Wagamama owner hit as staff shortages bite
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.
Wagamama sales were 21pc up on pre-pandemic levels, while sales in pubs and leisure areas were up 12pc and 18pc respectively. meanwhile, losses in the six months to July 4 had narrowed sharply to £58.8m from £234.7m 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 10.6pc, 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 7.9pc, or 3.5p, to 41p, highlighted ‘potential supply disruption’ at ports ahead of Christmas.
Keywords Studios, a provider of support services to computer game developers, sank 4.8pc, or 154p, to 3046p after warning that it expects growth to slow amid a tight labour market.
Toy and games firm Character Group fell 15.2pc, 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 10pc lower than the prior year figure of £12m.
meanwhile, tonic maker Fevertree said it had been ‘increasingly impacted’ by disruption in supply chain networks, particularly global shipping and a lack of lorry drivers. But it rose 9.9pc, or 212p, to 2350p after a 28pc 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 0.3pc, or 17.57 points, to 7016.49, while the FTSE 250 dropped 1.1pc, or 254.45 points, to 23,432.81.
Food delivery firm Just Eat Takeaway was the biggest bluechip faller, down 4.5pc, 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 1.1pc, 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 3.1pc, or 9.25p, to 309.25p while Shell was lifted 1.7pc, or 25p, to 1475.2p.
mid-cap Tullow gushed 5.4pc, or 2.43p, to 47.43p as it swung to a £67m profit in the six months to June 30 from a £960m loss in the same period a year ago.
Housebuilder Redrow ticked up 0.1pc, or 1p to 701p after a 124pc rise in profit to £314m 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 1.4pc, or 17p, at 1161p. Consumer review site Trustpilot got a bad rating, falling 6.6pc, or 27.4p, to 387p after losses ballooned in its first half – to £12.4m, nearly three times the £4.2m loss reported in the same period last year.
Primark owner Associated British Foods dropped 3.2pc, or 61p, to 1852.5p after saying that its new sustainability strategy was expected to cause a ‘modest increase in costs’.