The vow of a bargain lures travellers to duty-free shopping. dufry offered the same provide to shareholders with regards to a sfr500m rights concern on thursday, its 2nd this season. the worlds largest duty-free operator will raise brand-new equity partly to repurchase and delist us subsidiary hudson. the buyback presages belt-tightening. a cannily listed price is scant reason for optimism.

Dufry has lost altitude in parallel with airline teams. 1st full-year operating reduction since 2003 is anticipated. the stock is down 70 per cent considering that the start of the 12 months. high gearing assists give an explanation for remarkable fall net debt was almost four times ebitda in december.

Exchangeability is not an immediate concern. however with a data recovery which is assessed in many years, significant debts heighten danger painfully.

The swiss team currently consolidates the results of hudson, by which it's many share. the repurchase tends to make opportunistic sense written down: hudsons ipo in 2018 lifted sfr671m, internet of prices, and dufry will spend about sfr300m to buy the risk back

Buyout group advent is at the same time willing to spend sfr415m in dufry at a price of sfr28.5 per share. this could lead to dilution as much as one-third for existing investors, based how the liberties concern is priced.

The sfr1bn of price slices focused by dufry this current year illustrates the task ahead. the bulk of savings comes from renegotiating revenue-sensitive contracts with airports.

For airport stores, sales are a purpose of both the mix and quantity of people. footfall is not likely to recuperate before 2023. british airways owner iag has just downgraded its 2021 capability estimates to 27 % below 2019 amounts. a slower data recovery in intercontinental routes indicates fewer large spending guests from emerging markets.

Charts showing chinese flight departures, spend per passenger and influence of covid-19 (lex)

Limitations on clients per store could reduce profits by up to 1 / 2, feels barclays. curbs may possibly continue after passenger numbers recover. that suggests airport retailers, including dufry and ssp for the uk, face an outlook even worse versus airlines whoever slipstream once pulled all of them along.

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