FTSE 250 movers: TUI flies lower on capital raise plans

(Sharecast News) - FTSE 250: 19,042.41, -0.23% at 1519 GMT. Holiday giant TUI said it would raise cash to repay state support during the Covid pandemic as it posted a return to annual profits and said underlying earnings would increase significantly in 2023, despite market uncertainty.

The share issue was expected to raise €1.6-€1.8bn, the company's chief financial officer Mathias Kiep said. In an announcement released on Thursday, TUI said it would use the capital increase to repay Germany's Economic Stablisation Fund (WSF) €730-€957m.

In return it will receive back the right to buy back TUI shares held by the German government. It also plans to cut its credit lines from development bank KfW.

TUI reported underlying earnings (EBIT) of €409m for the year to September 30, compared to the €2bn loss a year earlier as travel rebounded from the Covid pandemic. Revenue more than trebled to €16.5bn.

The company said it planned to operate a winter programme at 84% of pre-pandemic levels, with bookings for the season up 134% against last year.

"Positive trading momentum has continued into FY23 for Holiday Experiences with volumes and booked occupancy in all segments well ahead of prior year," the company said.

Analysts at broker Peel Hunt lowered their target price on the stock to 148p from 190p, noting that the rights issue would still require shareholder approval and would not take place until February "at the earliest" and it would be difficult for the share price "to make progress" in advance of any raising.

Watches of Switzerland shares fell, despite backing its full-year guidance on Wednesday as it reported a rise in first-half profit and revenue amid solid demand.

In the 26 weeks to 30 October, statutory pre-tax profit jumped 28% to £83m, while revenues increased 31% to £765m, or 23% at constant currency.

The company hailed continued strong demand for luxury watches and jewellery, with growth driven by increases in average selling price and volume.

The retailer pointed to ongoing strong momentum in the US, with revenue there up 86%, or 60% at constant currency, at £311m. In the UK and Europe, meanwhile, revenues were 8% higher versus the same period a year earlier at £454m, driven by domestic clientele.

Luxury watches continued to benefit from a strong demand environment, with revenue up 31%, driven by increases in average selling price and volume. Luxury jewellery also saw revenue growth, of 38%.

Chief executive Brian Duffy said: "Trading in the Holiday period so far has been in line with our expectations and our guidance for FY23 remains unchanged.

"We look ahead with confidence as we continue to deliver on our Long Range Plan objectives of maintaining our leadership position in the UK, becoming the clear leader in the US, and capitalising on the growth potential in Europe."

FTSE 250 - Risers

Hochschild Mining (HOC) 72.10p 5.18% Hammerson (HMSO) 24.26p 3.99% Ferrexpo (FXPO) 160.20p 3.96% UK Commercial Property Reit Limited (UKCM) 60.90p 3.75% Syncona Limited NPV (SYNC) 193.80p 3.42% Morgan Advanced Materials (MGAM) 314.00p 3.29% Marshalls (MSLH) 289.20p 2.84% Assura (AGR) 56.65p 2.72% Tritax Big Box Reit (BBOX) 152.60p 2.35% Grainger (GRI) 258.40p 2.13%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 2,200.00p -8.71% TUI AG Reg Shs (DI) (TUI) 135.60p -8.16% Watches of Switzerland Group (WOSG) 898.00p -6.36% Moonpig Group (MOON) 111.90p -6.28% ASOS (ASC) 537.50p -5.37% 888 Holdings (DI) (888) 89.95p -4.21% Helios Towers (HTWS) 111.70p -4.12% Petrofac Ltd. (PFC) 79.55p -3.87% Molten Ventures (GROW) 383.40p -3.81% Bridgepoint Group (Reg S) (BPT) 198.40p -3.13%