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Highlights
- UK Hospitality forecasts that pubs and restaurants’ December takings will fall by around 40 per cent.
- The fall in takings comes amidst cancellations after stricter Plan B restrictions were introduced.
Pubs and restaurants are expected to see their December takings fall by around 40 per cent, according to industry body UK Hospitality. The forecasted drop in December is a sharp change from a month that is typically seen as a robust trading month for the sector.
The drop comes amidst Christmas cancellations following the introduction of stricter covid-19 related restrictions, called as Plan B, in a bid to curtail the Omicron variant’s spread.
Trade fell by 13 per cent between Monday to Sunday last week, whereas booking cancellations rose by 15 per cent when compared to pre-pandemic levels, according to UK Hospitality data.
Moreover, the central London area saw takings drop by about 40 per cent, and Christmas booking cancellations increase by 25 per cent, according to the data.
In view of this, let us take a look at 2 FTSE listed pub and restaurant stocks and see how they reacted to the development:
- Restaurant Group PLC (LON: RTN)
Restaurant Group is a UK based restaurant chain and a constituent of the FTSE 250 index.
In its latest trading update, the group increased its forecast for the FY 2021 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to £73 and £79 million, subject to no covid related disruptions.
The group is scheduled to report it is preliminary results in March next year.
Image source: Refinitiv
Restaurant Group’s shares were up by 1.13 per cent, trading at GBX 80.60 on 14 December 09:26 AM BST. Meanwhile, the FTSE 250 index was at 22,788.20, higher by 0.62 per cent.
The group’s market cap was at £609.74 million, and it has a one-year return of 31.89 per cent as of Tuesday.
Related Read: 2 climate-conscious pub and restaurant stocks for growth in 2022
- Loungers PLC (LON: LGRS)
Loungers is a UK based café bars and café restaurant operator.
The group’s revenue, for the 24 weeks ended on 3 October, rose to £102.361 million, compared to £53.493 million in the year ago. Comparatively, its revenue stood at £79.827 million, for the similar period in 2019.
During the period, the group’s adjusted EBITDA rose to £27.086 million, up from £13.205 million. And, its adjusted EBITDA for the comparable period in 2019 stood at £14.475 million.
Image source: Refinitiv
Loungers’ shares were trading flat at GBX 292.50 on 14 December 09:42 AM BST. Meanwhile, the FTSE AIM All-Share index was at 1,176.59, lower by 0.08 per cent.
The group’s market cap was at £300.51 million, and it has a one-year return of 32.11 per cent as of Tuesday.
