Summary
- The PMI survey by IHS Markit and CIPS found that staff shortage and capacity shortage grappled UK’s service sector in June.
- The Business Activity Index for June was 62.4, slightly down from May’s 62.9.
- Bank of England’s outgoing chief economist Andy Haldane cautioned last week that prices could rise 4 per cent this year.
The PMI survey by IHS Markit and CIPS found that staff and capacity shortage grappled UK’s service sector in June, as business activities were halted, stalling the reopening boom that the UK was seeing.
The Business Activity Index for June was 62.4, slightly down from May’s 62.9. Anything above 50 signals growth, and a reading below 50 means contraction.
Despite backlogs, UK’s service sector recorded another sharp rise in June’s business activity. The service sector includes everything from hospitality businesses to financial businesses and constitutes 80 per cent of the UK’s economy.
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The latest findings would give rise to concerns regarding inflation. Bank of England’s outgoing chief economist Andy Haldane cautioned last week that prices could rise 4 per cent this year, affecting everyone.
IHS Markit’s economics director Tim Moore termed the imbalance in supply and demand as the reason behind the latest price increase. The pandemic discounting by several companies added to the price rise.
Here are 3 FTSE 250 hospitality stocks and how they reacted to the survey:
Mitchells & Butlers (LON: MAB)
The shares of the company were up 2.76 per cent and were trading at GBX 298.20 with a market capitalisation of £1,730.19 million on 5 July at 12:41 GMT+1
For the half year ended 10 April, the company’s revenue fell to £219 million from £1,039 million in the same period a year ago. The company reported an operating loss of £132 million, up from a loss of £51 million in the same period a year ago.
Wetherspoon Plc (LON: JDW)
The shares of the company were up 3.32 per cent and were trading at GBX 1,275 with a market capitalisation of £1,588.78 million on 5 July at 12:41 GMT+1.
For the 26 weeks ended 24 January, the company reported a loss before tax of £46.2 million compared to a profit of £57.9 million in the same period a year ago. Its revenue fell 53.8 per cent to £431.1 million compared to £933 million in the same period a year ago.
Restaurant Group Plc (LON: RTN)
The shares of the company were up 2.25 per cent and were trading at GBX 136.60 with a market capitalisation of £1,022.09 million.
The company’s revenue for the full year of 2020 fell to £459.8 from £1,073.1 million a year ago. Adjusted EBITDA fell to £8.7 million from £136.7 million a year ago. Statutory loss after tax increased to £119.9 million from £40.4 million a year ago.
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