MARKET REPORT: Hospitality jumps after fresh energy bill support

Shares in hospitality groups surged after news of more energy bill support from the Government.

Reports emerged over the weekend that Prime Minister Rishi Sunak is due to sign off an extension to the existing support scheme of six to 12 months.

Extra support will also be given to sectors that use more energy, such as hospitality and manufacturing, The Sunday Times reported.

But the package is also expected to remain open to all firms, rather than the original plan of limiting support only to certain industries.

Shares rose among pub and restaurant firms as investors breathed a sigh of relief.

Wetherspoons jumped 2.6 per cent, or 10.6p, to 425.4p and fellow pub group Marston’s climbed 0.2 per cent, or 0.06p, to 37.36p.

Meanwhile, the Restaurant Group, the owner of Wagamama, surged 4.8 per cent, or 1.3p, to 28.4p.

Manufacturing firms, which use large amounts of energy, also posted gains, with packaging firm Smurfit Kappa rising 1.1 per cent, or 34p, to 3068p and rival DS Smith up 1.8 per cent, or 5.6p, to 317.3p. 

Sunak’s move to extend the energy bill support may also provide a lifeline for smaller businesses, many of whom face the prospect of going bust in the New Year as the cost of living squeeze and strikes hit consumer demand over the critical Christmas period.

The Federation of Small Businesses previously warned that a quarter of small companies were at risk of going under without more energy support from the Government, with gas and electricity prices expected to peak next year.

The FTSE 100 was up 0.4 per cent, or 29.19 points, at 7361.31 and the FTSE 250 was up 0.3 per cent, or 60.48 points, at 18648.96. 

Stock Watch – LBG Media

Shares in LBG Media, the owner of website LadBible, shot higher following a bullish trading update.

The company, which publishes content aimed at younger internet users, predicted full-year revenues of £63million, up from £54.5million last year, after a ‘robust performance’ in its second half.

LBG said growth had accelerated in the last six months of 2022 despite a ‘challenging economic environment’.

The shares surged 16.9 per cent, or 11.5p, to 79.5p.

Traders were desperate for some festive cheer in the final week before Christmas despite the ongoing pressures from inflation and higher interest rates.

The outlook has been dimmed slightly by a growing outbreak of Covid-19 in China after Beijing abruptly relaxed restrictions following a wave of protests across the country.

‘As consumers desert streets and hunker down, while companies brace for mass absences, the immediate outlook remains bleak,’ said Hargreaves Lansdown analyst Susannah Streeter.

One area supporting the blue-chip index was oil stocks, which posted gains as the price of Brent crude edged up towards $80 a barrel following reports the US government would begin buying oil to replenish its emergency reserves.

BP shares bounced 2.5 per cent, or 11.2p, to 466.6p and Shell gained 2 per cent, or 44p, to 2287p.

The UK, meanwhile, continued to be buffeted by industrial action with ambulance workers, rail staff and postmen among those scheduled to walk out in the coming days. 

The prospect that retailers could see their critical Christmas sales period disrupted by the strike as well as the cost of living squeeze sent shares in JD Sports down 2.1 per cent, or 2.45p, to 115.65p, Mr Kipling owner Premier Food slipped 1.8 per cent, or 2p, to 107.4p and electronics retailer Currys dropped 4.3 per cent, or 2.45p, to 54.45p.

Gulf Keystone Petroleum slipped 2.3 per cent, or 4.6p, to 196.4p after a production update disappointed investors.

The Kurdistan-focused energy group predicted its production for 2022 would be ‘at the lower end’ of its guidance of 44,000 to 47,000 barrels of oil per day, which it blamed on the temporary shutdown of one of its wells following an electrical failure.

Dublin-based building materials business CRH gained 2 per cent, or 62p, to 3233.5p after expanding its share buyback programme.

The company has decided to return another £246million in cash to investors, bringing the total so far to £3.4billion.