Join our community of smart investors

Today's markets: Restaurant recovery, West End 'revival' and more

Follow our Markets Live blog for the latest news that affects your portfolio
May 25, 2021

Welcome to the IC’s live blog, where we round up the biggest business stories of the day and overnight news from the US.

The UK’s sector net borrowing stood at £31.7bn last month, according to a new estimate published by the Office for National Statistics (ONS) on Tuesday. That marks the second highest April borrowing since monthly records began almost two decades ago.

But the figure was £15.6m lower than the same month in 2020, when the nation was in the midst of its first full lockdown. As things stand, restrictions are continuing to ease under Boris Johnson’s ‘exit’ roadmap – bringing a welcome reprieve to the sectors hardest hit by the coronavirus pandemic, with flattened revenues and squeezed cash flows.

The Restaurant Group (RTN) is one such company to have benefitted from that easing process. In the five weeks to 16 May (prior to indoor dining resuming on 17 May) it enjoyed a “very encouraging recovery in sales”, management said on Tuesday morning.

In an AGM statement, the FTSE 250 group said that its Wagamama sites had been trading at roughly 85 per cent of their comparable 2019 sales levels, representing a 15 per cent outperformance of the market.

The group’s pub portfolio had also traded at 85 per cent of comparable sales levels, helped by its significant outdoor space and investment in marquees.

The path out of lockdown has also facilitated a turnaround at convenience food group Greencore (GNC), which cited “encouraging revenue momentum” in the first seven weeks of its second half. The group expects a “consequential rebuild” of its sales, in line with the reopening of the UK. Revenues for the year ending 26 March declined almost a fifth to £577m.

Elsewhere on the FTSE 250 this morning, management at Shaftesbury (SHB) – which owns a 16-acre portfolio in London’s West End – said that “a revival in the West End's broad-based economy is now underway.” Just as restaurants have thrown open their doors again, so too is Shaftesbury seeing an “encouraging increase in demand for space and lettings and a return of footfall and spending across our locations”.

As ever, however, “there remains the risk that the recovery could encounter delays and setbacks”. The course of Covid-19 never did run smooth.

Read our full analysis in the live blog below: