A second consecutive week of share price gains for leisure sector PLCs helped push the M&C20 index up 1.0% to 1,164. But it wasn’t enough to outperform the FTSE all-share, which grew 1.7% to a new high of 1,041.
The biggest movements within the M&C20 were among the small caps, with London restaurant operator Richoux up 11.5% to 29p, and Dim T and Wildwood brand owner Tasty up 10.3% to 122p.
The latter recently raised £2.5m via a share issue and said it will use the funds to continue to acquire additional restaurants.
Cineworld benefited from positive analyst comments to jump 6% to 398.7p after revealing that group revenues grew by 11% in the past 16 weeks. Nick Batram of Peel Hunt commented: “Q3 was disappointing for the industry, but Cineworld’s performance during this period is reassuring. The benefits being derived from digital/CRM and the Unlimited card has enabled Cineworld to outperform the market, and there is much more to come. There may be some short-term consolidation, but long term the attractions remain.”
Prezzo, which this week launched an app that enables diners to pay for their meal using their smartphone, leapt 4.6% to 122.85p.
Other risers included Young’s (up 3.3%), Marston’s (up 2.3%), The Restaurant Group (up 1.7%), Greene King (up 1.6%). But there were slips for Punch (down 2.5%), Fuller’s (down 2.2%) and Enterprise (down 1.5%).
Spirit was up 1.0% to 74.5p after announcing its full year results on Tuesday. Panmure Gordon downgraded its current year EPS forecast by 8%, and next year’s by 6%, following a presentation by CEO Mike Tye and FD Paddy Gallagher, who insisted that a more flexible debt structure will provide Spirit with the headroom to implement its growth strategy which will also result in assets and cash flow accumulating at the PLC level.
“Assuming the targeted take up of the A6 and A7 bonds, Spirit becomes a higher quality investment and we expect the group’s discount to the peer group to narrow sharply. The stock trades on a CY 2014E adjusted EV/EBITDAR of 7.8x compared to the sector on 9.0x. We reiterate our Buy recommendation and 110p Target Price, implying c49% potential upside,” said Panmure’s Simon French.
