Shares in Wetherspoons rallied higher after the budget pub chain bolstered its annual earnings estimates thanks to Britons’ unquenchable thirst for cheap pints.
It raised a glass to an 11.5 percent sales increase in the fourth quarter as adolescents are still eager to socialize despite the cost of living.
Chairman Tim Martin said earnings for the current year to July 30 would be ‘in line with market expectations’, estimated at £38.7 million. He predicts an ‘improved result’ for the next financial year as a result of the easing of energy prices.
Wetherspoons has sold 28 locations in the past year and has 22 more up for sale or for sale, though Martin added it was not a “fundraiser.”
Derren Nathan, head of equity research at Hargreaves Lansdown, said: ‘If Tim Martin’s chain can sustain its modest price increases as inflation starts to ease, that’s something of a good place.
Cheers: Pub group Wetherspoons saw sales rise 11.5% in the fourth quarter as pub goers showed they still like to socialize despite the cost of living
“Wetherspoons is still the best value in town and appeals to a wider range of consumers than before.”
Shares were up 10.3 percent, or 68.5 pence, to 731 pence, contributing to a 63 percent rally for the year to date.
Another hospitality group benefiting from uncovered consumer demand was Loungers, which posted record annual sales.
The Cozy Club owner posted a stellar turnover of £283.5m, up 19 per cent on the previous year, citing a boom for its seaside resort locations, for the year ending April 16.
Nick Collins, the CEO, said: ‘Based on our experience, UK consumers remain positive, inflationary pressures are easing and recruitment issues have eased.’
But profits fell from £7.3m to £7.3m from £21.6m amid painful increases in the cost of doing business, a reminder that the pub industry has a long way to go. The shares added 5.7 percent or 10.5 pence to 195 pence.
The FTSE 100 rose after the Bank of England gave the country’s largest banks a clean bill of health.
In the bank’s biennial stress test, lenders were deemed able to withstand a recent rise in interest rates and an economic downturn, with the Old Lady declaring banks “resilient.”
The blue-chip index added 1.8 per cent, or 133.59 points, to trade at 7416.13 – with the biggest risers being Lloyds Bank, up 2.7 per cent, or 1.16p, to 44, 53p, and NatWest, up 3.6 percent, or 8.4p, to 243.6p and Barclays, up 3.3 percent, or 4.94p, to 154.8p.
The FTSE 250 rose 2.4 percent, or 439.45 points, to 18,579.54.
Elsewhere, recruiting firm Page Group saw shares rise 3.1 percent, or 13.2 pence, to 436.4 pence, despite dented profits and claims workers were hesitant to change jobs amid economic uncertainty.
Chief executive Nicholas Kirk said it had seen “lower levels of both candidate and client confidence, resulting in delays in decision-making and candidates more reluctant to accept offers.”
It was good news for AIM-listed Deltic Energy, which said a discovery in the North Sea means it will be able to extract more oil than previously thought.
The exploration company skyrocketed 30.4 percent, or 7 pence, to 30 pence after it said the Pensacola discovery was nearly twice its original estimates.
Business supplies distributor Bunzl fell 2 percent, or 58 pence, to 2,816 pence after the Royal Bank of Canada downgraded the company to “below” its “industry performance,” citing “the sharp declines in commodity prices” as the cause for reducing sales growth forecasts.
And British Airways owner International Consolidated Airlines Group fell 2.3 percent, or 3.65 pence, to 156.6 pence after Deutsche Bank downgraded it from ‘buy’ to ‘hold’
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