion worth of assets as chief investment officer at Soros Fund Management. The appointments follow pressure from Edward Bramson, the New York-based activist investor, for a shake-up. |
 | Xaar (XAR) lost more than a third of its value yesterday after revealing a management exodus and poor results. Doug Edwards, chief executive, and three other senior board members are to leave the company. Xaar said that Mr Edwards, 58, would step down at the end of the year to “explore opportunities back in the USA where his home and family are located”. He will be replaced by John Mills, 50, head of the firm’s printhead business unit. Robin Williams, 62, Xaar’s chairman, and the chief financial officer, Shomit Kenkare, 48, are also leaving. Margaret Rice-Jones, 58, the senior independent director, said that she would not seek re-election at the company’s 2020 annual meeting and so will leave the board at that time. |
 | Alfa Financial Software Holdings (ALFA) has blamed political uncertainties for a sharp fall in profits. The figures were in line with a profit warning last week that prompted a share price fall. Andrew Denton, chief executive, said customers had less “discretionary spending” due to the uncertain political and economic backdrop, with the company hit by delays to projects. Profit margins were further squeezed by the rising cost of hiring skilled workers. |
 | The chief executive of Mitchells & Butlers (MAB) said the pubs takeover frenzy was good for the sector but shrugged off speculation that the All Bar One operator could be the next target. Phil Urban, 56, said the bids for Ei Group and Greene King had highlighted the value in pub businesses, adding: “It’s good that the wider world is looking at the sector again.” Asked whether M&B could become the next target, he said: “Who knows? We’ve got a strong shareholder base and supportive board.” |
 | Shore Capital Group Ltd. (SGR), one of the bastions of Aim, has revealed plans to delist its shares from the junior market. Shore was founded in 1985, since when it has established itself as one of the top players on Aim, advising smaller firms that are looking raise money, make acquisitions or go public. Bosses feel the shares have been undervalued by investors, while the costs and distraction associated with being a public company outweigh any benefit, especially when it has no need to tap the market for extra cash. Members of the board and senior management now own two-thirds of the business, having taken advantage of the “undervaluation” to add to their stakes. The shares are due to be cancelled on November 1, although this will require the approval of 75% of shareholders at a general meeting in Guernsey next month. Investors will still be able to trade Shore’s shares on the Bermuda Stock Exchange, where it will retain its listing. |
 | Marks & Spencer Group (MKS) chairman, Archie Norman, took advantage of the retailer’s recent fall in value to buy £100,000 of shares, although that wasn’t enough to prevent the stock from falling to 180¼p. M&S fell in its first week as a FTSE 250 company, after the departure of the chief financial officer Humphrey Singer on Monday left it looking for its fourth finance boss in five years. |
| Barclays (BARC) is telling its clients to switch out of stocks and invest in bonds — at least for the next few months. The bank’s analysts have been bullish on riskier investments, such as equities this year, with American and European indices enjoying double-digit gains over the past nine months. But they are now advising a more defensive approach and favour fixed income investments such as bonds over stocks and shares. The analysts expect the global economy to grow 50 basis points slower in 2019 than it did last year. Things are unlikely to pick up in 2020 either, they argue, although they envisage a slowdown rather than an outright recession. As for where to put your money, Barclays points to emerging market dollar debt and US corporate bonds rather than German and Japanese bonds, which have negative yields. |
 | Tempus – CRH (CRH): Hold. Resilient and diversified business well placed to benefit from US construction boom |
 | Tempus – Coats Group (COA): Avoid. Interesting company but the shares seem stuck with little catalyst for change |
 | Virgin and Wizz Air Holdings (WIZZ) eye Thomas Cook Group (TCG) Gatwick slots. Take-off and landing assets likely to fuel bidding war as airlines seek extra capacity |
| Lombard – The name’s bond, very expensive Aston Martin Holdings (AML) bond. Carmaker has issued a type of debt that signals a company teetering on the edge | |
 | Prudential (PRU) offers £100m sweetener for M&G spin-off. One-off payout pitched for investors in newly independent asset manager and insurer |
| Unions denounce Thomas Cook Group (TCG) collapse as ‘national scandal’. UK government’s loan refusal under scrutiny after Berlin rescues group’s Condor airline |
 | Sainsbury (J) (SBRY) reveals £500m cost cuts after failed Asda bid. Supermarket’s plan B includes shrinking pension contributions and reducing support for its bank |
| Aston Martin Holdings (AML) hit by steep borrowing costs for bond sale. Fundraising aims to cushion carmaker against Brexit and help launch its first sport utility vehicle |
| Prudential (PRU) is set to shell out £350million on spinning off its M&G arm into a separate business. The company will pay £75million to its advisers, including investment banks Goldman Sachs and Rothschild, £141million to debt holders and £135million in other costs as it hives off M&G. But investors will reap a £1.3billion windfall in total, as the businesses hand out dividends to keep shareholders on-side following the demerger. The separated M&G business, whose shares begin trading on October 21 when the split takes place, will pay a £310million dividend next May, plus an extra £100million dividend related to the deal. Prudential, which will remain listed on the London Stock Exchange, will pay out £185million next May, which M&G gave it prior to the demerger, as well as the remaining £750million. |
 | Britain’s largest supermarkets have announced a change of tack in the battle to fend off discounters Aldi and Lidl. Sainsbury (J) (SBRY) will close 125 stores to cut costs and shift focus on to convenience stores as a plan B after its failed merger with Asda. Amid struggling sales, it hopes to find £500million of savings over five years by knitting the food business more closely to Argos, which it owns. Tesco (TSCO) said it was converting one of its experimental Jack’s branded stores back to a Tesco. The outlet in Rawtenstall, east Lancashire, is now being turned back into a Tesco, which said it was pressing ahead with the new format elsewhere, opening three more Jack’s stores by Christmas, taking the total number to 12. Both Tesco and Sainsbury’s are under enormous pressure by the march of Lidl and Aldi, who last week posted record sales. Aldi is to expand to 1,200 stores by 2025, just 200 fewer than Sainsbury’s, and launch an assault on the convenience store market. |
| Aston Martin Holdings (AML) shares fell after the car maker raised $150million (£121million) through a bond sale in a bid to boost its finances and help develop and build its first SUV – the DBX. The group is going to have to pay 12% interest on the bonds each year until they mature in 2022, at which point it will have to pay back the full amount. The car maker also has an option to receive another $100million (£81million) at a rate of 15 per cent interest if needed. But the move has raised questions over the health of the group’s finances, sending shares falling 5.2% to 544.8p in afternoon trading. Russ Mould, investment director at stockbroker AJ Bell, said the ‘very high’ borrowing rates were a sign that the company really needed the money and ‘had to bow to investors’ demands’. | |
 | Hornby (HRN) is finally getting its mojo back, issuing a tongue-in-cheek update after its sales climbed between April and August. Hornby, which dates back to 1901, took a swipe at British politics as it said it regretted not producing a Brexit-themed model. It said: ‘Our new grasp of social media has shown us that people are passionate about sharing their views on the topic [of Brexit]. ‘If the situation persists, we have plans for a locomotive that reliably gets stuck between stations.’ |
 | Sales at Boohoo.com (BOO) surpassed £1billion over the past 12 months as the company continued to defy the retail sector gloom with an ‘outstanding’ performance. The fast fashion company posted another set of stellar results and boss John Lyttle said Boohoo was entering the second half of the year ‘well placed and confident’. Sales rose to £564.9million in the six months to the end of August, helping full-year revenues top the £1billion mark, while pre-tax profits surged to £45.2million. Lyttle said it had been a ‘fantastic’ first half of the year for the group. ‘We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded £1billion in the last 12 months.’ |
 | Shares in Chariot Oil & Gas Ltd. (CHAR) have tumbled despite the explorer successfully managing to narrow losses. The stock fell 0.42p, to 3.2p after the firm booked first-half losses of £1.5million. That was down from a shortfall of £1.7million in the same period a year earlier. The AIM-listed company operates in Namibia, Morocco and in the Barreirinhas Basin, off the coast of Brazil. |
 | Earlier this year, a slew of US business tycoons and other investors ploughed £375million into Metro Bank (MTRO) to shore up its finances. Weeks earlier, the bank had admitted an accounting error that saw it misclassify the riskiness of some loans. Though that confession wiped £1.5billion off its market value, shares have continued to slide. The investors who bought shares through its emergency fundraising in May did so at 500p apiece – the stock is now worth just 169.3p. This means that the value of the new shares has already tumbled almost £250million in just under five months. Vernon Hill, the bank’s American founder, stumped up £5million and is now sitting on a paper loss of £3.3million. But the investors who helped Metro out in May already owned hefty stakes in the lender. In total, Metro’s top nine shareholders who decided to put in more money have seen the value of their combined stakes fall by £407million. Yesterday, there was more speculation that Metro, which in 2010 became the first new bank to open on the UK’s high streets for more than a century, may have to put itself up for sale. |
 | Investors piled into Babcock International Group (BAB) as the defence contractor hailed the continued success of its warship business. Shares rose to 575.6p, making it the biggest riser in the FTSE 350, after it said it has seen ‘increased activity’ across the UK warship arm. The new HMS Prince of Wales aircraft carrier set sail from Babcock’s Rosyth dockyard for the first time last week to undergo extensive sea trials. Babcock is also working on the Royal Navy’s Type 23 frigates and recently won the contract to build five Type 31 frigates for the Royal Navy for £1.25bn. It secures hundreds of jobs at the Scottish dockyard, where the ships will be assembled between now and 2027. With trading ‘in line with our expectations’, Babcock said it was on course to hit sales and profits targets outlined in May. |
 | PZ Cussons (PZC) has said UK sales remain under pressure amid consumer uncertainty and heavy discounting in the market. UK revenues fell in its first quarter and the group added it expects market conditions to ‘remain challenging’ but expects improvement in the second half. |
 | Spitfire and Bishops Finger brewer Shepherd Neame (SHEP) has reported pre-tax profits tumbling to £3.5million in the year to June 29, from £12.1million the previous year. Britain’s oldest brewer saw its bottom line hit by one-off refinancing costs, as well as the end of contracts with grocery chain Lidl and Japanese brewing rival Asahi. |
| Some of the world’s richest businessmen have lost almost £400m in just five months after stepping in to shore up ailing Metro Bank (MTRO). Billionaire hedge fund chief Steven Cohen was among those to bag what analysts dubbed “a bargain” during the bank’s cash call in May when it issued stock at 500p a share. But Metro’s shares plummeted again this week after the bank was forced to cancel a bond sale due to a lack of investor interest. The stock is now worth just 187p, a record low – meaning backers have suffered a further plunge in the value of their stock. |
| Thomas Cook Group (TCG) bosses could be stripped of their bonuses, Transport Secretary Grant Shapps has said – as it emerged executives secretly discussed putting the firm into administration two months ago as a last resort. Amid a growing backlash over the collapse of the business Mr Shapps said that investigators probing what happened could seek to recover money paid to directors. |
| Sainsbury (J) (SBRY) chief executive Mike Coupe has pledged to shut dozens of stores and slash £500m of costs as he battles to keep his job after a failed merger with Asda. The supermarket is poised to close up to 125 outlets over the next five years, including large shops, convenience stores and standalone sites run by Argos, which it also owns. It declined to say which stores could be affected or the number of jobs at risk, but industry observers warned that hundreds of roles are likely to be scrapped. The retailer also said it will immediately halt new mortgage sales and stop injecting capital into its banking arm after ploughing a further £35m into the division this year. |
| Prudential (PRU) investors are set to enjoy a billion-pound windfall after Britain’s largest insurer shells out £350m to split from its UK and European savings and insurance business and fund management arm in late October. Shareholders have now been given an exact timeline for the £7bn demerger, as well as details around future payouts, despite the transaction being in the works since early 2018. New shares in M&G will be admitted to the London Stock Exchange on October 21, following a general meeting on October 15, with both Prudential and the new entity expected to pay out more than £1.3bn between them over the course of 2019 and 2020. |
| Tesco (TSCO) is axing the first Jack’s a year after the supermarket giant unveiled the discount chain that is meant to help it take on the likes of Aldi and Lidl. The Rawtenstall store was opened earlier this year to see if a so-called “bulk buy store” would attract shoppers. A Tesco spokesperson said: “All colleagues currently employed by Jack’s will transfer over to Tesco with new additional roles also available.” The grocer, which has 10 Jack’s stores at present, said it was opening a new Tesco store in Rawtenstall “that will better serve customers in this area”. It will open three more Jack’s by the end of the year. |
| A deal with Love Island winner Amber Gill helped drive annual sales at online fashion firm Boohoo.com (BOO) above £1bn for the first time. The online operator, which has overtaken arch rival Asos as the largest fashion retailer on London’s AIM, posted a 43% rise in revenues to £564m for the six months to the end of August. Profits jumped £20m to £45.2m. Boohoo’s success has been partly driven by its work with social media darlings such as Ms Gill, 23, who was paid £1m to promote its MissPap brand. The firm now spends around £50m a year on contracts with stars including England footballer Dele Alli, actress Emily Ratajkowski and US rapper Em Saweetie. |
| The total bill for Prudential (PRU) plan to split itself in two has been put at more than £430 million in the first year, Paul Manduca, the Prudential’s chairman, said in a letter to shareholders that he expected the total cost to the Prudential to hit £350 million, while its demerged M&G business would incur at least an extra £80 million a year of head office costs. Mr Manduca also warned shareholders that the post-deal Prudential would receive “a materially lower quantum of tax recoverable” because its interest and head office costs would be lower going forward. |
| Sainsbury (J) (SBRY) is to close about 125 supermarkets and Argos stores, stop selling mortgages and cut costs as it sets for the future after its failed tie-up with Asda. Up to 70 high street Argos stores will be shut as the company relocates 80 into its supermarkets over the next five years. It will also close ten to 15 supermarkets and 30 to 40 convenience stores, but will open about ten supermarkets and 110 convenience stores. Mike Coupe, 58, chief executive, yesterday played down speculation that his departure was imminent, saying that he was “committed to the business . . . there is plenty to be doing”. |
 | BAE Systems (BA.) has won a multibillion-dollar American government defence contract for production of the Advanced Precision Kill Weapon System. The $2.7 billion deal will support US military and foreign military sales of an upgrade to the 2.75in Hydra 70 unguided rocket system to make it a semi-active laser-guided precision weapon. This will include sales to the governments of Iraq, Lebanon, Netherlands, Jordan, Afghanistan, the United Kingdom, Tunisia, the Philippines and Australia, the Pentagon said last night. |
| Aston Martin Holdings (AML) revealed a need to raise up to $250 million on the bond market with interest rates of up to 15% including controversial payment-in-kind notes. The latest fundraising by the struggling luxury sports carmaker sent up “red flags” in the equity market over its future. Standard & Poor’s downgraded Aston Martin to CCC+ in the league of companies deemed vulnerable and investments which should be regarded as speculative. | |
| Boohoo.com (BOO) has spent £90 million on marketing campaigns over the past year, including a music video featuring the Noughties R&B singer Ashanti. That investment, which is the equivalent of 9% of annual sales, appears to be paying off. The group reported revenues of £564.9 million for the six months to the end of August, up 43% compared with the year before, while pre-tax profit increased 83% to £45.2 million. Spending on influencers was “a decent portion” of the marketing budget, John Lyttle, 51, the chief executive, said. This total spend included the music video for the group’s Pretty Little Thing brand, founded by Mr Kamani’s son. Boohoo passed the £1 billion mark in annual sales this year but “there is fuel left in the tank” for further expansion, Mr Lyttle said yesterday. |
| Babcock International Group (BAB) enjoyed one of its best days on the stock market after a trading update revealed that the operator does not expect to let down its investors this year. Fresh from winning a £1.25 billion contract to build five cut-price Type 31e frigates for the Royal Navy at its shipyard at Rosyth near Edinburgh, Babcock said it expected to hit its targets for revenues, operating profits and cashflow for the year to the end of March. As the financial year started, it guided analysts to expect revenues of £4.9 million, down from £5.1 million, operating profits at between £515 million and £535 million, down from £588 million, and cashflow above £250 million but down from £323 million. |
| has sounded out the boss of a rival mining group as a potential replacement for Andrew Mackenzie, its chief executive. The group approached Mark Cutifani, head of Anglo American, earlier this year, according to Bloomberg. Mr Cutifani, 60, rebuffed its advances. Anglo declined to comment. Mr Mackenzie, 62, has run BHP since 2013 and is rumoured to be standing down next year. His fate was the subject of speculation in the mining industry two years ago when the group appointed Ken MacKenzie, 55, who is no relation, as chairman. BHP is expected to appoint an insider as its new chief executive. The front runners are Peter Beaven, chief financial officer, and Mike Henry, head of its Australian business. | |
 | Rising bills and lower spending on infrastructure of reservoirs and mains pipes will help United Utilities Group (UU.) to produce higher revenues and profits this year, the company has said in an upbeat trading statement. It said that current trading was in line with expectations and that it would invest an extra £350 million in the business. Shares in the company, drifting down because of Labour commitments to return the sector to public ownership, were unmoved. |
   | TUI AG Reg Shs (DI) (TUI) shares had added more than 10% on Monday and Tuesday in the expectation that many of Thomas Cook’s customers would use its services. But the stock dropped to close at 927p yesterday, as analysts at Jefferies reiterated their “underperform” rating, claiming that Tui was unlikely to be as big a beneficiary as predicted. “Given the UK backdrop, we think pricing will be a key focus in determining market share winners,” the US investment bank said in a research note. “We think On the Beach and [Jet2 owner] Dart Group will benefit most from Thomas Cook’s price-sensitive package customers. Given its fixed cost base, Tui has the lowest earnings before interest and tax margins and we do not think it will lower prices to capture share.” The analysts didn’t stop there: they believe hotels that have been left out of pocket by Thomas Cook’s failure might start to tighten up their payment terms. Tui would be the most exposed to any changes, as it averages 63 days to pay its invoices, whereas Dart Group (DTG) takes 24 days and On The Beach Group (OTB) only seven. |
 | Sophos Group (SOPH) was among the biggest mid-cap losers as over a third of shareholders voted against bosses’ remuneration packages at the annual meeting. The motion passed as 65.3% of investors backed it but Sophos said it was “disappointed” by the outcome, adding that it would “reflect carefully” on the feedback from investors. |
 | Safestay (SSTY) shareholders will have enjoyed a good night’s sleep after the hostels operator reported a 24% increase in sales for the first six months of the year. Revenue jumped to £8.1 million in the first half. |
| Trainline Plc (TRN) shares hit the skids as fresh fears over renationalisation shook the rail ticket website’s investors. Its shares slipped as the market reacted to a speech by Jeremy Corbyn at his party’s conference in Brighton, where he insisted a Labour government would take back control of Britain’s railways. “We’ll bring rail, mail, water and the national grid into public ownership so the essential services that we all rely on are run by and for the public, not for profit,” Mr Corbyn said. City broker Peel Hunt said investors should be worried by any moves to re-nationalise the industry. Ahead of the initial public offering in June, its bosses said nationalisation could have a “material adverse effect”. “With Trainline’s success over the past 22 years driving its current £2.1 billion market cap, through its existing business model of a 5% commission fee from the rail carriers that generates a 57% contribution margin in the UK, the ‘not for profit’ part will likely be very concerning,” said Peel Hunt, which cut its price target to 430p and repeated its “hold” recommendation. | |
 | Tempus – 4Imprint Group (FOUR): Buy on weakness. Market leader and growing in the US, with the added prospect of special dividend payments |
 | Tempus – Biffa (BIFF): Hold. Plenty of growth potential but shares are volatile |
 | HSBC Holdings (HSBA) looks on course for a future based in Asia. The bank still holds a lot of value for Beijing thanks to its ability to raise dollar funding |
 | Woodford offloads IP Group (IPO) shares in cut-price sale. Former star fund manager disposes of 142m shares in FTSE 250 group for around £76m |
| Lombard – TUI AG Reg Shs (DI) (TUI) profit is from capex, not at Thomas Cook’s expense. Survival is more to do with adapting the travel company business model |
| Metro Bank (MTRO) shares plunge prompts sale speculation. Investors punish lender after pulling £200m bond offering despite high interest rate |
 | CYBG (CYBG) to cut 330 jobs as part of Virgin Money merger. First tranche of redundancies will be spread across the UK |
| Metro Bank (MTRO) shares tumble 30% after bond sale pulled. UK challenger bank blames decision to cancel £200m sale on current market conditions |
 | The head of the Hong Kong stock exchange has said he would reject his own offer if he was in charge of the London Stock Exchange Group (LSE). Charles Li told The Sibos finance conference in London: ‘It was now or never. If I were in David Schwimmer’s shoes, I’d reject Charles Li. I accept that. ‘But I think the opportunity is such that London investors deserve a look at it.’ Li, speaking on stage shortly after LSE boss David Schwimmer, is in the middle of an investor charm offensive and said he regretted the timing of the bid. He admitted Hong Kong Exchanges and Clearing’s (HKEX) controversial swoop was late. But he told investors that a merger would see the two exchanges ‘complete each other’ and unlock ‘the last frontier’. |
| Metro Bank (MTRO) shares crashed by a third to an all-time low yesterday. The sell-off, which was triggered by a failed fundraising on Monday, has fuelled speculation that it may have to find a buyer. Investors have turned against the High Street lender after an accounting error in January, since when its shares have plunged 90%. Yesterday’s dive was caused by the shock decision to pull a £200million fundraising in the bond market due to lack of demand from investors. Metro needs to raise the money to meet EU regulations by January 1, requiring banks to issue a special type of bond that can be used to prop up banks during times of crisis. |
 | Burford Capital (BUR) took another battering after hedge fund Muddy Waters launched a fresh attack on its accounting practices. The lawsuit-funding firm’s shares tumbled after it was accused of ‘evading key questions’ in a document. On Monday, Burford issued a 45-page response to the latest Muddy Waters claims, which said it used ‘aggressive’ valuations for legal cases yet to be concluded. ‘Burford fails to address the key issues,’ Muddy Waters said. ‘Just because it is 45 pages long doesn’t mean it answers any of the important questions we raised.’ |
 | The boss of Hotel Chocolat Group (HOTC) proudly described his stores as ‘a doorway into instant escapist happiness’, as sales accelerated for another year. The British chocolatier opened 16 new shops in the past year, helping it chalk up a 14% rise in sales to £132.5million. The company invested in its older shops during the period too, rolling out hot drinks, ice-creams and evening tasting events across its 100 UK sites. ‘This helps to keep stores relevant and exciting, as well as increasing shopper dwell time,’ said Emily Salter, an analyst at GlobalData. Hotel Chocolat also hailed the success of new products like a hot chocolate making machine and vegan ice lollies, and said sweet-toothed shoppers flocked to buy gifts for seasonal occasions such as Easter and Mother’s Day. |
| TUI AG Reg Shs (DI) (TUI) said the collapse of Thomas Cook will have a ‘short-term’ impact on its profits, as it reassured investors today that its business model was ‘resilient’ and full-year results in line with expectations. However, the group warned that ongoing issues in the travel industry – namely the continued grounding of some Boeing aircrafts, overcapacity in the airline sector and the impact of Brexit uncertainty on consumer spending – will continue to eat away at it in the new year. |
| FireAngel Safety Technology Group plc (FA.) sank after it sounded the alarm on its full-year performance, warning investors to expect a loss. It is the carbon monoxide detector and smoke alarm maker’s third warning on profits in 18 months and comes after former chief executive Neil Smith left in July. Coventry-based FireAngel said its loss before tax had widened to £3.6million between January and June, from £2million. | |
 | M&C Saatchi (SAA) shares dived to a seven-year low after warning its annual profit could be as much as 10% below forecasts. It comes six weeks after the group revealed it will book a £6.4million one-off charge in its 2019 results to cover past accounting errors. PwC is conducting an independent investigation to find out how far back the errors go and will report its findings in November, M&C Saatchi said. |
 | AA (AA.) advanced slightly as revenue rose 2.3% to £491million and it began to stem customer losses. It lost 20,000 net members between January and June, leaving it with 3.19m compared with 3.21m in the same period of 2018. The firm is hoping to keep customers with its smart breakdown product, a device which costs an extra £50 a year and plugs into the car to monitor its health, which it will roll out to existing members later this year. And it hopes to lure new ones in with an advert featuring the cast members from the cult TV show Red Dwarf. |
 | Barr (A.G.) (BAG) fizzed 20p, to 606p, as it stuck to its full-year estimates and boosted the interim dividend from 3.9p to 4p a share, despite a wet summer and the sugar tax hitting first-half sales and profits. |
 | InnovaDerma (IDP) rose 6.5p, to 83.5p, after it doubled full-year profits to £1.4million and said its Wonder Serum, a product which was exclusive to Boots, had performed brilliantly. |
 | Everyman Media Group (EMAN) rallied 2p, to 184p, as admissions and revenues both rose in the 26 weeks to July 4. It plans to open a further 15 venues by 2022 and is looking at another eight sites. |
| Metro Bank (MTRO) is facing questions over its future as the shock failure of a £200m bond sale sent shares crashing to a new record low. The stock plummeted 30% today after it was forced to cancel the fundraising due to a lack of investor interest. Analysts warned the debacle could leave Metro unable to meet a Bank of England deadline for securing extra cash at the start of next year. It is a fresh blow for the credibility of the embattled lender, which stunned investors in January when bosses revealed it had miscalculated the riskiness of a string of property loans. |
| The boss of the Hong Kong stock exchange has admitted he would reject his own takeover offer if he was running the London Stock Exchange Group (LSE) as he put forward his arguments in a public “boxing match” between the two chiefs. David Schwimmer and Charles Li, the respective heads of the LSE and HKEX, took to the stage at an influential finance conference in London on Tuesday to get their points across just over a week after London rejected Hong Kong’s approach. Answering questions from an interviewer who said he felt like he was refereeing a “boxing match”, Mr Li acknowledged that now was not the best time to make a proposal for the British bourse and said he wished he made the bid earlier. |
| Marks & Spencer Group (MKS) is parting ways with yet another director just days after its finance chief said he was leaving. Gordon Mowat, who is head of supply chain and logistics for the firm’s troubled clothing and home arm, has been pushed out after two years in the role. Mr Mowat is to be replaced, for now, by chief executive Steve Rowe’s executive assistant Stephen Fitzgerald. The move comes after clothing and home boss Jill McDonald was ousted in July, and just days after it emerged that Humphrey Singer, M&S’s chief financial officer, is leaving the business. |
| Neil Woodford is gearing up to ditch his entire stake in IP Group (IPO), just two weeks after the company blamed the troubled fund manager for its sluggish half-year performance. Mr Woodford is understood to be offloading his entire 13% stake, worth more than £86m as per the firm’s closing share price, to other institutional shareholders after the market close on Tuesday. The sale will be overseen by Bank of America Merrill Lynch as well as brokers at Berenberg and Numis. Mr Woodford’s 142m shares in IP Group were held in his shuttered Equity Income Fund. |
| Barr (A.G.) (BAG) posted a “disappointing” first-half after the sugar tax and wet summer weather delivered a blow to sales and profits. The company reported a 10.5% fall in sales to £122.5m in the six months to July 27 as it struggled against last year’s soaring temperatures. Profits tumbled by more than a quarter to £13.5m during the period, as AG Barr blamed “complex” pricing changes relating to the sugar tax. It comes after the Scottish company warned in July that profits would come in lower than expected. AG Barr called the results “disappointing”. |
 | The boss of Moss Bros Group (MOSB) said its new eco suit was not “a marketing gimmick” as revenues edged up at the retailer, but losses widened. Chief executive Brian Brick said: “Business people have a responsibility [to look into sustainability]. We do believe there is an issue. It’s not a marketing gimmick, it’s real.” The £169 eco suit is made from recycled polyester-blend cloth and canvas; the retailer claims the fabric is made from up to 45 plastic bottles that would otherwise go to landfill. Moss Bros saw its sales rise to £65.3m from £64.4m, for the half year to the end of July, while losses went from £1.7m to £2.7m. However, like-for-like sales, which strip out new stores, increased by 1.4%. The company scrapped its interim dividend to protect its coffers. |
| TUI AG Reg Shs (DI) (TUI) is remaining cautious about a possible boost from the demise of Thomas Cook and said its business model was proving “resilient” despite a “challenging market”. The company stood by its financial targets for the year to September on Tuesday, but chief executive Friedrich Joussen struck a muted tone in what one analyst called a “downbeat” update. Tui warned its markets and airlines unit faced “a number of ongoing external challenges such as the grounding of the 737 Max aircraft, airline overcapacities and continued Brexit uncertainty”. The company did not provide any update on the possible opportunity to increase market share or raise prices following the failure of Thomas Cook. |
| Metro Bank (MTRO) was under intense pressure after its shares fell as it ditched an attempt to raise £250 million of debt required by regulators. Analysts said that the bank faced risks over regulatory investigations into a £900 million accounting error, potential litigation by shareholders and the difficult economic environment. It has struggled since it admitted to wrongly assessing the risk of loans to companies and landlords. The Financial Conduct Authority and Prudential Regulation Authority are monitoring the situation. |
| Thomas Cook Group (TCG) finances before its collapse have been laid bare in court documents showing a balance sheet deficit of over £3 billion. In a High Court witness statement, Peter Fankhauser, its now former chief executive, lists liabilities including £1.9 billion of debt and guarantees to organisations such as the Civil Aviation Authority, bonding providers and payment service providers. He concludes that “accordingly the company has a balance sheet deficiency of in excess of £3.1 billion” and predicts that after the failure of talks over a restructuring “in simple terms the company will run out of cash by October 4”. He confirms that “the absence of funding” was one of the main reasons the board opted for liquidation rather than administration. |
| Thomas Cook Group (TCG) biggest rival is preparing to add extra capacity to fill the hole left by the travel group’s collapse. TUI AG Reg Shs (DI) (TUI) said that it was assessing its capacity needs for next summer and was talking to Thomas Cook’s hotel partners with a view to signing up some of them. Fritz Joussen, chief executive, said: “Everybody is racing to replace part of the capacity. Not all, as there was too much, but a good part of the capacity will be restored and part of it will be us.” |
| The head of the Hong Kong stock exchange group has tried to soothe concerns about Beijing’s influence on the proposed merger with London Stock Exchange Group (LSE), saying that the board of the combined business could be altered. “We are completely open to having a discussion on governance,” Charles Li, chief executive of Hong Kong Exchanges and Clearing, said as he tried to defrost the so-far chilly response to his £32 billion merger proposal. Mr Li, 58, conceded that the timing of his offer had not been good and that it was “disruptive and unusual”, but he claimed that it was a case of “now or never”. He was “thinking big”, he said at the Sibos banking conference in London’s Docklands. “Together, we can unlock the last frontier.” He also admited that if he were running the London Stock Exchange Group he would have rejected his own bid. |
| AA (AA.) is to pin its hopes of attracting new customers on the science fiction sitcom Red Dwarf, predicting that membership growth will lift off next year. The breakdown service is drawing a line under its “kinda naff” car repair adverts, which for years featured yellow vans coming to the rescue of drivers stuck on roadsides. Simon Breakwell, chief executive, said that the days of “fuddy duddy” promotions were over as the AA attempts to stem a decline in customers. Its base of personal members stabilised last year, falling marginally from 3.25 million to 3.19 million. |
 | Card Factory (CARD) decision to stockpile Christmas cards in spring ahead of the original Brexit date in March has contributed to a fall in profits. The greeting card retailer said yesterday that pre-tax profits had declined by 14.4% to £24.3 million in the six months to the end of July, a slide that the company blamed on the additional cost of holding extra stock, along with investment in new lines and increases in the national living wage. |
| A promise that it was getting back on track after a profit warning in July was enough to reassure investors in Barr (A.G.) (BAG) yesterday. Shares in AG Barr rose despite the Scottish soft drinks maker announcing declines in both half-year revenue and pre-tax profit, setbacks that it had flagged up in the summer. After revealing that revenue was down by 10.5% to £122.5 million during the six months to the end of July and that profit was down 26% to £13.5 million, the company blamed tough comparisons with the long, hot summer of 2018 and patchy performance this year in Scotland and northern England. |
| Moss Bros Group (MOSB) said yesterday that it was in “active” talks with landlords to cut rents, despite reporting rising sales. The company credited its improved sales numbers to its new Tailor Me personalised suits and to broadening its range to include gilets and chinos, reflecting the trend towards more casual garments. The retailer also said that it would launch a new eco suit made from up to 45 recycled plastic bottles for £169, with the fabric and suits made in India. |
 | The search for a new chief executive has begun at Close Brothers Group (CBG) after Preben Prebensen announced that he was standing down after ten years. The banking group revealed the planned change of leader yesterday as it reported a slight fall in operating profit before tax because of adverse market conditions hitting its asset management division and weak trading at its Winterflood securities unit. |
| M&C Saatchi (SAA) warned yesterday that its profits would fall short of expectations, sending shares lower. The advertising and public relations agency is embroiled in an accounting controversy. Full-year earnings would be between 5 and 10% below forecasts owing to losses at some of the start-up agencies in its network, the company said. The grim update piles further pressure on M&C Saatchi, whose market value has more than halved since it disclosed irregularities in its accounts last month. The company said that an independent review by PWC, which is due to be completed by November, would result in a net charge of £5.1 million. |
 | Auto Trader Group (AUTO) went into reverse yesterday after UBS warned that the car sales website could be forced to slash its guidance when it updates the market in November. Analysts at the Swiss investment bank believe that second-hand car dealers are clearing their forecourts amid a fall in the value of pre-owned vehicles. “If dealers do not begin to restock for the rest of the fiscal year, we estimate a 3% headwind to average revenue per retailer [in the 2020 year],” they said. As well as trimming earnings-per-share forecasts for the next three years, UBS lowered its price target on Auto Trader to 510p from 540p and maintained its “sell” recommendation on the stock. |
 | Pets at Home Group (PETS) shares dropped after Morgan Stanley downgraded the retailer to “underweight”. Short-sellers have been closing out their positions given the “runaway” share price in recent months, but the bank believes that investors have overlooked the challenges facing the business. |
 | Primary Health Properties (PHP) squeezed £100 million from investors to take advantage of some “very attractive” opportunities to develop new healthcare centres in Britain and Ireland. The real estate investment trust has agreed to fund the acquisition and development of eight medical centres at a cost of £60 million and has agreed terms on four more, which will require another £50 million. |
| InnovaDerma (IDP) reported a doubling of annual profits and predicted further growth. Innova Derma makes Skinny Tan — a coconut-scented tanning lotion worn by reality TV stars that claims to help hide cellulite. Two years ago it had to withdraw claims that its product could “tone” after a ruling from the Advertising Standards Authority. Innova Derma was rapped on the knuckles for wrongly marketing the lotion as 100% natural. Despite having been stripped of one of its key selling points, sales of Skinny Tan have surged over the past year, with Boots now stocking the range, as well as Superdrug. Innova Derma said that it had made a “very positive start” to its financial year, during which it planned to bring a new product to market. It would not ay what the launch involved, although management expects it to “disrupt a large new category”. |
 | Tempus – Travis Perkins (TPK): Buy. Improving core supply business with prospect of special return and share in company spin-off |
 | Tempus – Stanley Gibbons Group (SGI): Hold. After a prolonged crisis there are signs of turnaround |
| Lombard – Why Thomas Cook Group (TCG) is in liquidation not administration. No administrator could fund such a complex business while seeking a buyer |
| Bitter blame game over Thomas Cook Group (TCG) collapse. Executives and lenders struggled to cut a ‘cancerous’ debt pile but trust broke down |
| Thomas Cook Group (TCG) management faces probe over collapse. Senior pay questioned as rescue of 150,000 tourists begins with 21,000 jobs at risk |
| Marks & Spencer Group (MKS) shares fall after finance director resigns. Humphrey Singer leaves UK retailer after just 14 months in role |
| Metro Bank (MTRO) pulls £200m bond sale in fresh blow. UK challenger bank blames decision on current market conditions |
 | Ocado Group (OCDO) co-founder rejects ‘ludicrous’ espionage claim. Jonathan Faiman is accused of obtaining confidential data to launch rival business |
| Thomas Cook Group (TCG): in defence of the package holiday. The collapse of Britain’s oldest travel group has a large human cost |
| Thomas Cook Group (TCG) customers face two-month wait for refunds. Cost of repatriating and compensating customers estimated to hit as much as £600m |
| Thomas Cook Group (TCG) brought down to earth. Rival TUI AG Reg Shs (DI) (TUI) set to be beneficiary from the collapse of the UK tour operator |
 | weighs £4m buyout of Goals Soccer Centres (GOAL). Mike Ashley’s group approaches scandal-hit pitch operator with potential bid |
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