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Published on Thursday, December 6, 2018

Thomas Cook's price rises after chairman snaps up shares






Thomas Cook's share price rose yesterday after chairman Frank Meysman bought £80,441 worth, which investors took as a personal show of faith in the operator.


The London Stock Exchange revealed that Meysman bought 373,000 shares at 21.57p each on Wednesday, after which the price rose 40% to 31.88p in the afternoon.

It's still well below the annual high of 146p reached in May, but analysts have interpreted Meysman's investment as a positive sign.

According to the Press Association, non-executive director Lesley Knox also bought 208,778 shares at a price of 22p each, totalling £47,163.


Invesco, the fund manager that owns 15.2% of Thomas Cook, dismissed the earlier slump in the operator's share price following last week's revelation that its net debt had risen to £389 million following a huge operating loss for the year as an 'overreaction'.


Invesco's global equities fund manager Stephen Anness told The Times: "Much of what we heard from Thomas Cook last week was a repeat from what we already knew — that trading suffered from the exceptionally hot summer. That was exaggerated by the unexpected change to accounting, a change we very much approve of as it more clearly reflects the underlying business."

Anness also played down fears over the group's rising debts and its request to its lenders for extra headroom on its covenants. "The market has taken fright, but from what we see the fundamentals remain robust," he said. "From our conversations with the company, the balance sheet and liquidity is intact. This seems an overreaction."

However, the debt ratings agency Moody's downgraded its rating on Thomas Cook from B1 to B2 and changed its outlook from 'stable' to 'negative'.

It said: "Our rating action reflects the deterioration of credit metrics after unfavourable earnings development in the fiscal 2018 and the group's weakened liquidity."

Moody's also sounded a warning over the impact of Brexit talks, suggesting that uncertainty could lead to later bookings, as happened this summer.

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