Market Report: Investors climb aboard the leisure revival

ARE LEISURE shares at last ending their long, debilitating bear run? The sudden awareness of the neglected value lurking on the market undercard, plus the inevitable takeover whispers, helped the run-down sector score a 3.3 per cent gain on a day most shares were in retreat.

Hopes that the nation will avoid recession despite more Confederation of British Industry gloom, and that consumer spending may pick up are other factors behind the leisure revival. The prospect of another interest- rate cut helped sentiment.

The sector has been devastated as doubts set in about growth and profit forecasts were pulled back. Many shares riding at a peak last Easter are, despite hesitant headway, still uncomfortably near their year's lows.

First Leisure Corporation, where takeover talk is never far away, rose 11.5p to 213.5p and Northern Leisure 5p to 129p. Hard pressed Rank was a shade firmer at 207.5p. London Clubs International, the casino group, gained 6.6p to 167.5p. Manchester United, declared the world's richest football club, made a modest contribution, 1.5p up at 225.5p.

Sentiment was helped by an upbeat Granada shareholders meeting and the takeover activity in the pubs industry.

Greenalls, the hotels and pubs chain, rose 12p to 342.5p on the suspicion that its big City investors are pushing for corporate action from the longtime underachiever.

But the once-high flying Old English Pub Co will unsettle pub shares today after rolling out a shock profits warning and parting company with Stuart Simpson, its finance director. The shares plunged 103.5p to 157.5p. They have touched 384.5p.

OEPC, which struggled with a rights issue last year, said profits in the year ending next month would be around pounds 7m compared with market hopes nudging pounds 9m. This is the second time a pubs company has come a cropper; last year Regent Inns, talking merger with SFI, the old Surrey Free Inns, saw its shares crash from 388.5p to around 150p after a profits warning.

A flurry of takeover activity last year caught OEPC on the hop: it possibly expanded too quickly, taking its eye off the rest of its business, and costs spiralled at the acquisitions as well as in the established parts of the group.

However, the takeover ferment in the pubs sector increases OEPC's vulnerability to a strike, although its mix of country inns and small hotels would make it difficult to swallow for most pub groups.

Ladbroke led the Footsie leader board, cantering 14.5p higher to 243p.

The more enthusiastic leisure atmosphere could not have emerged at a better time for bookie William Hill, which is betting on a share flotation next month.

But worries that Bass may undermine the new display of confidence with a sobering trading statement today caused some anxiety, leaving the brewing and hotel group's shares down 14p at 856p.

Granada described trading as "very positive", prompting a 55p jump to 1,151.5p. However, it denied market talk of a bid for Whitbread, up 11p to 909.5p. Chief executive Charles Allen said: "Whitbread is definitely not on our agenda."

Footsie, after an early gain, fell 72.7 points to 5,940.3, ending a three- day winning steak. Even the ebullient mid cap index, up in the last seven trading sessions, took a breather, falling 2.1 to 5,213.2. Still, the small cap index was in positive territory, advancing 12.7 to 2,182.5. Once again turnover was heavy, nudging 1.2 billion shares.

British Airways rose 16p to 374.5p as the fall in the important premium traffic figures narrowed, and Reckitt & Colman added another 21.5p to 891.5p on the sudden departure of well compensated chief executive Vernon Sankey, which is seen as improving prospects of a bid.

Daily Mail & General Trust, the newspaper publisher, becomes a Footsie constituent today. It has, as expected, been given a berth following the BTR merger with Siebe. Daily Mail ordinary shares celebrated with a 337.5p jump to 3,275p and the "A" shares 356p to 3,452p. On their last day as separate entities BTR added 4.75p to 133.75p and Siebe 10p to 250p. There are hopes the new engineering combine, to be called BTR Siebe, will yield favourable circulars as analysts connected with the merger become free to issue ideas and profit estimates.

ICI, year's figures today, fell 26.5p to 518p. Depressed profits of pounds 315m are expected. Although the dividend is safe, the view in some quarters is that the group should consider cutting the payment.

Sage, the computer group, scored a 77.5p gain to 2,040p, a peak, after raising pounds 66.6m through a placing by BT Alex.Brown. The investment house sold the shares at 1,910p. A US group is being acquired for pounds 88m.

Carlton Communications firmed 25p to 631p as Lehman Brothers remained positive, and BP Amoco gained 10p to 865p on a Commerzbank upgrade.

Takeover speculation was still rife. Engineer Weir, attracting US interest, gained 9.5p to 304p and chemical materials maker Scapa rose 14.5p to 124.5p in busy trading on talk that a strike was imminent. BICC, the cable and construction group, was back in the limelight with a 4p advance to 78p and House of Fraser, the department stores chain, hardened 5.5p to 92p in brisk trading as speculative activity returned.

Alexander Russell, a maker of concrete products, hardened 29.5p to 120p after admitting takeover talks. Sedgemoor, which distributes electronic components, gained 6p to 45p; it reported it had received "a number of preliminary proposals". But it seems the deals on offer are not good enough to gain the support of the board. Energy Technique fell 0.5p to 21.5p after a warning that it may go private because of poor conditions for small companies.

JBA, up on Tuesday on hopes of corporate activity, tumbled 21.5p to 121p after forecasting a pounds 6.5m loss against a pounds 5.2m profit.

SEAQ VOLUME: 1.1 billion


GILTS INDEX: 116.29 -0.24

DIAGEO fell 28.5p to 651.5p on worries that a share sale by Bernard Arnault, the French tycoon, is imminent.

Mr Arnault's group, LVMH, owns 10.8 per cent of the spirits behemoth and may be in need of cash for its fashion build-up.

Mr Arnault, who quit as a Diageo director - presumably to give him more flexibility over selling shares - is thought to have held talks about unloading at least part of the LVMH interest.

ENGINEER Scotswood Industries is the latest to be the subject of a reverse takeover.

The AIM-traded company is buying Midas Data Communications, involved in providing vehicle location systems, and taken an option on a similar operation. It is placing shares for pounds 1.65m.

The engineering businesses are being sold to their managements for around pounds 1m. Scotswood shares were suspended at 11.5p. They were 21.5p in October.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
The truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the iWatch for you? Well, it depends if you want for the fitness tech, or the style
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own