Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Thomas Cook [LON:TCG] has published an update of its recapitalisation plan, which will see China’s Fosun acquire at least 75% of equity in the group, along with 25% of the group airline. Although existing shareholders will remain significantly diluted, the company is adamant that this approach is the best when it comes to avoiding any impact on trade creditors or customers. The implementation of the proposed recapitalisation is hoped to be achieved by the start of October.
WH Smith [LON:SMWH] has posted a short pre-close trading update this morning, suggesting full year results will be in line with expectations. The note highlights that the business is making strong progress in developing stores across UK hospitals, its international business is growing strongly with over 400 stores now open overseas and the domestic high street operation is also on track. Cost savings and a profit focused strategy seem to be helping here, although the minutiae of the detail in the full results will be telling, given the uncertainty faced by much of UK retail right now.
An interestingly worded note from De Beers’ owners Anglo American [LON:AAL] this morning over the value of rough diamond sales. The 7th cycle of 2019 is estimated to yield revenues of $280m, down from the $503m for the same period a year ago. The company notes that the downturn is providing its customers with further supply flexibility as mid-stream inventories continue to diminish. Whether investors agree with the optimistic assessment remains to be seen.