Morning Financial Press Review
Paul Kettle
AM Press Round-Up -4 min read
06:33, 13th August 2019

Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Talks are under way with its bondholders over a further £150 million cash injection to ensure that Thomas Cook Group (TCG) FOLLOW  does not run out of cash over the coming winter. The money would come on top of a proposed £750 million recapitalisation that will hand control of the business to Fosun International, the Chinese conglomerate that has an 18.1% stake. In a statement yesterday, Thomas Cook said that the £150 million would “provide further liquidity headroom through the coming 2019-20 winter cash-low period and ensure the business can continue to invest in its strategy”. Analysts said that recent market fears caused by the collapse of Late Rooms and Super Break, the holiday providers, and a profit warning from On the Beach were likely to have been a factor in the decision to seek an extra cash buffer. 

M&C Saatchi (SAA) FOLLOW  has been punished by investors after admitting failings in its accounting had triggered a one-off charge of £6.4m. M&C Saatchi, which operates an international network of agencies, said that an internal audit of accounting at some of its British subsidiaries had uncovered £4.9m of “specific issues”. The company said it had set aside a further £1.5m to cover any further problems that may be uncovered by outside investigators in a further ongoing review. The accounting failings relate to revenue recognition policies that were flagged up in May by KPMG, M&C Saatchi’s auditor, as “over-aggressive”.

Rolls-Royce Holdings (RR.) FOLLOW is facing further worries after parts from one of its troubled Trent 1000 engines appeared to drop from a jet taking off in Rome. Shares in Rolls fell more than 3% in early trading on Monday following reports of the incident, which took place as the Norwegian Boeing 787 took off on Saturday. According to local reports and images on social media, 25 cars and a dozen houses in the Rome suburb of Fiumicino were damaged by fragments from the aircraft. High-temperature pieces of the engine, ranging from about two to four inches in length, were reported to have fallen from the 787 as it was climbing through 1,200ft shortly after take-off. Rolls has so far earmarked £1.6bn to sort out problems with the Trent 1000 since issues with it first emerged in 2016.

An American bear raider has dismissed as “preposterous” a claim by Burford Capital (BUR) FOLLOW  about market manipulation of its shares, calling it an act of “pure desperation” to divert attention from the litigation funder’s own actions. Burford, whose shares plunged last week after a highly critical report by Muddy Waters, said yesterday that it had found evidence from an analysis of trading. More than £1 billion was wiped off the value of the stock last week after Muddy Waters accused the company of “egregiously misrepresenting” its return on investments.

Tullow Oil (TLW) FOLLOW  revealed a “potentially transformational” oil discovery off the coast of Guyana, causing the value of its partner in the country – Eco (Atlantic) Oil & Gas NPV (DI) (ECO) FOLLOW  – to rocket. The discovery, which could exceed 100m barrels, was made in the Jethro-1 well, more than a half a mile below the sea. It lies in the Orinduik block, in which Tullow owns a 60% stake. Eco owns 15% of the block and its shares soared. “This substantial and high value oil discovery in Guyana is an outcome of the significant technical and commercial focus which has underpinned the reset of our exploration portfolio,” said Paul McDade, Tullow’s chief executive. “It is an excellent start to our drilling campaign in the highly prolific Guyana oil province.” The companies hope that further drilling at nearby sites will uncover similarly bountiful reserves. Analysts at Jeffries said that Tullow had “proved its exploration credentials once again”.

The auditor of Staffline Group (STAF) FOLLOW  has resigned as Britain’s big accounting firms look at their client lists to ensure that they are not likely to cause embarrassment. PWC stepped down this month and agreed not to take part in the recruitment business’s tender to find a new auditor. The Big Four firm indicated that a section of Staffline’s most recent annual report, in which it warned that there was “material uncertainty” about the group’s ability to continue as a going concern, was connected to the resignation. In Staffline’s 2018 annual report, PWC said that lenders had waived breaches of covenants attached to its debt facilities and warned that further breaches were likely for the 12 months from June 30, 2019, because of increased debt and lower profits. It said that the business was reliant on the continuing support of its lenders.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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