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magazineNews review: Thomas Cook, Metro Bank and more
Travel operator Thomas Cook (TCG) was battling all-time lows at the time of writing to trade a little above 12p. These lows were marked in response to a truly horrible set of figures for the six months to 31 March published on 16 May and showing a £1.45bn loss, with debt climbing over the £1bn mark.
Panic over the financial position was exacerbated by research from Citigroup where it published a 0p price target on the stock and argued the shares were worthless.
Thomas Cook’s short-term future and £300m of fresh lending to see it through the coming winter are now seemingly dependent on a sale of its airline business.
METRO BANK RELIEF
Another company with question marks over its financial future, Metro Bank (MTRO) mustered a recovery to 670p on relief it had got its £375m emergency fundraise away at a smaller than expected discount (16 May). Reassuring words from regulator the Prudential Regulation Authority also helped.
Budget airlines EasyJet (EZJ) and Ryanair (RYA) both racked up losses in their first half periods, with results posted on 17 May and 20 May respectively. However, EasyJet endured a less turbulent market reaction as full year profit guidance was unchanged thanks to tight control of costs.
Ryanair, with its warning of continuing pressure on fares with little to no visibility on when they might recover, got a more negative response from investors.
Both airlines face the challenge posed by increasing fuel costs, excess capacity in the European short-haul market plus all the complications for its passengers and operations posed by Brexit.
STAFFLINE SLUMPS
Recruitment firm Staffline (STAF:AIM) more than halved in value to somewhere just north of 300p on 16 May after its core business was hit by weak temporary hires, lower margins and slowing contract momentum.
The company, which specialises in supplying flexible blue-collar workers to the agriculture, drinks, driving, food processing, logistics and manufacturing industries, blamed Brexit for the wave of negative news. A delay to the publication of 2018 numbers linked to compliance with minimum wage rules also did not help.
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