Omicron fears recede (for now) and Fulham Shore swings back to profit

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“Monday brought a solid rise for the FTSE 100 despite the continued spread of the Omicron variant as investors reacted positively to suggestions from officials in the US and South Africa that the latest strain of Covid might carry milder symptoms,” says AJ Bell Investment Director Russ Mould.

“It doesn’t feel like we are out of the woods yet, particularly as, even if this definitely proves to be the case, increased transmissibility could mean a wave of hospitalisations from a lower proportion of people getting really sick.

“It still feels like we’re in the guesswork stage of working out what the impact of Omicron will be so it would be naïve to rule out further volatility as markets attempt to work out exactly what’s going on.

BP and Shell helped give the FTSE 100 some support as Saudi Arabia lifted its official oil prices as it looked to address the recent slide in crude.

“Also among the risers in London was FirstGroup amid speculation of progress in its hunt for a new CEO and ahead of a trading update on Thursday where the performance of its lower cost Lumo rail service between London and Edinburgh is likely to take the spotlight.

“Shipping broker Clarkson was in demand after it signalled results would beat expectations. Its services have been in demand as businesses desperately try and move goods around a log jammed global supply chain.”

Fulham Shore

“After a loss-making 2020 thanks to the pandemic, Fulham Shore’s latest half-year results show the business rediscovering its mojo. A return to profit has put the pizza-to-souvlaki seller back on track, which is helpful given how the company is hungry for growth.

“Chaired by former Pizza Express boss David Page, the company is making hay while the sun shines and planting new flags across the country. The restaurant sector suffered from over-expansion pre-pandemic, but enough capacity has now left the industry for the best players to now swoop on empty sites and try to gain market share.

“Franco Manca has proved to be a hit with the public as a cheap but decent quality pizzeria. Its other asset, The Real Greek, may have less than half the number of sites as its sister brand, but it is still providing a decent contribution to the group.

“This restaurant brand enables fans of the Greek Islands to relive the taste of past holidays or give a fix to those yearning to go abroad again. It’s also helped that a lot of The Real Greek restaurants have outdoor spaces which suited people nervous in a post-Covid world about being squashed into cramped indoor spaces.

“It’s interesting to see the company set up plans to open in Greece itself, albeit with the Franco Manco brand rather than The Real Greek. One could argue that Greece doesn’t need a UK imitation of its own food, given there are plenty of local restaurants across the islands.

“Admittedly there are also plenty of pizzerias, but Fulham Shore must be convinced its proposition is the real thing and exactly what locals and tourists want in Greece.

“Its business model for Franco Manco is simple. Keep menu prices lower than competitors so it attracts higher customer volumes, have good ingredients and don’t spend much money on advertising or restaurant design.

“This tight control on costs is one of the key ingredients for success in the restaurant industry.”

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