The M&C20 was up 1.7% this week to 1,370 points as strong performances from big caps Domino’s and Cineworld lifted the index. The All-Share was up 0.8% to 1,089 points as utilities, oil and gas stocks held the wider market back.
Domino’s Pizza Group’s shares had a very strong week, ending up 8.2% after reporting good full year numbers on Thursday. Like for like sales at the company were up 11.3% with system sales up 14.6% leading to several brokers upgrading the stock.
Greene King and Marston’s were both up 2.8% this week. Although Marston’s and Greene King have been disposing of their bottom end pubs for some time, recent broker notes have highlighted the fact to the stock market which seems to have reacted positively. Though such disposals will have been earnings-dilutive in the short term, the quality of earnings at both companies is likely to have improved.
Cineworld shares were up 4.6% this week following the strong box office performance of the Fifty Shades of Grey film. The Restaurant Group also says it benefited from the film with 75 Frankie & Benny’s reporting record breaking weeks as a result of its opening weekend. The shares rose 1.4% over the week having reported final results on Friday.
Fulham Shore shares were down another 2.4% to 14p having peaked at around 23p in December last year. At 23p per share, the company would have been valued at over £70m.
Enterprise Inns saw its shares down 6.4% while Punch Taverns was 2.4% lower. The Small Business, Enterprise and Employment Bill, which includes the Market Rent Only clause for pub tenants, is currently going through the House of Lords with a decision expected in early March.
Patisserie Valerie was down 5.6% this week. The shares have performed well since the company listed at 170p back in May 2014 as investors became more hopeful about the scalability of the offer following plans to open 20 sites this year.
Next week will see SSP Group’s AGM. The company is one of the few whose shares have performed well since listing last year. Next week also sees PMI and mortgage approvals data which may have some read across to consumer health.
Commentary provided by Will Brumby of Langton Capital
