The M&C20 outperformed the FTSE all-share index this week by one of the biggest margins since M&C Report began monitoring the share prices last May, with ‘mid-cap’ companies driving the growth.
The index rose by nearly 1% to 1,234, while the FTSE all-share fell by 3.2%, leaving a differential of more than four percentage points.
Domino’s, which today named David Wild as its interim chief executive, saw its share price climb 3% after a 4.2% fall last week. There was also growth for Shepherd Neame (+4.4%), Young’s (+3.6%), Prezzo (+2%) and Fuller’s (+2%), which yesterday reported a strong performance over the festive period and beyond; like-for-like sales in its managed division increased by 7.2% in the 10 weeks to 25 January.
Leading analyst Douglas Jack at Numis reiterated his Add recommendation and 1050p Target Price for Fuller’s following the update. “We are holding our forecasts, although the risk to numbers remains on the upside, in our view,” said Jack.
“Although trading is ahead, a few major refurbishment projects are being brought forward into 2014E, bringing additional refurbishment downtime, repairs and re-launch costs. However, this and ongoing strong trading increases the forecast upside for 2015E. With net debt/EBITDA at 2.6x, the greatest potential upside remains through faster expansion, which the company has the capability to exploit.”
Mitchells & Butlers, which also reported trading figures this week, experienced a more modest share price rise of 0.4%. The company reported a 2% increase in like-for-like sales in the 17 weeks to 25 January, helped by a 2.6% rise in sales across the three-week festive period to 4 January and milder weather compared to last year.
Some other national operators fared less well. Punch Taverns’ share price slipped by 7.9% after a group representing its noteholders said on Monday that it’s unable to support the pubco’s latest debt restructure proposal.
Elsewhere there were share price falls for The Restaurant Group (-1.1%), Spirit (-1.5%) and Greene King (-3.1%) - the latter company also saw its share price fall 4% last week. Greene King’s market capitalisation (£1.87bn) is now just £12m ahead of Mitchells & Butlers’ (£1.86bn); on 17 January the difference was £138.3m.
