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- Hospitality and leisure stocks were on the rise after the Easter weekend.
- As of now, no Covid passports are required to visit restaurants, pubs and bars.
- Pub owners have invested huge amount of money to create outdoor seating spaces.
A year-long nightmare for the leisure and hospitality sector in the wake of pandemic is about to end next week as pubs and restaurants are expected to reopen next week. Restaurants and bars with outdoor seating space are preparing for a robust reopening from Monday as per the Boris Johnson government’s schedule.
The pub and restaurant owners are witnessing unprecedented surge in table bookings. Pub owners have invested huge amount of money to create outdoor seating spaces. The UK government has reassured that the leisure industry that it has dropped the plans of use of ‘Covid passports’ in April and May. However, customers might be asked to install the NHS app on their mobile phones and will be permitted only if they have tested negative or is inoculated.
Following the PM Johnson’s speech on reopening of non-essential retail earlier this week, hospitality and leisure stocks are on the rise after the Easter weekend. In this article, we shall discuss some LSE-listed pub and restaurant businesses that are expected to do well in the light of reopening of non-essential retail.
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JD Wetherspoon (LON: JDW)
Amid the ailing pub trade, the UK-based pub chain has announced a new investment of £145 million in new venues and refurbishments that could lead to creation of 2,000 jobs in the first phase. The company has planned an investment of circa £900 million that shall lead to creation of over 20,000 jobs while opening new pubs and upgrading the existing ones. During the first half of 2021, the revenue of the pub chain was down by nearly 54 per cent to £431.1 million. Shares of Wetherspoon have delivered around 25 per cent return since 1 January 2021 so far. Wetherspoon’s market capitalisation stood at £1,794.78 million as of 8 April 2021 closing.
Marston's Plc (LON: MARS)
UK-based pub operator Marston’s gears up to reopen 700 of its managed and franchised pubs in England with outdoor spaces next week. Despite the unprecedented challenges presented by the Covid-19 pandemic, the pub operator managed to strengthen its balance sheet following the successful joint venture with Carlsberg. The company is also managing over 150 Brains pubs in Wales, which it took over last year. Shares of Marston’s have delivered more than 32 per cent return since 1 January 2021 so far. Marston’s market capitalization stood at £634.05 million as of 8 April 2021 closing.
Mitchells & Butlers Plc (LON: MAB)
UK-based pub and bar operator Mitchells & Butlers successfully raised £350 million through open offer in March. As of 16 January, the company had a cash balance of £113 million. The FTSE 250-listed company reported a decline of 67 per cent year on year in its total sales during the first quarter of 2021. Shares of Mitchells & Butlers have delivered more than 48 per cent return since 1 January 2021 so far. Mitchells & Butlers’ market capitalization stood at £1,919.82 million as of 8 April 2021 closing.
Fuller, Smith & Turner Plc (LON: FSTA)
The premium pubs and hotels business started 2020 in a superb position pre-Covid with a robust balance sheet, substantial amount of liquidity until the pandemic took over. Despite the challenges posed by the pandemic, the company made excellent use of the lockdown restrictions by continuing to transform and invest in its hotels as well as premium pubs portfolio. The company aims to do well upon reopening as it did last summer when the group was permitted to reopen.
By the end of August 2020, the 79 per cent of its pubs were open and were trading at 78 per cent of prior year levels. After prolonged period of lockdown, the group is finally set to reopen strongly and in the best feasible way to achieve growth and revival. Shares of Fuller, Smith & Turner have delivered over 28.00 per cent return since 1 January 2021 so far. Fuller, Smith & Turner’s market capitalization stood at £291.12 million as of 8 April 2021 closing.