Market Report: Tui scorches ahead on talk of a break-up

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Rumours of a break-up of TUI propelled the tour operator to the top of the Footsie today.

Shares in the owner of the Thomson and First Choice brands rose 12p to 1173p as reports suggested the travel giant is considering spinning off its non-core assets.

Brands such as and Crystal Ski Holidays are said to be in line for a separate listing. It follows last year’s merger of British business Tui Travel and German majority shareholder Tui AG.

As part of the revamp, Tui is to phase out the Thomson and First Choice names so that it can sell holidays under a single brand.

Last week’s third-quarter results revealed the group managed to lift underlying profits despite being hit by the terrorist attacks in Tunisia, which cost it €10 million (£7.1 million) in cancellations.

The continued decline of the oil price has assisted Tui shares on the prospect of cheaper fuel for its planes. Deutsche Bank helped the shares fly higher still as it lifted its target price from 1235p to 1385p.

Depressed industrial metals prices spelt more misery for mining stocks, pulling the FTSE 100 index down 26.80 points to 6523.94.

Heavyweight miner BHP Billiton  was among the laggards, down by 12p to 1138p.

Morrisons shed 1.6p to 176.2p as the supermarkets group looks to offload its struggling convenience stores.The smallest of the Big Four chains has held talks with private-equity firms over a possible sale to focus on the turnaround of the main business.


An upgrade to buy from Citigroup saw Wolseley lead the blue-chip risers, up 74p to 4281p, with the broker now tipping the plumbing supplies group’s shares to hit 4725p.

Analyst Ami Galla said: “We see value in the shares on a medium-term view, supported by a strong balance sheet and its strategy to gain share and deliver higher margins benefiting from its operating leverage.”

Costain’s £36 million takeover of Rhead impressed investors, sending the engineer up 7p to 343.5p.

The commodity-price meltdown hit shipping firm Clarkson, down 225p at 2525p after first-half profits fell to £10.8 million from £14.1 million the year before.

Stellar Resources, a David Lenigas venture chaired by long-term business partner Donald Strang, jumped 0.03p to 0.38p after its subsidiary Gold Mines of Wales was granted a six-year exploration licence extension.

New contracts lifted AIM payments group Eckoh, which last month failed to take over Netcall, by 1.5p to 40.5p.

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August 17, 2015 |
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