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(Alliance News) - AIM-listed restaurant group Tasty on Tuesday provided an early reading for London investors of Omicron's impact on the UK hospitality sector, saying the virus variant "significantly reduced" the number of diners in the key month of December.
Tasty operates the dim t and Wildwood casual restaurant chains. December, usually its strongest month, suffered "disappointing" trading as infection rates rose and the UK government reinstated working from home advice.
There were "significantly reduced" numbers of those eating out as a result, while Christmas bookings also were hit.
"As a consequence, trading for the peak December trading period was considerably weaker than anticipated," Tasty said.
Up until December, trading had been "extremely encouraging", Tasty said.
"The company confirms that its restaurants have so far remained open with only isolated Covid-19 related disruptions to date and is currently trading from 50 restaurants out of a total estate of 54. The 4 restaurants that have remained closed due to predicted poor trading conditions in their locality and labour shortages, should re-open later in the year however the company will continue to consider the sale of 2 or 3 of those restaurants."
Tasty added: "2022 will not be without its challenges as the company prepares for the end of government support, in terms of reduced VAT and business rates. However, it is confident in its brands and optimistic about the trading potential of the group, especially with the strong revenue stream provided by takeaway and delivery services."
UK retailing bellwether Next provides its Christmas trading statement on Thursday, alongside Greggs and Made.com. JD Sports provides the same on Wednesday next week.
Tasty shares were down 1.1% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.0% at 7,460.03
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Hang Seng: up 0.1% at 23,289.84
Nikkei 225: closed up 1.8% at 29,301.79
S&P/ASX 200: closed up 2.0% at 7,589.80
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DJIA: closed up 246.76 points, or 0.7%, at 36,585.06
S&P 500: closed up 0.6% at 4,796.56
Nasdaq Composite: closed up 1.2% at 15,832.80
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EUR: down at USD1.1286 (USD1.1327)
GBP: down at USD1.3472 (USD1.3482)
USD: up at JPY115.73 (JPY115.10)
Gold: down at USD1,805.79 per ounce (USD1,819.10)
Oil (Brent): up at USD78.79 a barrel (USD78.32)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's key economic events still to come
0955 CET Germany labour market statistics
0930 GMT UK manufacturing PMI
1000 EST US ISM manufacturing PMI
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One of the UK's leading vaccine scientists and the driving force behind AstraZeneca says that the worst of the Covid-19 pandemic is behind us. Oxford University professor, chief investigator of the Oxford Covid- 19 vaccine trials and director of the Oxford Vaccine Group, Andrew Pollard, helped to develop the AstraZeneca jab in 2020. Speaking to The Telegraph a year on from the first time AstraZeneca was administered to a member of the public, Pollard expressed optimism going forward – even as the Omicron variant continues to ravage the UK. "The worst is absolutely behind us. We just need to get through the winter," he told the newspaper. As for UK Prime Minister Boris Johnson's current handling of the crisis, with his relatively light restrictions across England, Pollard said: "[It] seems to be working so far. The system isn't falling over. But it's finely balanced. We can't fully answer whether he's got it right for some time."
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UK shop price inflation ticked up during the key festive season, the latest British Retail Consortium-NielsenIQ monitor showed. Shop prices rose 0.8% year-on-year in December, accelerating from November's 0.3% growth. Following November's rise, this is the second time that prices have risen since May 2019, the monitor noted. The 12-month average including December was a 0.9% decline. Food inflation picked up to 2.4% in December from 1.1% in November, while non-food prices fell 0.2% after a 0.1% decline the month before.
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The Chinese manufacturing sector ended 2021 with its strongest month of growth since June, signalling that the impact of scattered Covid-19 flare-ups was under control. The Caixin China general manufacturing purchasing managers' index rose to 50.9 in December from 49.9 in November, beating market estimates of 50.0 according to FXStreet. The December figure was back above the 50.0 neutral mark. Helping to lift the PMI reading was a stronger increase in production at the end of 2021. Output rose at the quickest rate for 12 months and solidly overall, supported by improved market conditions and stronger customer demand. New work rose, albeit marginally. Data highlighted that subdued foreign demand weighed on overall sales, as export business was little-changed compared to November.
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Japan's manufacturing sector registered a slightly slower improvement in operating conditions in December, according to survey results from IHS Markit. At 54.3 points in December, the au Jibun Bank manufacturing PMI was down from 54.5 in November, indicating a weaker improvement in the health of the sector, but the latest PMI score remained well above the average seen in 2021 as a whole of 52.7. The lower reading of the headline index was partly the result of a slower rise in output levels. Production increased for the third consecutive month, though growth eased to a more moderate pace overall, IHS Markit said.
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BROKER RATING CHANGES
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CITIGROUP CUTS EASYJET PRICE TARGET TO 425 (450) PENCE - 'SELL'
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JPMORGAN RAISES OXFORD NANOPORE PRICE TARGET TO 790 (725) PENCE - 'OVERWEIGHT'
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JPMORGAN RAISES DECHRA PHARMA PRICE TARGET TO 5,700 (5,400) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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Rolls-Royce said it completed the sale of Bergen Engines to Langley Holdings. "Sale proceeds of EUR91 million from the transaction, together with EUR16 million of cash held within Bergen Engines which has been retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet in support of our medium-term ambition to return to an investment grade credit profile," the company explained. The sale, at an enterprise value of EUR63 million, was agreed in August. It followed a strategic review of the unit. The deal followed an aborted disposal plan from earlier in 2021. The Norwegian government blocked a EUR150 million proposed sale of the Bergen unit to TMH Group, a privately owned company headquartered in Russia that makes locomotives and rail equipment. The Norwegian government blocked the sale on national security concerns, as Norway's army is among Bergen's customers.
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COMPANIES - FTSE 250
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Wizz Air said it carried 2.6 million passengers in December, a near four-fold rise from 665,722 a year earlier. The load factor improved to 75.4% from 56.1%. Wizz raised its capacity to 3.5 million seats in December from 1.2 million a year prior. This meant that for the whole of 2021, capacity was increased by 30% to 28.9 million, in step with passengers numbers, which grew at the same rate to 21.7 million.
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Tuesday's shareholder meetings
none scheduled
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By Tom Waite; thomaslwaite@alliancenews.com
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