“It may be a quiet day for corporate news but the FTSE 100 started Friday with a bang, gaining more than 1% early on and moving within sight of the 7,600 mark,” says AJ Bell Investment Director Russ Mould.
“In doing so it has clawed back a good portion of the losses seen in recent days on the spread of the deadly coronavirus in and increasingly beyond China. The World Health Organisation’s decision not to designate the outbreak an international emergency has clearly had a restorative effect on the markets.
“Nearly every constituent of the FTSE 100 index was in positive territory this morning, the major exception being takeaway firm Just Eat which faces a competition authorities probe into its takeover by Takeaway.com that could potentially nix the deal."
“Running a pub company is incredibly hard. You might presume that the Brits’ love of a pie and pint would keep the tills ringing for all eternity at the nation’s public houses. Sadly landlords are effectively running just to stand still.
“Marston’s has a track record of growing sales by a small amount each year, but sadly it also has to juggle ever-increasing costs such as wages, energy and food. To make matters worse, it has a large debt pile that needs to be reduced. It is selling off pubs to pay down borrowings while also making sure shareholders remain interested by continuing to pay them a decent dividend.
“Christmas trading wasn’t bad for the business apart from the odd weak spots such as disappointing sales of its lagers in shops and supermarkets. It also seems like we’re going to the pub more these days to have a drink rather than a meal, judging by Marston’s comments.
“What the business really needs is a stronger economy, increased consumer confidence and a run of good weather. That’s effectively the wish list of all pub companies on a yearly basis – unfortunately it is rare to have all three factors become reality.”
These articles are for information purposes only and are not a personal recommendation or advice.
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