The M&C20 marginally outperformed the All-Share in the first full week of the New Year, rising 0.6% to 1,261 points while the All-Share was up 0.3% to 1,027 points.
M&B and The Restaurant Group were two of the biggest risers last week with M&B up 7.4% and TRG up 5.9%. The rises were likely due to anticipation of good trading over the Christmas period from the two companies. TRG has updated its results for the Christmas period, seeing sales over the festive period up 5%, however the rest of December appears to have been slower for the company.
SSP Group was among the fallers this week with an 8.4% decline in its share price. Its position as an operator in travel hubs may have worried investors in the wake of terrorism in France and the presence of Ebola in the UK. The group is also suffering from the translation effects of a weak Euro, which has turned decent like for like growth of 2.7% on a constant currency basis for the first quarter to a decline of 0.1% in sterling terms.
Fulham Shore, the newly listed restaurant chain backed by David Page, also saw a 9.8% decline in its shares to 19p, however this is still several times above the most recent placing price of 6p (which was also the price at which the company exchanged its shares for The Real Greek). Liquidity in the shares will be tight, and there will be relatively few buyers and sellers, meaning large moves in the price are likely to be common until the company becomes more established. Given that the company currently consists of eight restaurants, it seems fair to say the rating was fairly stretched.
Enterprise Inns and Punch also pulled back slightly this week. Both companies saw their shares recover somewhat since the trough post the government’s decision to introduce market rent options for pub tenants. The market will look for some clarification of the beer tie’s future from the House of Lords when the bill is presented there this month.
Greene King is expected to update on its Q2 a week on Monday, which will give us further insight into the industry’s performance over the Christmas period.
Spirit has its AGM on Tuesday 13 January, however, given it is the subject of a bid we don’t expect the company to release a trading statement.
Commentary provided by Will Brumby of Langton Capital.
