Cliff Weight asks if Thomas Cook were misleading investors and if the FCA should investigate.
The 3 May RNS looks unduly optimistic in the light of today’s announcement. Thomas Cook’s directors need to be held to account for making such positive statements, which may have misled many individual investors.
The shares were shorted over 10% before the 12 July announcement. This suggests the directors were slow to act to inform the market. Individual investors have a right to be treated fairly and prima facie Thomas Cook appears to be in breach of S172(f) of the Companies Act. The FCA should investigate what has happened.
Individual investors in the company have lost over 95% of their investment and now look unlikely to recover any value.
This is big company with £9.5 billion turnover and a very long history and track record. It is sad that it has got itself in this position where its market cap is less than £100 million and its debt is more than 12 times that amount. Clearly this is unsustainable.
For your convenience I have highlighted in bold italics the concerning parts of recent RNS’s from Thomas Cook.
Background RNS statements
RNS Number : 0829Y
Thomas Cook Group PLC
03 May 2019
Statement re bank financing
3 May 2019 – Thomas Cook Group plc notes the recent media speculation regarding discussions in relation to its financing requirements.
As stated in our first quarter trading announcement of 7 February 2019, Thomas Cook kept a healthy level of liquidity headroom through the last winter cash low period, maintaining a minimum liquidity buffer within our targeted range of £150 million to £200 million.
Since that update, the business has moved into its key summer booking period where the Group’s liquidity position continues to strengthen. Looking ahead to Winter 2019/20, we have taken the proactive step of engaging in discussions with our lending banks now to ensure we have both the financial flexibility necessary to maintain an appropriate liquidity buffer through the winter, and also the ability to continue to invest in our strategy of growth.
Peter Fankhauser, Chief Executive Officer of Thomas Cook, said: “We have taken a number of prudent early steps to de-risk our business by taking out capacity in a challenging consumer environment. We have also taken the proactive step to approach our financing partners and are engaged in constructive discussions to ensure we have the flexibility and resources to continue investing behind our plans over the long-term.”
We will provide an update on current trading on the publication of our H1 2019 interim results, due on 16 May 2019.
RNS Number : 3096P
Thomas Cook Group PLC
07 February 2019
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014
7 February 2019
First Quarter Trading Statement for the three months ended 31 December 2018
2018/19 started in line with expectations; strategic review of airline announced