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Yesterday's trading:Thomas Cook takes off

By Geoff Foster for MailOnline
Updated: 02:30 EDT, 20 June 2007

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Don't just book it, Thomas Cook it. How many times have you heard that slogan whilst contemplating your next holiday?

Shares of the global holidays powerhouse, with revenues of almost £8bn, got off the ground yesterday following the merger of Britain's MyTravel with German-owned rival Thomas Cook. From an opening level of 326p, they gained altitude to touch 348¾p and close at 333p on turnover of 6.5m shares.

The merger brings together two of the biggest names in travel. It sees My Travel's Airtours, Going Places and Direct Holidays brands added to Thomas Cook stable, servicing some 19m-plus customers including more than 6m in the UK.

Broker Shore Capital expects Thomas Cook to reveal improved trading conditions when it rolls out interim figures next Wednesday. That compares with weak comparatives due to the World Cup, a hot July and terror alerts in August last year. Management is also expected to update City number crunchers on the merger synergy target of some £110m over the next three years.

Rival JP Morgan believes the new business will have leading positions in many of the key European markets. Should the 2007 summer season perform in line with expectations, the shares could trade at £4.

City sunseekers must have been delighted to hear that discount airline Ryanair €0.19 easier at €4.98 has decided to extend its £10 seat sale into the summer months of July, August and September. Chief executive Michael O'Leary said offering 3m seats for £10 including charges and taxes, which will cost the company between £25m and £45m, would stimulate late bookings.

The move exerted more pressure on its rivals. Indeed, fears of an escalating price war saw easyJet nosedive to 525p before closing 14½p down at 533½p and saw British Airways slide 11½p to 424½p.

The Footsie lost an 18-point gain to close 53.3 points off at 6,650.2. Fund managers locked in profits when Wall Street opened 35 lower following a slide in new US home starts in May. Dealers were also cautious ahead of today's minutes of the Bank of England's June meeting which are expected to show that two of the nine member rate-setting committee voted against the decision to hold loan rates at 5.5%, wanting a rise to 5.75%.

Back office company Capita, which looks after London's congestion charging scheme, jumped 12½p to 746½p on a Citigroup recommendation and target price of 805p. The broker highlights the group's large contract wins of late that improves its growth prospects in the insurance and life operations.

Awaiting an increased offer from Akzo Nobel following its strong rejection of the Dutch giant's £7.2bn or 600p a share offer, ICI touched 647½p and closed 4½p up at 639p.

Buying on the back of a Credit Suisse recommendation left mining giant Rio Tinto 17p higher at 3903p.

Disappointing first-quarter like-for-like sales growth of 4.7% dragged Tesco 22¼p lower to 434½p. The news dampened sentiment in the rest of the High Street and Marks & Spencer shed 17½p to 670p.

Vodafone declined 3.1p to 158.9p after AT&T boss Randall Stephenson said the US telecoms giant is not interested in bidding for the UK mobile phone giant.

Revived private equity takeover gossip helped troubled music retailer HMV boogie 2¾p higher to 118p. How shareholders must rue the day the board rejected a 210p-ashare, or £844m offer, from Permira. The private equity firm is now free to bid again and might just find the HMV is ready to bite its hands off should it put a slightly increased offer on the table.

Balfour Beatty added 9p at 451p on a Panmure Gordon recommendation and target price of £5. The broker expects a positive interim trading statement early next month.

Fast growing Gourmet Burger Kitchen and Tootsies restaurant group Clapham House rose 12½p to 384½p on news of sharply higher turnover and annual profits.

Reflecting the rapid expansion of the group in the year under review, sales soared to £45.9m from £17.3m. The group said it is likely to be a player in the ongoing consolidation of the UK market for casual dining either as an acquirer or acquiree.

Plans to develop a new airline in Angola for the passenger, freight, leasing and charter markets, attracted buyers to Lonrho, 3¼p better at 38½p. Bullish noises from Ambrian Partners on the Plantations sector helped REA Holdings climb 21p to 555p and Anglo-Eastern Plantations 16½p to 399½p.

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