Wagamama and Frankie & Benny’s owner The Restaurant Group was the biggest faller on the FTSE 250 as it fell victim to the staff shortages and rising costs sweeping the UK.
Chief executive Andy Hornby flagged up several ‘challenges’ including the end of the temporary cut to VAT for hospitality firms as well as ‘labour availability and increased cost pressures’.
Trading in the 15 weeks to the end of August had been ‘very strong’ as indoor dining resumed.
Stewed: Wagamama sales were 21 per cent up on pre-pandemic levels, but owner The Restaurant Group’s shares fell 10 per cent as it struggles with staff shortages and rising costs
Wagamama sales were 21 per cent up on pre-pandemic levels, while sales in pubs and leisure areas were up 12 per cent and 18 per cent respectively.
Meanwhile, losses in the six months to July 4 had narrowed sharply to £58.8million from £234.7million in the same period in 2020.
Earnings expectations for the full year were hiked on the back of its performance since reopening.But the shares were down 10.6 per cent, or 12.8p, to 108.4p.
A handful of other companies warned their prospects are under threat from similar issues, plus supply chain woes. Model train maker Hornby, which dropped 7.9 per cent, or 3.5p, to 41p, highlighted ‘potential supply disruption’ at ports ahead of Christmas.
Stock Watch – Petrotal
AIM-listed Petrotal flowed higher after noting record production from its flagship Bretana oil field in Peru.
The company said that current production at Bretana was now running at around 15,400 barrels of oil per day after completing its fourth horizontal well at the site earlier this month.
Petrotal said the production rates from the 8H well are running at between 7,500 and 8,000 barrels a day, which chief executive Manuel Pablo Zuniga-Pflucker was ‘very exciting’ and reflected the company’s ‘prolific’ 5H well at the site. The shares jumped 8.1 per cent, or 1.5p, to 20p.
Keywords Studios, a provider of support services to computer game developers, sank 4.8 per cent, or 154p, to 3046p after warning that it expects growth to slow amid a tight labour market.
Toy and games firm Character Group fell 15.2 per cent, or 105p, to 587.5p as it said port delays, shortages of shipping containers and ‘exponential’ rises in freight costs dented profitability.
Profit for the year to August 31 are expected to be up to 10 per cent lower than the prior year figure of £12million.
Meanwhile, tonic maker Fever-tree said it had been ‘increasingly impacted’ by disruption in supply chain networks, particularly global shipping and a lack of lorry drivers. But it rose 9.9 per cent, or 212p, to 2350p after a 28 per cent profit rise in the six months to June 30.
Rising costs and a lack of staff have hit multiple sectors, with builders Barratt and Berkeley and retailers Dunelm and Halfords previously sounding the alarm.
The FTSE 100 dipped 0.3 per cent, or 17.57 points, to 7016.49, while the FTSE 250 dropped 1.1 per cent, or 254.45 points, to 23,432.81.
Food delivery firm Just Eat Takeaway was the biggest blue-chip faller, down 4.5 per cent, or 300p, to 6307p.
That followed news of a partnership between rival Deliveroo and online giant Amazon, giving Amazon’s Prime customers free delivery on certain orders. Deliveroo fell 1.1 per cent, or 3.7p, to 328p.
The UK oil majors rose as the price of Brent crude hit its highest since late July. BP was up 3.1 per cent, or 9.25p, to 309.25p while Shell was lifted 1.7 per cent, or 25p, to 1475.2p.
Mid-cap Tullow gushed 5.4 per cent, or 2.43p, to 47.43p as it swung to a £67million profit in the six months to June 30 from a £960million loss in the same period a year ago.
Housebuilder Redrow ticked up 0.1 per cent, or 1p to 701p after a 124 per cent rise in profit to £314million in the year to June 27.
However, chairman John Tutte said the UK’s buoyant housing market had ‘moderated’ and it expects sales to return to ‘historically average’ levels over the coming year.
Fuel cell maker Ceres Power jolted higher as two projects aimed at creating zero-emission vessels in British shipyards have secured funding from the Government. It rose 1.4 per cent, or 17p, at 1161p.
Consumer review site Trustpilot got a bad rating, falling 6.6 per cent, or 27.4p, to 387p after losses ballooned in its first half – to £12.4million, nearly three times the £4.2million loss reported in the same period last year.
Primark owner Associated British Foods dropped 3.2 per cent, or 61p, to 1852.5p after saying that its new sustainability strategy was expected to cause a ‘modest increase in costs’.
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