The M&C20 (+0.5%) underperformed a surging All-Share last week. The latter was up by 2.8% driven, in large part, by a rebound in oil stocks, global mining company shares listed in London and a number of international mega-caps such as Standard Chartered bank.
Domestic stocks including hospitality names on the other hand, were more mixed. In the leisure sector, larger cap stocks, as is often the case when the market moves sharply, performed more broadly in line with the wider index than did their smaller brethren and SSP Group, Greene King, M&B and Domino’s Pizza recorded gains of 3.1%, 0.8%, 0.8% and 1.7% respectively.
The pub companies turned in varying performances, though the group was better for choice. In addition to Greene King, mentioned above, Marston’s shares rose by 1.4% on the growing belief that the company has traded through the worst of the dilution caused by the disposal of its tail-end tenancies and Punch Taverns’ shares rose by a further 3.0%, albeit after some precipitous earlier falls, on relief that clauses within the Market Rent Option legislation look as though they will allow the exclusion from MRO in the case of ‘significant investment’ or franchise arrangements.
Restaurant Group gave back 1.1% last week as the shares continued to settle after its good but perhaps well-flagged and fully-discounted full year numbers. The extremely good cinema release schedule flagged by Cineworld (up 2.2% last week) failed to offer much support to RTN though there are few who deny that the latter should have a good 2015.
JD Wetherspoon held steady (up 0.1%) after its Friday 13th (H1 numbers) fall whilst Enterprise Inns, somewhat surprisingly, saw its shares fall by 5.5% despite what should have been seen as good news on the MRO.
Shares in Spirit Pub Co were down by 0.7% but, as the group is the subject of an agreed bid from Greene King (up 0.8% as mentioned above), little by way of a gap should be allowed to open between the two share prices.
Amongst the regional pub companies, Fuller, Smith & Turner (+1.7%) and Young & Co (down 3.4%) saw their shares move in opposite directions whilst the shares of Adnams, Thwaites and Heavitree moved little over the week.
Across the newer issues, shares in Patisserie Valerie continued their impressive run (+1.9% on the week) whilst newly-listed Revolution Bars issued paper at the bottom of its indicated range and then immediately went to a discount. As of this morning, buyers of the shares at issue were looking at a 4.7% loss.
Commentary supplied by Mark Brumby at Langton Capital
