Market report: Airtours shares slump as directors take off for pastures new

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The Independent Online
Shares of Airtours, the packaged holidays group seemingly stretching into the stratosphere in the summer, dived 63.5p to 1,054p as the stock market fretted about more intense competition and senior management defections.

At the height of the holiday season the shares were flying at 1,240p. The departing executives are directors of one of Airtours' UK subsidiaries. They are said to be Paul Evans and Steve Endacott.

The two are joining the troubled Inspirations holidays group taken over by the American travel giant, Carlson, for pounds 42m in July. It was something of a knockdown price with the US group paying 75p a share against the 152.5p peak hit last year.

Airtours professed to be unruffled. A source close to the company thought the market "had grossly over-reacted" to the loss of the two executives.

Still, the departure of Messrs Evans and Endacott comes at a time when the market is already a little apprehensive about Airtours' ability to withstand the price-cutting challenge launched last week by Thomsons, the industry leader.

Second-placed Airtours has had an enjoyable run but the belligerent competition sparked off by Canadian-owned Thomsons could erode industry profit margins. First Choice, the third-largest operator, which once resisted a 150p-a- share offer from Airtours, was unchanged at 96.5p.

The rest of the market was again in form with Footsie rising 33.1 points to 5,046.2; the supporting indices also moved ahead.

Firm Government stocks helped sentiment but there was once again evidence major investment houses were jockeying for positions ahead of today's futures expiry. Market men would not be surprised if the end of the September series is a particularly messy affair.

There are indications major positions have still to be covered and Footsie could experience a heady run, possibly hitting a peak, ahead of the mid- morning expiry.

Tate & Lyle sweetened 8p to 4,124p on stories cash-rich Associated British Foods is thinking of taking advantage of the poor performing shares by mounting a bid.

ABF already has extensive sugar interests and on the surface a strike at T&L would have difficulty escaping a monopolies block. But there is a theory T&L has become so deeply involved in the broader world of sweeteners that a monopolies hurdle may not be insurmountable.

Railtrack's progress continued with the shares getting nearer the 950p Panmure Gordon projection, up 35p to 844.5p. Allied Domecq, the drinks group, was another at a high, 4.5p stronger at 489p.

Standard Chartered, hit by Asian worries, rallied 41p to 858.5p with Credit Lyonnais Laing saying buy. BOC, the chemical group, rose 27.5p to 1,104p on a NatWest Securities push.

Suggestions of a continental strike lifted WH Smith 4.5p to 374.5p and Marks & Spencer put on 13.5p to 609.5p on overseas buying. Sears, figures next week, was again alone and forlorn, falling 1p to a 56.5p low.

The strong pound took its toll of exporters with RMC's comments underlining the impact of sterling's squeeze. RMC fell 55.5p to 998.5p.

Pilkington, the glassmaker, attracted lumpy trading with deals clinched at 158.5p; the price ended off 3.5p at 153p.

Protean, an engineer, is the latest on the under card to attract a bid approach. The shares jumped 45p to 180p. Airtech, involved in mobile telephones, gained 13.5p to 90p after moving into profits. The shares arrived at 68p.

European Telecom dialled a 24p advance to 269p. Chairman Warren Hardy sold almost 5 million shares at 235p; they were placed with institutions by Collins Stewart. Datrontech, the computer group, gained a further 11.5p to 93p on share-buying by finance director Gerard Connolly.

US bid speculation rolled Molins, the tobacco machinery maker, 17.5p higher to 447.5p.

Campbell & Armstrong, the loss-making specialist shopfitter, shaded 0.5p to 4.5p as speculators grew impatient over the failure of the expected takeover bid to materialise. Last month a 10 per cent stake changed hands, with a company called SAS thought to have moved in.

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