Restaurant Chain Fridays’ Owner Slips in London Trading Debut
Hostmore Plc, which owns Fridays and 63rd+1st restaurant brands in the U.K., slipped in its London trading debut, amid worries that rising inflation will erode diners’ disposable income.
Shares of the company, which was previously owned by Electra Private Equity Plc, fell as much as 4.5% to 143.30 pence. The stock opened at 150.02 pence after the demerger from its parent firm.
Hostmore has seen footfall pick up since the resumption of indoor dining in England on May 17, highlighting heightened demand for eating out after the end of coronavirus restrictions. Like-for-like sales grew 11% in the first 20 weeks of re-opening versus the comparable period in 2019.
The firm operates 87 restaurants in the U.K. and Jersey and has plans to expand its franchise business, according to its prospectus. Fridays is a U.S. diner-style restaurant that traces its roots back to the mid 1960s, while 63rd+1st is a cocktail bar and restaurant operating in Cobham and Glasgow.
Though Hostmore didn’t raise any money in connection with its listing, it adds to a growing lineup of new stocks that have debuted in London this year. Companies have raised more than 14 billion pounds ($19.2 billion) in U.K. initial public offerings in 2021, according to data compiled by Bloomberg. Deals in the works, including Rubix Group Holdings Ltd., put the City on track for the biggest year since 2014.
Eateries that have joined global stock markets this year have had varying degrees of success. Hot dog and hamburger restaurant chain Portillo’s Inc. has risen more than 90% since it started trading in New York last month, while doughnut chain Krispy Kreme Inc has slipped about 24% since its June debut.
A bulk of this listing activity has been spurred by private equity sponsors. Some of these, like Bridgepoint Group Plc have listed themselves, while others have offloaded highly valued assets onto the public market, taking advantage of a global IPO boom.
Electra also plans to list shoe retailer Hotter on London’s junior AIM market. Numis Securities Plc and HSBC Holdings Plc are joint financial advisers to Hostmore. Electra shares were trading up 4.5% at 117 pence at 12:22 p.m. in London, while Hostmore shares were trading down 1.3% at 148 pence.
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