Market report

London slumps | Restaurant Group ahead | Photo-Me CEO bid

Closing London report: Shares take a battering

Only 11 stocks on London’s blue-chip index managed to end the day in positive territory and most of those were only just clinging on by their fingernails.

The FTSE 100 ended down 90.88 points, 1.2%, at 7,494.13 – ending the week 0.7% lower.

“Today has been something of a rout, with inflation woes, disappointing trading updates, geopolitical unrest and a falling oil price all delivering their own unique brand of pain,” said Danni Hewson, financial analyst at AJ Bell.

“And it’s not been simply a matter of out with the old and in with the new, though those companies like Netflix dubbed “stay at home stocks” have suffered as we all try and figure out what the next twelve months really has in store.”

Cigarette manufacturers British American Tobacco and Imperial Brands ended among a handful of stocks in the green, up 0.5% and 0.1% respectively,

Both Unilever and the previous target of its affections, GlaxoSmithKline, also made small gains but not enough to recover from the week’s thorny embrace.

Brent oil was quoted at $87.74 a barrel at the equities close, down sharply from $88.67 at the close.

Restaurant Group

The Restaurant Group, whose brands include Wagamama and Frankie & Benny’s, said that due to good cost control and continued strong trading relative to the market, management now expects  FY21 Adjusted EBITDA will be at the top end of the range and FY21 year-end Net Debt will be less than £180m.

“Whilst we are encouraged with the recent [UK] Government announcement that all “Plan B” restrictions will be lifted next week, we expect consumer confidence may take longer to recover. 

“We are also mindful that the recovery in air passenger volumes remains dependent on the timing of changes to both UK and International restrictions.

“Despite the near-term uncertainties, the board remains confident in the group’s prospects given the strength of our brands, substantially reduced net debt and outperformance versus the market.”

Shares closed up1.2p ( 1.2%).

Photo-Me CEO launches bid

Photo-Me International chief executive Serge Crasnianski is launching a £283.5 million takeover of the photo booths, printing and laundry-equipment company after buying shares that raised his shareholding to 36.5% of the issued share capital.

Tibergest PTE., a company owned by Mr Crasnianski, added to its earlier holding, taking its above the threshold required to make a mandatory offer to the rest of the company’s shareholders.

Tibergest is offering shareholders 75p for each share held, a 0.8% discount to the company’s closing price of 75.6p on Thursday.

It will apply for a cancellation of the company’s listing on the London Stock Exchange if the offer becomes unconditional.

Photo-Me said shareholders should take no action until an independent committee has had time to review the offer, noting that the price is a “very small discount” to its closing share price on Thursday.

Shares closed ip 0.40p (0.53%).

Global markets

London and Europe were expected to open sharply lower following a sell-off in Wall Street as investors continued to fret over a rising interest rate environment.

The Dow Jones Industrial Average ended down 0.9%, the S&P 500 was 1.1% lower and the tech-heavy Nasdaq Composite fell 1.3%. Markets in Asia followed suit with the Nikkei sliding 0.9% to a 3-month low.

Netflix shares plummeted 20% after-hours as the video streaming platform as rising competition and slowing subscriber growth took the gloss off a strong end to 2021.

It expects to add 2.5 million subscribers in the first quarter, down from the 3.98 million it added at the same time in 2021. Netflix pointed to increased competition from other companies, such as Walt Disney and Apple, as a reason for the slowdown as it battles for market share.

In China, the Shanghai Composite was down 1%, while the Hang Seng index in Hong Kong was down 0.3%.

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