The M&C20 underperformed against the FTSE All Share this week despite another strong performance from Punch Taverns.
The FTSE All Share climbed slightly by 0.4% to 1,023.83 this week, while the M&C20 fell by 5.6%, from 1,199.9 to 1,132.09.
Punch Taverns, Fuller’s and JD Wetherspoon were the strongest performers, up 16.7%, 1.7% and 1.6% respectively.
Investor confidence in the former appears to have increased further after the company expressed confidence last week that it would complete its debt restructuring in the second half of 2013, while the strong full-year figures from JDW continues to resonate with investors.
Geof Collyer at Deutsche Bank said: “The enigma that is JD Wetherspoon continues to confound and delight. Operationally, the group needs to maintain its rollout programme to generate any momentum, after cost inflation eats up the benefits of lfls growth.
“The key though is that the market has re-rated the shares (+63% in 12 months) despite declining margins and returns, and EBITA that was just 1% above consensus forecasts of 1 year ago. By JDW’s own admission, the pace of lfls growth is likely to slow to less than half of FY’13 and margin pressure still seems to be downward if anything.
“We struggle a bit with the current rating, given the lack of asset backing, but not enough to change our recommendation.”
The rest of the M&C20 experienced declines with Essenden down 13% and the Restaurant Group falling 5.3%.
The strong performance of JDW saw it leapfrog Marston’s in the order of the value of market capitalisation. The top six are: M&B, Greene King TRG, JDW, Marston’s and Domino’s.
