The M&C20 slightly outperformed the market this week, rising 0.6% vs the All-Share’s 0.1% rise. The wider market was held back by financial stocks and a sharp downward move by the food retailers following Tesco’s numbers on Wednesday.
Greene King and The Restaurant Group were up in line with the M&C’s index, rising 0.6% apiece, while Domino’s Pizza was up 1.3% recovering most of last week’s loss. M&B underperformed its peers falling 1.2% this week, with Marston’s up just 0.3%, having outperformed the other pub companies over the last few weeks.
SSP Group’s shares ended the week 2.7% lower. The stock is now close to several brokers’ price targets, and with the oil price strengthening somewhat this week, some investors may be worried about future passenger numbers.
Punch was up 5.9% following its interim results on Wednesday. Investors will likely have been reassured that the company is taking steps to develop an operational answer to the looming MRO, however, the shares are likely to remain subdued until the secondary legislation to the MRO bill is confirmed in August. Enterprise Inns has its first half numbers on 12 May, and there will likely be a strong read across for Punch should ETI update on strategy.
Wetherspoon shares were up 2.9% this week. The shares had been stuck around the 760p level for several weeks following the group’s interim results in March, however the shares ended this week above the 780p level. Since their interims the company has bought back more than £8m worth of shares at an average of 758.9p.
Cineworld shares were up 3.3% this week. The stock has been the subject of several broker upgrades recently and announcements regarding the film schedule for the next few years have likely been well received, with the new Batman vs Superman film due in 2016 and Pacific Rim 2 announced for summer 2017.
Next week first half numbers from Spirit on Wednesday and Whitbread produces its full year numbers on Tuesday. Though Whitbread is not a constituent of the M&C20 its comments will likely have some read across for the sector as a whole.
Commentary by Will Brumby of Langton Capital
