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Car dealer Lookers warns on profits
Hiscox hit by cost of catastrophes
Thomas Cook in rescue talks with Fosun
WPP to sell 60% stake in Kantar
Daimler warns on profits
Rates could be 'cut to near 0%'
Image source, Getty ImagesThomas Cook isn't the only share price to suffer big falls today. Car dealership Lookers has seen its share price tumble 18% following a profit warning.
As reported earlier, the company said full-year profits would be below expectations due to weak consumer confidence and pressure on used-car margins.
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Shares in Thomas Cook have plunged 40% this morning as investors react to the news of its planned £750m rescue deal.
The share fall was expected as under the terms of the proposed deal shareholders have been told the value of their holdings will be "significantly diluted".
The company's shares are now trading at about 8p each. A year ago they were worth just over £1.
Trading is now under way on the London Stock Exchange, and FTSE 100 index has opened up 13.73 points at 7,523.55.
The FTSE 250 index is 15.45 points higher at 19,458.61.
Image source, Getty ImagesHurricane Michael struck in early October, causing 59 deaths and $25bn (£19.2bn) in damage.
"The insurance market has seen continued deterioration from 2018 'catastrophe events', including Typhoon Jebi in Japan and Hurricane Michael in Florida. The scale of deterioration has been significant, with industry loss estimates having increased materially since these events".
That's according to Lloyd's of London insurer Hiscox which said it expects first-half profits to be between $150m (£123m) and $170m.
Last year's pretax profit was $164m.
Today Programme
BBC Radio 4
Image source, Getty ImagesPeter Fankhauser, chief executive of Thomas Cook, also told BBC Radio 4's Today Programme that the package holiday was still an attractive proposition for customers.
"You will be surprised that with all the research... we do.... the package holiday is still a very very attractive form of travelling because it gives you the security, it gives you the service and if you develop holidays which are exactly what today's customer wants... then you can compete in this very tough environment"
"It's a challenging market here in Europe," he said.
Today Programme
BBC Radio 4
Image source, Getty ImagesMore from Peter Fankhauser, chief executive of Thomas Cook, who has been speaking to the Today Programme following the announcement of talks to inject fresh funds to the business with its banks and Fosun of China.
He says a joint venture with Fosun in China is already a "success story".
"It's a massive growth market... That is one of our growth areas going forward".
Fosun is already the largest shareholder in Thomas Cook.
Image source, Getty ImagesCar dealership Lookers has said it will make less money than previously expected this year because of "challenging conditions" in the sector.
While the company said trading was good during the first three months of the year, trading in the second quarter was tougher, with new car registrations down 4.6% from a year earlier.
Lookers said it expected "that the more recent challenging conditions are likely to continue into [the second half], exacerbated by continued weakness in consumer confidence in light of wider political and economic uncertainty, and further pressure on used car margins".
The company added that its "current outlook for underlying profit before tax for the full year is now below its previous expectations".
Today Programme
BBC Radio 4
Peter Fankhauser, chief executive of Thomas Cook, has been talking to BBC Radio 4's Today Programme.
He says the restructuring being announced today, which includes Fosun of China, is the "best available option for us".
"It secures the value for our employees, for our suppliers and as well for our customers and that is the main focus that we have."
"This is a very good option to secure the business and to put the business on the solid financial footing for the future," he said.
Image source, Getty ImagesAdvertising company WPP says it is selling a 60% stake in Kantar to private equity house Bain.
Mark Read, chief executive of WPP, said: "Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities."
Image source, Getty ImagesThe Gym Group has issued a trading update ahead of its first half results in which it says revenue has increased 30% to £74m in the first half of the year.
Richard Darwin, chief executive, said: "Our aim is to provide affordable fitness to a growing and more diverse membership.
"We have made significant progress in that goal in the first half with 10% growth in the number of members and our recent initiative to help 16-18 year olds take their first steps in joining a gym".
The company said it was "on track" to meet its operational and financial plans for 2019 and will announce its interim results on 29 August.
Image source, ReutersA spokesman for Fosun Tourism Group said: "Fosun is a shareholder in Thomas Cook, because it is a British company operating in the global travel industry, in which we have extensive experience.
"We are committed investors, with a proven track record of turning around iconic brands including Club Med and Wolverhampton Wanderers [football club]."
Today Programme
BBC Radio 4
Image source, Getty ImagesJustin Urquhart-Stewart, partner and co-founder of Seven Investment Management, told BBC Radio 4's Today Programme that the Thomas Cook deal had logic for Fosun, the Chinese company involved in the talks about injecting more cash into the business.
Fosun already owns Club Med (and Wolverhampton Wanderers).
"It's very important for Fosun. Fosun is a large Chinese conglomerate and already got a large tourist business," he said.
"This will allow Fosun to have more investment in the West but take more of the expertise to help grow that business".
"It's a good time for them to go in" given the price of Thomas Cook, he said.
The share price over the last five years
Peter Fankhauser, chief executive of Thomas Cook, says: “After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks.
“While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees.”
Image source, PA MediaThere's also a trading update from Thomas Cook, which says its underlying earnings will be "behind the same period last year".
It says it has a "rigorous focus on cost, while remaining fully focused on delivering a stronger holiday offering to customers through high quality, higher-margin hotels, underpinned by a digital focus and market-leading innovation".
It says its summer holidays are 75% sold, slightly ahead of the same period last year.
Tour operator bookings are down 9% and while bookings in recent weeks have seen a "marked improvement" margins remain weak due to continued intense competition with high levels of promotional activity across all businesses.
Airline bookings are down 3% overall, with pricing up 2%.
"Looking forward, it is clear that the trends experienced in the first half of the year have continued into the second half, reflecting an uncertain consumer environment particularly in the UK, leading to intense competition," the company said.
BBC Radio 5 Live
Wake Up To Money
Image source, AFPJustin Urquhart-Stewart, partner and co-founder of Seven Investment Management, has been speaking to BBC Radio 5 Live's Wake Up to Money about Thomas Cook and that possible investment from Chain's Fosun.
He points to changes in the cruising market, packaged holidays and the fights markets.
And, he says, that "luddites" like him "can sit there and sort out some form of reasonable holiday" over the internet without entering a travel agents.
"This is good news for Thomas Cook," he says, which he says has a strong brand name and good infrastructure.
Image source, Getty ImagesThomas Cook has also announced that it is in advanced discussions with Fosun and its lending banks "on the key commercial principles on which they would make a substantial new capital investment as part of a proposed recapitalisation and separation of the group".
The group wants £750m of new money which it says would provide sufficient liquidity to trade over the winter 2019/20 season and the "financial flexibility to invest in the business for the future".
"The recapitalisation proposal will require a reorganisation of the ownership of the tour operator and airline businesses which is expected to result in Fosun owning a significant controlling stake in the group tour operator and a significant minority interest in the group airline," the company said.
It appears to be similar to a debt-for-equity swap that could eventually led to the company being delisted from the stock market.
Image source, ReutersChina’s Fosun Tourism says it is in advanced talks with Thomas Cook's banks to inject £750m into the travel company.
Fosun is already Thomas Cook's largest shareholder, and also owns the Club Med holiday business.
Fosun would end up with a controlling stake in Thomas Cook’s tour operator and a minority stake in its airline - which Thomas Cook had initially put up for sale.
The deal comes after shares in Thomas Cook fell 30% in one day in May after analysts at Citigroup said the company's shares were "worthless".
Thomas Cook received a takeover approach from Fosun last month and Sky News had reported on Thursday that a deal was getting near.
Welcome to Friday's Business Live.
China's Fosun has said it is in advanced talked to inject £750m into travel company Thomas Cook.
We'll bring you developments about that and all the day's other business news.
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