The M&C20 had a very strong week last week, and has again outperformed the wider market this week rising 0.7% against a 0.3% drop in the FTSE all-share, Will Brumby of Langton Capital writes.
Greene King and Spirit shares were practically unchanged last week, underperforming rises in the other pubcos’ stock, as uncertainty over the Competition and Markets Authority’s decision on their merger loomed depressed the shares. This week GNK and SPRT have outperformed their peers rising 1.7% and 2.1% respectively. The CMA has found that competition in 16 local areas will be diminished by the merger, and wants the combined group to address these issues. Greene King CEO, Rooney Anand, has called the CMA’s decision ‘sensible’ and said that the group was ‘confident we will be able to offer suitable undertakings’. The shares outperformance this week suggests that the market believes the two groups are now closer to a merger, which the company has suggested should be completed before the end of June.
Marston’s shares were down 2.9% this week. The stock has been strong recently and looks to have moved into a new trading range, with the shares currently around 165p, having traded in the 140p-155p range for the last few years.
Punch and Enterprise shares continued to rise with Enterprise up 3.8% and Punch up 8% as the investors become increasingly optimistic regarding the companies’ plans for converting their estates to lessen the impact of the MRO. Enterprise had its first half numbers this week as well as a strategic review in which it announced plans to create a managed estate of around 800 pubs and a commercial property business with around 1,000 property assets.
Fulham Shore shares were down 9.6% this week. The shares have risen on news of new openings over the last few weeks, however, the shares are fairly tightly held, meaning the stock is susceptible to sharp price movements.
Next week sees half year numbers from Patisserie Valerie on Thursday and Young’s full year numbers on Friday. Pat Val’s shares rose sharply back in December as the market became aware of the group’s roll out potential following announcements to the press that the group would be adding 20 sites this year. Regarding Young’s, there are some fears in the market that, though good operators, the London based pub companies like are currently fairly highly priced, and with fears growing that the market in the capital may be slowing, investors will likely look for reassurance from Young’s on Thursday.
