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A big drop in Thomas Cook's share price this afternoon forced the holidays giant to reassure the City and deny claims business in the package tours industry had dropped off a cliff.
It rushed out a statement insisting it is trading well despite impromptu remarks by an executive. Peter Fankhauser, head of the German business, told reporters at the International Tourism Fair in Berlin that Thomas Cook would meet its summer sales targets only if last-minute bookings came in.
The group said its overall performance remains in line with previous guidance after the shares slumped below 200p following a frantic sell-off. It insisted the package tours market remained challenging, but the board was confident in achieving its expectations for the year as a whole.
It also said the group remained well-positioned for the future. A further trading update will be issued next week. The shares eventually pared back the damage, but were still left nursing a deficit of 26¼p at 203½p. Rival TUI, down 8p at 232¼p, fell in sympathy .
Shares generally were a touch softer for choice as London took its lead from Tokyo, where share prices were in retreat. The FTSE 100 index fell 15.69 to 3678.12. US retail sales showed a dip of just 0.1% last month, which was better than most forecasts. But Wall Street ran into profit-taking this afternoon following two consecutive days of gains. The Dow fell 17.45 points to 6912.95.
Lloyds Banking Group briefly touched a record low of 39.6p before reducing the deficit to 2p at 42.5p. The shares were hit by whispers that a leading US broker has cut its net asset value for the bank, which includes mortgage lender HBOS, to just 9p. The broker also told clients to switch out of Lloyds and into Royal Bank of Scotland, off 1p at 20.2p. Lloyds last weekend concluded terms to join the Government's asset-backed protection scheme for £15 billion. The move could see the Government's controlling stake in the lender eventually grow to 77%.
Land Securities lost an early lead, dropping 5p to 341¾p, after briefly touching 362½p, while the nil-paid slid 7.5p to 54.5p. Deutsche Bank has been catching up with events, and has slashed its target from 970p to 360p while repeating its hold rating. It says the extra £756 million of cash the property developer recently raised has brought little comfort to the shares.
Petrofac celebrated its promotion to the Footsie 100 with a rise of 20¾p to 515p. That coincided with UBS raising its rating from neutral to buy following recent contract wins. The oil-industry services supplier has been awarded $5 billion (£3.6 billion) of contracts so far this year. That lifts the backlog in its core engineering and construction division to a new high and gives good revenue visibility until at least 2011.
Shares in the London Stock Ex-change continued to nudge towards a four-year low with a fall of 11¾p to 387½p after being dumped out of the 100 companies that make up the benchmark index in this week's regular quarterly review. In their heyday, the shares were within a whisker of 2000p after the LSE received five takeover approaches. But the credit crunch and subsequent drop-off in share trading volumes have taken a toll.
RBS has taken its red pencil to the mining sector. It has dropped its rating on Antofagasta, down 36¼p at 499¼p, from hold to sell, pointing out that the shares have run up 29% in the past three weeks, and it now has the potential for a 20% slide on its 430p target price. But Antofagasta still has more than £2 billion in the bank and is well-placed to ride out the recession. RBS has also slashed its target for Xstrata, down 25¼p at 321p, from 1100p to 470p.
Fourth-quarter numbers from Inmarsat got the thumbs-up for the City and the shares in the satellite communications specialist rose 17¼p to 447¼p. Investec Securities has upped its rating from sell to buy and says the numbers, showing year-on-year revenue growth of 18%, demonstrate the company's resilient business model.
