Eclectic Bars was this week inducted into the M&C20, after its listing on the Alternative Investment Market (AIM) yesterday.
The company raised £15m through the IPO, much of which will be used to fund site acquisitions, including potential premises for its Sakura and Lola Lo brands in Guildford, Exeter and Liverpool.
Its shares were introduced at 160p and bounced to 171p before settling back to 162.5p at the time of writing.
The M&C20 had a bumper week, jumping 2.5% or 28 points to 1,151, its highest level since late September – driven largely by the strong performance of the managed pub chains. The FTSE All Share, by comparison, was flat.
Mitchells & Butlers share price increased by 8.5% to 415.4p, after posting full year results around 2% ahead of expectations, driven by lower than expected interest costs. Simon French of Panmure Gordon, who keeps a Sell recommendation on M&B shares, commented: “Margin performance was in line with expectations but current trading remains disappointing with LFL sales growth flat, despite a significant London presence and a favourable trading backdrop. The resumption of dividend payments appears at least 12 months off and the group’s capital structure remains inefficient. All are solvable problems and M&B is potentially a compelling turnaround story.”
Greene King’s shares were up by 6.0% to 871.5p, their best price since early August, JD Wetherspoon’s ahead by 4.2% and The Restaurant Group’s advanced by 3.0%.
Marston’s shares were flat (down 0.3% to 149.p) off the back of its full year results, which were in line with market expectations, and its announced plans to dispose of 202 for £90m (a 7.6x EBITDA multiple) to New River Retail. French said: “These are solid results, accompanied by a strategic disposal with proceeds used to reduce expensive debt. However earnings will be diluted (by c4%) in the short-term.”
Punch Taverns sprang back from recent declines to finish the week up 11.3% at 11p after giving a slightly better than expected Q1 trading update. But the market still awaits the outcome of its financial restricting negotiations with bondholders, and the uncertainty that continues to cause means most analysts see only downside from the current share price.
Prezzo was the other notable climber this week, up 5.3%; while Enterprise Inns was the biggest faller, off 3.6% to 141p. French commented: “Government intervention in the [tenanted & leased pub] sector through the form of a statutory code remains an unwelcome but unlikely prospect.”
