Market report: Hospitality shares suffer from jitters around new local lockdowns

Pub owners are waiting to hear if there will be new restrictions in local lockdowns

Joanna Hodgson12 October 2020

Investors in the hospitality sector looked in need of a stiff drink on Monday, as they faced the bleak prospect of even more lockdown restrictions coming in.

Boris Johnson is today set to unveil a new local lockdown system for England to curb rising coronavirus rates. The three-tier system is expected to see areas labelled as medium, high, or very high risk. Many details are yet to be confirmed but there are fears pubs and gyms could face further restrictions within the “very high” category.

A number of consumer-focused businesses were out of favour today as investors waited for the Prime Minister’s update.

Among the pub companies to see share price falls was Marston’s, which lost 2.58p, or more than 5%, to 47.52p. Shares in Fuller’s fell 22p, 3.7%, to 572p, Mitchells & Butlers was 2p lower at 145.4p, and Premier Inn owner Whitbread, which runs a number of pubs and restaurants, decreased 42.6p to 2360.4p. Shares in The Gym Group decreased 3.2p to 151.8p.

It wasn’t just lockdown news that the City has on the radar this week. Also in focus are the UK-EU talks, with Boris Johnson’s October 15 deadline looming.

The FTSE 100 was down 7.75 points to 6008.90, with a dip in oil prices hitting energy stocks, including BP, off 3p at 219.05p. The FTSE 250 was up 101.53 points to 18175.95.

Meanwhile, LondonMetric was among a number of landlords to update on rent collections.

Shares in the warehousing firm rose in early trading, before edging down slightly, 0.28p to 225.72p. The company, which has benefited from retailer demand for space to cope with high online orders during the pandemic, said that of the rents due for the September rent quarter day, 94% has already been collected.

Shares in London landlord Great Portland Estates slipped 4.2p to 639p. It said 73% of September rent has been collected so far.

GPE’s chief executive Toby Courtauld said that while rental collection and occupancy rates have improved since March, “many sectors remain challenged”.

Over on the junior market, shares in healthcare technology company Induction Healthcare jumped 14%, or 10.5p, to 85p after it said it is working with US firm Cerner.

The companies are developing a new product that will make it quicker and easier for patients to book hospital appointments.