Wagamama Owner’s Shares Jump as U.K. Reopening Boosts Eating Out
(Bloomberg) -- Easing pandemic restrictions are driving Britons back into noodle bars and pubs, helping to boost sales for one of the U.K.’s biggest hospitality companies.
Shares in Restaurant Group Plc, which runs the Wagamama chain, surged the most in a year after it said more people are dining at its eateries and that its outlets in train stations and airports are busier.
“With no U.K. Government Plan B emerging and seemingly a vaccination-led strategy, we remain positive into the medium term,” Jefferies analyst James Wheatcroft wrote in a note after Restaurant Group published an update Tuesday. The company is “recapitalized, repositioned towards higher growth and well-placed to gain market share.”
U.K. Chancellor of the Exchequer Rishi Sunak slashed taxes for pubs and restaurants in last month’s budget as the country aims to rebuild its economy after lockdown measures hit the hospitality sector. A recovery has a long way to go, with Prime Minister Boris Johnson warning that people must get their Covid-19 vaccinations and booster doses to avoid fresh restrictions.
Like-for-like sales at its restaurants and pubs have outperformed since Sept. 15, while an increase in airport passenger traffic has spurred a partial recovery at its concessions, Restaurant Group said in a statement Tuesday.
The shares were 20% higher at 94.8 pence as of 10:09 a.m. in London, the sharpest gain since Nov. 9 last year. That’s still about 30% lower than their pre-pandemic level.
©2021 Bloomberg L.P.