MARKET REPORT: Wetherspoons fizzes up after thirst for cheap pints

Shares in Wetherspoons fizzed higher after the budget pub chain backed its annual profit estimates thanks to Brits’ unquenched thirst for cheap pints.

It raised a glass to a sales boost of 11.5 per cent in the fourth quarter as pub-goers are still keen to socialise despite the cost of living.

Chairman Tim Martin said profits for the current year to July 30 would be ‘in line with market expectations’, estimated at £38.7million. He forecast an ‘improved outcome’ for the next financial year due to easing energy prices.

Wetherspoons sold 28 sites in the past year and has 22 still up for sale or under offer, although Martin added it was not a ‘money-raising’ pursuit.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: ‘If Tim Martin’s chain can hold on to its modest price increases, as inflation starts to ease, that’s something of a sweet spot. 

Cheers: Pub group Wetherspoons saw sales  rise 11.5% in the fourth quarter as pub-goers showed they are still keen to socialise despite the cost of living

‘Wetherspoons is still the best value in town, and is appealing to a wider group of consumers than it used to.’

Shares were up 10.3 per cent, or 68.5p, to 731p, adding to a rally of 63 per cent for the year so far.

Another hospitality group to reap the rewards of undented demand from consumers was Loungers, which posted record annual sales.

The Cosy Club owner posted roaring sales of £283.5million, up 19 per cent compared to the previous year, citing a boom for its venues in seaside towns, for the year ended April 16.

Nick Collins, the chief executive, said: ‘Based on our experience the UK consumer remains positive, inflationary pressures are diminishing, and recruitment challenges have eased.’

But profits fell to £7.3million from £21.6million as a result of painful increases to the cost of doing business, a reminder that the pub industry still has a long way to go. The shares added 5.7 per cent, or 10.5p, to 195p.

Stock Watch – Shoezone

Shoezone continued to rally after the footwear retailer said that its June trading ‘significantly exceeded’ its bosses’ expectations.

The Leicester company hiked profit expectations for the year ending October 2 to £13.5million, an improvement on last month’s £10.5million.

It said that it had benefited from lower shipping costs and favourable foreign exchange rates.

Shares were up 7.5 per cent, or 17.5p, to 252.5p and have risen 48.5 per cent over the past year.

The FTSE 100 was climbing after the Bank of England gave the country’s biggest banks a clean bill of health.

In the Bank’s bi-annual stress test, the lenders were deemed able to withstand a recent increase in interest rates and an economic downturn, with the Old Lady declaring banks ‘resilient’.

The blue-chip index added 1.8 per cent, or 133.59 points, to trade at 7416.13 – with the biggest risers being Lloyds Bank, up 2.7 per cent, or 1.16p, to 44.53p, NatWest, up 3.6 per cent, or 8.4p, to 243.6p and Barclays, up 3.3 per cent, or 4.94p, to 154.8p.

The FTSE 250 rose 2.4 per cent, or 439.45 points, to 18,579.54.

Elsewhere recruitment firm Page Group saw shares buoyed 3.1 per cent, or 13.2p, to 436.4p despite dented profits and claiming workers were hesitant to switch jobs during economic uncertainty.

Chief executive Nicholas Kirk said it had seen ‘lower levels of both candidate and client confidence, resulting in delays in decision-making and candidates being more reluctant to accept offers’.

It was good news for AIM-listed Deltic Energy, which said a discovery in the North Sea means it will be able to extract more oil than previously thought. 

The exploration firm shot up 30.4 per cent, or 7p, to 30p after it said its Pensacola discovery was nearly twice the original estimates of size.

Business supplies distributor Bunzl fell 2 per cent, or 58p, to 2816p after the Royal Bank of Canada downgraded the firm to ‘underperform’ from ‘sector perform’, pointing to ‘the sharp declines in raw material pricing’ as cause for cutting revenue growth forecasts.

And British Airways owner International Consolidated Airlines Group fell 2.3 per cent, or 3.65p, to 156.6p after Deutsche Bank downgraded it to ‘hold’ from ‘buy’

This post first appeared on Dailymail.co.uk