Thomas Cook (LON:TCG) has been among today’s UK share prices to watch, with the shares tanking as the company announced recapitalisation plans. In notable FTSE 100 movers, Hiscox (LON:HSX) is in the doldrums after issuing an unscheduled profit warning.
Thomas Cook tumbles on Friday
Thomas Cook is in freefall this Friday after announcing that it was in discussions with its largest shareholder, Fosun Tourism Group, and its core lending banks, for a substantial new capital investment as part of a proposed recapitalisation and separation of the company. Under the proposal, the troubled tour operator is targeting an injection of £750 million of new money.
Reuters reports that traders have noted that the shares were being hammered as investors had been hoping Fosun would buy out the entire company, and that Markets.com analyst Neil Wilson had commented that several questions about how the refinancing deal would impact a proposed sale of the airline business also remained. Thomas Cook’s shares have lost more than 46 percent of their value in early afternoon trade.
In other notable London-listed fallers, Hiscox is trading deep in the red after saying in a six-month update ahead of its interims at the end of the month that it expects to deliver a profit before tax for the six months ended June 30 in the range of $150 million to $170 million. Proactive Investors reports that the new forecast compares with $163.6 million last time and analyst forecasts of nearer $190 million.
“Overall, whilst earnings quality has deteriorated and the tax charge is disappointing, the full year outlook will be largely determined by the impact of the 2019 Hurricane season which peaks in Sept/Oct,” Peel Hunt commented, as quoted by Proactive Investors. “What is becoming clear is that the level of earnings buffers to absorb catastrophe losses has materially declined ahead of the hurricane season.” Hiscox’s shares have given up a little over four percent, as compared with about a 0.2-percent gain in the benchmark FTSE 100 index.
In notable risers, WPP (LON:WPP) is outperforming the market after announcing that it had agreed the sale of 60 percent of Kantar to Bain Capital Private Equity, with the deal valuing Kantar at about $4 billion. The ad giant, which is currently undergoing an overhaul under its new chief executive, plans to retain about 60 percent of the proceeds to reduce debt, with the balance of about $1.2 billion to be returned to shareholders. WPP’s share price is trading about 0.4 percent higher.
Shares in DCC (LON:DCC) have been subdued as the company issued a trading update, saying that it had traded “in line with expectations and delivered good growth” in the quarter ended June 30. DCC’s shares, however, are 0.9 percent worse off at 6,880.00p.
UK share prices to watch next week
Next week is set to see a pick-up in London-listed company updates, starting with a trading announcement by Rio Tinto (LON:RIO) on Monday and continuing with companies including TalkTalk (LON:TALK), Sports Direct (LON:SPD) and easyJet (LON:EZJ) later in the week. IG reports that while the London-listed low-cost carrier reaffirmed its full-year forecasts at its interim results, analysts at HSBC trimmed its stance on the company, noting that with its June profit warning, Lufthansa had “flagged very weak short-haul revenue trends in Q2, markedly worse than it described at its end-April Q1 report”.
Royal Mail Group (LON:RMG) will also be among next week’s UK share prices to watch, with the privatised postal operator set to unveil a trading update on Thursday, alongside its annual general meeting. Proactive Investors reports that analysts at Jefferies project a three-percent rise in first-quarter revenue, driven by international parcels arm GLS and M&A, while UK parcel and letters division UKPIL are expected to have declined 0.5 percent with letters having dropped five percent and parcel revenues having climbed four percent.
Burberry (LON:BRBY) reports on Tuesday and investors will be eyeing updates on the performance of collections by the luxury goods retailer’s new creative director Riccardo Tisci.
“Fashion group Burberry has been through some tough times in recent years mainly due to a slowdown in sales growth in its key Asian market,” said The Share Centre, as quoted by Proactive Investors. “The management’s forecast for the current year did not impress the market when it was made in March so investors will be hoping for some rather more positive comments alongside the Q1 numbers.”
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