MARKET REPORT: Bearish Boris rattles pubs and restaurants

First it was airline stocks, now it’s pubs and restaurants.

The rise of the Delta variant and increasing uncertainty about whether the Government will lift the final Covid restrictions on June 21 has dealt another blow to the struggling leisure sector.

The Prime Minister warned on Wednesday that it was still too early to tell if the country would be able to keep to the scheduled ‘Freedom Day’. 

Uncertainty: Prime Minister Boris Johnson warned on Wednesday that it was still too early to tell if the country would be able to keep to the scheduled ‘Freedom Day’

Boris Johnson said: ‘I think what everybody can see very clearly is that as cases are going up, and in some cases hospitalisations are going up.’

That was seen by some as a way of laying the groundwork before pushing the date back but he will not make a decision until Monday. 

Traders digested his bearish tone by selling out of several big pub and restaurant groups that were banking on social distancing being scrapped to drive up sales.

Wetherspoon slid 3.8 per cent, or 51p, to 1279p, while Frankie & Benny’s and Wagamama-owner The Restaurant Group fell 4.6 per cent, or 6.4p, to 133.2p. 

Stock Watch – Hurricane Energy  

Things went from bad to worse at Hurricane Energy as it told shareholders there had been a fault at its North Sea oil and gas field.

A pump caused a blip in production on Tuesday before restarting at a reduced rate.

The problem is being investigated. The news came a day after the minnow confirmed a one-off meeting had been scheduled for July 5, when an activist investor wants to unseat five board members and install two of its own in their place.

Shares in the AIM-listed group, which traded at more than 50p two years ago, fell 6.6 per cent, or 0.08p, to 1.12p.

Marston’s (down 2.3 per cent, or 2.15p, to 91p) and All Bar One-owner Mitchells (down 2.6 per cent, or 8p, to 303.2p) closed in the red.

The doubts also hit catering giant Compass, which fell 3.1 per cent, or 51.5p, to 1594.5p, as big events might need to be delayed or cancelled.

And Cineworld flopped again too, dropping 2.7 per cent, or 2.46p, to 88.34p.

Shares in Comptoir, which owns the Middle Eastern restaurant chain Comptoir Libanais, made gains after the group warned more restaurants would have to shut in London and Leeds within the next year. 

It has already shuttered sites at Gatwick, Heathrow and central London.

Annual losses at the AIM-listed firm, whose stock rose 2.9 per cent, or 0.25p, to 8.75p, spiralled to £8million from around £520,000 the year before.Elsewhere, investors cheered bright forecasts from Auto Trader and Mitie.

Profits at secondhand car seller Auto Trader slumped by more than a third last year, which it blamed on offering free listings to retailer customers during lockdowns. This cost the company as much as £7million a month.

But it is ploughing money into upgrading its online services and believes that online car shopping will far outlast the pandemic.

Shares rose 6.5 per cent, or 37.8p, to 615.6p as boss Nathan Coe said ‘bonkers’ demand was showing no signs of wearing off despite the rapid vaccine rollout.

This helped nudge the wider FTSE 100 0.1 per cent higher, up 7.17 points, to 7088.18. Mitie was the top riser on the mid-cap index after boss Phil Bentley said the company was starting to see some ‘green shoots of recovery’ in areas of the business that had been hit hard by the pandemic.

The group, which has worked on Covid testing sites, said annual revenue was up from £2.2billion to £2.5billion in the year to March. 

But a 5.9 per cent, or 4.2p, rise to 75.9p was not enough to keep the FTSE 250 in the black – it slid 0.7 per cent, or 150.21 points, to 22,608.76.

Hobby company Hornby has made its first profit in nine years after adults returned to their childhood toys during lockdown. Shares, however, dipped by 0.9 per cent, or 0.5p, to 58.5p.

Ted Baker was also due to publish annual results yesterday but delayed them for a third time, blaming Covid for disrupting the auditing process. 

The fashion retailer is now due to release the figures, expected to show a loss of £65million, on June 14. Shares dropped 3.2 per cent, or 5.6p, to 167.5p.

Sub-prime lender Amigo – down 0.6 per cent, or 0.05p, to 8.2p – indicated again that it could go bust, following the High Court’s decision last month to block a rescue plan that would have set limits on the amount of compensation it would pay to customers complaining they had been mis-sold loans.

Amigo said that ‘under all reasonable scenarios’ in the absence of a deal it was insolvent.