Thursday morning business bulletin

Sep 25 2008 By Andrew Mernin

A cloud hung over Thomas Cook shares today after a City firm cut its price target on the FTSE 100 Index stock.

Investec’s downgrade sent the holiday company down 6% or 13.75p to 209.75p and dragged Thomson rival TUI Travel 8p lower to 198p, despite being Investec’s pick of the travel sector.

The wider market was in subdued mood as investors continued to await details of the US bail-out plan for the banking sector. With little in the way of corporate news in London, the FTSE 100 Index was 1.3 points higher at 5096.9 after an hour of trading.

The biggest gain came from Norwich Union owner Aviva, which cheered 18.25p or 4% to 509.5p, while RSA Insurance gained 4.2p to 147.7p.

ITV was near the top of the FTSE 250 Index risers board after watchdog Ofcom indicated it may reduce the broadcaster’s public service obligations. Shares were 2.75p higher at 45p.

Bradford & Bingley moved 2.25p lower to 22.75p amid continued concerns about interbank lending rates and fears it will not attract a buyer.

The Lloyd’s of London insurance market today said rising claims costs and lower investment income contributed to a 47% fall in half-year profits.

Lloyd’s chairman Peter Levene said the drop to £949m came as ``no surprise", given a softening in rates from their recent peak.

The figures cover the period to the end of June and do not include the impact of recent North Atlantic hurricanes Gustav and Ike.

Lloyd’s said: "While it is too early to assess the final economic cost of these storms, undoubtedly it will add pressure to underwriting earnings."

It warned that profitability in many of its lines was "now questionable" with current pricing levels leaving little margin to cover major catastrophe losses.

Today’s half-year report said claims frequency was rising, particularly in the property, casualty and energy lines, fuelled in part by the deteriorating economic climate and political instability in various regions.

Menswear retailer Moss Bros today revealed wider half-year losses after results were hit by the impact of two store closures and falling sales.

Underlying pre-tax losses for the six months to July 26 increased to £1.6m from £700,000 a year earlier as group like-for-like sales slipped 2.6% and total sales dropped by 2.9% to £61.1m.

However, the firm said trading in the first eight weeks of its second half had improved, with same-store sales level against the same period a year ago. It added it was comfortable with City’s forecasts for full year figures.

The company, which trades through the Savoy Taylors Guild and Cecil Gee fascias, is currently carrying out a three-year strategic plan, which will see it re-invest in its current portfolio, grow the core Moss chain and develop its Asian supply chain.

It has also moved the focus of its mainstream Moss stores away from the lower priced end of the menswear market, where competition is strongest.

Chief executive Philip Mountford said customer tastes were shifting towards higher priced contemporary and fashionable formal wear.

The pound at 9am was US$1.8596 compared to US$1.8506 at the previous close while the euro at 9am was £0.7908 compared to £0.7924 at the previous close.