Top City lawyers advising Thomas Cook Group (TCG) on its failed rescue plan are said to have demanded weekly payments from the travel company to ensure they received their fees in the run-up to its collapse into insolvency. The move spared insolvency experts at elite “Magic Circle” law firm Slaughter and May and US firm Latham & Watkins from joining a long queue of creditors when the company went down – including the company’s 21,000 staff, who face a long wait for their final pay cheque. Thomas Cook’s bondholders will be almost completely wiped out, it emerged on Thursday, as MPs launched an inquiry into executive pay, stewardship, and accounting practices at the company.
Panicked traders have wiped almost £7bn off Britain’s tobacco firms since Donald Trump launched a crackdown on vaping. Imperial Brands (IMB) slumped more than 9% on Thursday as it warned that action by the White House and individual US states has triggered a marked slowdown in electronic cigarette growth over the past three months. It means that since President Trump announced plans earlier this month to ban flavoured vaping products, Imperial has lost £3.4bn ofr its market value – with fellow London-listed producer British American Tobacco (BATS) down £3.3bn. Tobacco companies have embraced vaping as a way to boost their profits as Westerners turn away from smoking.
Barclays (BARC) chairman Nigel Higgins has shaken up the bank’s board by hiring two well-known financiers following pressure from investors to bring in fresh faces. The bank has hired Dawn Fitzpatrick, the investment chief for billionaire George Soros’ fund management firm who oversees assets worth about $25bn, and Mohamed El-Erian, the chief economic adviser at Allianz and former boss of Pimco, as non-executive directors. The pair are both veterans in the finance industry, and are particularly well-known in fund management circles.
The owner of British Airways warned profits will be £190m lower than last year following a two-day pilot strike that affected thousands of passengers. International Consolidated Airlines Group SA (CDI) (IAG) cancelled 2,325 flights earlier this month after BA pilots walked out following a row over pay and conditions. The airline group said it had taken a £121m hit from the action and a further £29m from threatened strikes by workers at Heathrow airport. IAG also blamed poor demand for bookings on its budget airlines, particularly Level and Spanish carrier Vueling, which will knock almost £40m off profits.
Investment manager Shore Capital Group Ltd. (SGR) is planning to delist from London’s junior stock market. The cancellation, which would will take effect on Nov 1, requires the consent of at least 75% of shareholders at the annual meeting next month. The London stockbroker – which advises small companies that think there is a benefit to being listed – said its Aim listing undervalued the business and comes at “considerable” expense. It also costs management time to maintain the company’s public admission, outweighing the benefits of retaining it. The company added that it now “has sufficient and significant capital to meet its growth ambitions”.
A slide in textbook sales in the United States that was twice as high as forecast has prompted Pearson (PSON) to warn on profits once more. The educational publisher said on Thursday that the 20% decline in demand from American university students would also put a return to sales growth next year in doubt. The former owner of the Financial Times has repeatedly warned on profits in recent years and cut 16,000 jobs as it attempts to ready itself for the digital age.
Neil Woodford suffered a triple-whammy humiliation on Thursday after the investment trust he runs was forced to cut the value of three more of its holdings. The board of Woodford Patient Capital Trust (WPCT) said that it has been told by supervisor Link to slash the valuations of three investments because of challenges they face raising funds on the markets. This will knock around £25m off Patient Capital’s value, equal to 3.1p of value per share. Link Fund Solutions also acts as supervisor to Mr Woodford’s shuttered equity income fund, which slammed the door on investors in June after running out of ready cash to repay departing customers.
Ted Baker (TED) has poached Debenhams (DEB) finance chief Rachel Osborne as the company seeks to move on from the sexual harassment claims against Ray Kelvin, the retailer’s founder and ex-chief executive. Ms Osborne, 54, will join the company in a few months from Debenhams, where she worked for a year. At Debenhams, she had to do battle with Mike Ashley’s Sports Direct as the sportswear tycoon tried to take over the struggling department store chain and derail its rescue plan, although it ultimately failed.
Mitchells & Butlers (MAB) toasted higher sales as punters flocked to its watering holes over the summer. Comparable sales rose 3.3% in the eight weeks to September 21, the firm said in a trading update, with drinks performing particularly well. The rise in sales for the 51 weeks to the same date was even higher at 3.6%. Sales of beer, wine, spirits and other drinks were up 4% in the period, while food sales were 2.1% higher compared to the same period a year ago. M&B owns about 1,700 restaurants and pubs across the UK under brands including Harvester, O’Neill’s, Toby Carvery, Browns and All Bar One.
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