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Summary
- Prime Minister Boris Johnson has announced a raft of new and stricter actions to contain the spread of Coronavirus
- All pubs, bars, and restaurants are restricted to table service only from Thursday, 24 September 2020
- The pubs and bars stocks are mostly in green as the government has presently ruled out the nationwide lockdown speculation
The woes of UK’s hospitality industry don’t seem going to get over soon. When all seemed returning to normal, the rapid rise in new Coronavirus cases has forced the government to tighten the measures to contain the spread. Prime Minister Boris Johnson has announced a raft of new and stricter actions including all pubs, bars and restaurants to table service only, from Thursday, 24 September 2020, apart from making the rule of masks and the “rule of six” stricter.
Though it was brewing since the last couple of days, with average number of Covid-19 infections surging past 4000 level, it finally culminated with government’s chief medical officer, Chris Whitty, and its chief scientific advisor Patrick Vallance, coming up with a warning based on charts and data that showed that the UK is in the grip of a second wave of the pandemic. They stated that if the current trend in rising cases continued, doubling every seven days, and if no strict measures are taken, there are chances that the country could see 50,000 new cases every by mid of the next month.
The hospitality industry is undoubtedly going to suffer a severe blow with the decision; now they will have to shut by 10 PM. Some official data has indicated that outbreaks linked to food outlets and restaurant settings has trebled recently. Most importantly, Police have been given powers to impose fines and even make arrests to coerce social distancing in pubs and restaurants. As per the government orders, there could be a fine of £1,000 if tables are not 2 metres apart, or 1 metre if other measures such as protective screens are in place. The new regulations mean the onus of obeying the rules is more on the hospitality venue owners rather than just customers, to abide.
Pubs and bars are going to be hit more as the time their business is on a peak, they will have to close the doors for customers. However, there was a big respite for them as well, as the government scientific advisers had suggested two-week nationwide lockdown to halt the exponential rise in the spread, which could have severely impacted the ailing industry.
Also Read- Pubs and Bars Call for Government Support Amid the New Social Distancing Norms
Let us have a lens over some of the listed pubs and bar stocks and see how they have been reacting to the latest announcement of the government.
JD Wetherspoon Plc
JD Wetherspoon Plc (LON: JDW) a pub chain operating across the UK and Ireland, had recently reported 66 positive Corona cases from 50 of its 811 pubs in the 10 weeks since 4 July 2020. The company has a total of around 41,564 employees on its roll.
On 22 September 2020, the stock of the company was trading at GBX 782.50 (16:10 PM GMT+1), up by 8.50 points or 1.10 per cent from its previous closing. It has given a negative return on 49.77 per cent for the year and 53.87 per cent on a YTD basis.
Mitchells & Butlers Plc
Mitchells & Butlers Plc (LON: MAB), one of the largest operators of pubs and bars and restaurants in the United Kingdom, negotiated a deal from its creditors for waiving debt. It was under a deal that the company would not return money to shareholders or repay bond debt until at least September 2021.
On 22 September 2020, the stock of the company was trading at GBX 127.20 (16:15 PM GMT+1), up by 8.20 points or 6.89 per cent from its previous closing. It has given a negative return on 68.35 per cent for the year and 73.93 per cent on a YTD basis.
Marston's Plc
Marston's Plc (LON:MARS) is into brewing, pub and hotel operation business. It had recently formed a Joint Venture with Carlsberg UK Holdings Ltd to a new UK brewer and distribution company, Carlsberg Marston's Brewing Company and hopes the completion of a brewing joint venture in the fourth quarter, a bit delayed due to the pandemic.
On 22 September 2020, the stock of the company was trading at GBX 41.42(16:18 PM GMT+1), up by 2.30 points or 5.88 per cent from its previous closing. It has given a negative return on 69.58 per cent for the year and 69.81 per cent on a YTD basis.
Fuller, Smith & Turner Plc
Fuller, Smith & Turner Plc (LON:FSTA) a family brewing business till January last year is into the business of pubs and hotels. The company had recently reported that since reopening on 4 July 2020, the company’s sales have improved and were at about 80 per cent on last year's level. The company got a boost with the government’s most popular support scheme “Eat out to help out”.
On 22 September 2020, the stock of the company was trading at GBX 560.00 (16:20 PM GMT+1), down by 6.00 points or 1.06 per cent from its previous closing. It has given a negative return of 52.83 per cent for the year and 41.04 per cent on a YTD basis.
Also Read: Introduction of “Rule of Six”: Will It Further Put Pressure on Ailing Hospitality Sector?
