Hospitality stocks to watch amid soaring energy costs

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 Hospitality stocks to watch amid soaring energy costs
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Highlights

  • Independent brewers have thus requested the government to step up and protect the sector.
  • According to the Society of Independent Brewers, the sector faces the most challenging times, and small brewers are the major sufferers.
  • As per the recent survey results released by the trade publication the Morning Advertiser, over 35% of operators have said that they have witnessed their utility costs getting doubled.

Energy costs have been skyrocketing in the UK, and households and businesses have been suffering due to it. Independent brewers have thus requested the government to step up and protect the sector. This urge comes as recent studies have unveiled that over 70% of UK pubs do not believe that they will endure the upcoming rough winter months if no immediate step is taken to cut the energy costs.

On Tuesday, independent brewers wrote a letter to chancellor Nadhim Zahawi, in which they called for immediate government intervention while warning about the increasing uncertainty in the cottage industry, which used to thrive earlier.

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The effect of the soaring energy costs was intensified by a decline in sales as households have been trying to save their hard-earned money amid rising inflationary pressures. Additionally, equipment deficiencies like cans, kegs, and CO2 gas, along with a meagre hop harvest, have also compounded the problem, lifting the prices further up.

According to the Society of Independent Brewers, the sector faces the most challenging times, and small brewers are the major sufferers. Reportedly, small brewers are witnessing their energy bills getting doubled or trebled, increasing the risks to their future brewing capabilities. The warning was out as pub operators were informed of parallel upsurges in energy costs, with reports about a few suppliers rejecting to provide new contracts to the sector due to the concern that pubs may be unable to pay off their bills.

As per the recent survey results released by the trade publication the Morning Advertiser, over 35% of operators have said that they have witnessed their utility costs getting doubled. Meanwhile, 30% have seen a tripling of their utility costs. Brewers and pub operators are relying on the government to help in averting further damage with decreases in VAT and business rates, the upper limit on energy prices for small businesses, and endowments for renewable technology to help slash their energy usage.

The energy crisis is rapidly escalating at a time when the economy has already suffered enough due to the Covid-19 pandemic and is still in recovery mode. Pubs, restaurants, and the hospitality sector, which has been hit the worst during the pandemic, are struggling to survive the ongoing turmoil. With the rising energy costs, hospitality businesses are at a high risk of collapsing.

Amid the fears of rapidly escalating energy costs, UK investors can keep an eye on the following hospitality stocks suggested by Kalkine Media®.  

InterContinental Hotels Group plc (LON: IHG)

The shares of the UK-based global hospitality business, InterContinental Hotels Group plc, were down by 0.06%, trading at GBX 4,934.00, at 1:18 PM (GMT+1) on Wednesday. With a P/E ratio of 24.69, the FTSE 100 company’s dividend yield offering on an annual basis stands at 2.3% at present. Holding a market capitalization of £9,084.89m as of 24 August, the company has given positive returns to investors on both a one-year and YTD (year-to-date) basis, which stand at 9.99% and 3.16%, respectively. Its EPS (earnings per share) stands at 1.45.

Minoan Group plc (LON: MIN)

The Glasgow-based travel and leisure group shares, Minoan Group plc, were trading at GBX 1.05 at 1:26 PM (GMT+1) on Wednesday. The AIM-listed company holds a market capitalization of £7.22m as of 24 August. It has given positive returns of 12.68% to investors on a one-year basis, but its YTD return stands in the negative zone, at -13.94%. Its EPS is currently neither positive nor negative, at 0.00.

Trainline (LON: TRN)

The shares of the London-based digital rail and coach technology platform, Trainline, were down by 2.65%, trading at GBX 341.60, at 1:31 PM (GMT+1) on Wednesday. The FTSE 250 company holds a market capitalization of £1,686.71m as of 24 August. The company has given positive returns to investors on both a one-year and YTD basis, which stand at 2.43% and 22.26%, respectively. Its EPS stands at -0.19.

Comptoir group plc (LON: COM)

The shares of the UK-based owner and operator of restaurant chains, Comptoir Group plc, were trading at GBX 7.25 at 1:37 PM (GMT+1) on Wednesday. The AIM-listed company holds a market capitalization of £8.89m as of 24 August. It has given positive returns of 38.10% to investors on a YTD basis, but its one-year return stands in the negative zone, at -2.62%. Its EPS is currently negative, at -0.07.

PPHE Hotel Group Limited (LON: PPH)

The shares of the global hospitality real estate business, PPHE Hotel Group Limited, were trading at GBX 1,420.00 at 1:41 PM (GMT+1) on Wednesday. The company holds a market capitalization of £603.73m as of 24 August. Its one-year and YTD basis returns stand in the negative zone as of Wednesday, at -4.57% and -1.24%, respectively. Its EPS is also currently negative, at -1.92.

Tasty plc (LON: TAST)

The British branded restaurant operator, Tasty plc shares, traded at GBX 4.75 at 1:47 PM (GMT+1) on Wednesday. The AIM-listed company holds a market capitalization of £6.95m as of 24 August. It has given investors positive returns of 10.56% on a one-year basis, but its YTD return stands in the negative zone, at -4.72%. Its EPS is also currently negative, at -0.09.

DP Poland Plc (LON: DPP)

The shares of the British operator of pizza stores and restaurants, DP Poland Plc, were down by 3.09%, trading at GBX 7.85, at 1:57 PM (GMT+1) on Wednesday. The AIM-listed company holds a market capitalization of £50.26m as of 24 August. It has given positive returns of 21.85% to investors on a YTD basis, but its one-year return stands in the negative zone, at -7.53%. Its EPS is also currently negative, at -0.02.

Quixant plc (LON: QXT)

The shares of the international frontrunner in gaming technology, Quixant plc, were down by 2.33%, trading at GBX 146.50, at 2:03 PM (GMT+1) on Wednesday. The company holds a market capitalization of £99.68m as of 24 August. Its one-year and YTD basis returns stand in the negative zone as of Wednesday, at -16.82% and -17.66%, respectively. Its EPS is also currently negative, at -0.04.

Safestay plc (LON: SSTY)

The premium British hostel brand Safestay plc shares were trading at GBX 16.00 at 2:05 PM (GMT+1) on Wednesday. The AIM-listed company holds a market capitalization of £10.35m as of 24 August. Its one-year and YTD basis returns stand in the negative zone as of Wednesday, at -18.78% and -15.79%, respectively. Its EPS is also currently negative, at -0.12.

Hollywood Bowl Group plc (LON: BOWL)

The shares of the top global leisure operator, Hollywood Bowl Group plc, were down by 0.51%, trading at GBX 195.00, at 2:11 PM (GMT+1) on Wednesday. The company holds a market capitalization of £335.29m as of 24 August. Its one-year and YTD basis returns stand in the negative zone as of Wednesday, at -17.37% and -18.41%, respectively. Its EPS is also currently positive, at 0.01.

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