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
SEAQ TRADES: 79,052
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.Reuse content