Resilient Pubs May Appeal to Investors More Optimistic on U.K.

Shares of pubs may attract investors who predict the U.K. economy will grow more than forecast, as consumers keep hoisting pints.

Sales rose 2.1 percent in November at managed pubs and restaurants open at least 12 months, according to the Coffer Peach Business Tracker. This marks six consecutive months of so- called like-for-like increases at 24 major chains amid renewed concerns about a U.K. recession, said Peter Martin, chief executive officer at Peach Factory, which tracks the data with KPMG LLP, UBS AG and the London-based Coffer Group.

"The frequency of eating out has remained quite solid," said Martin, in Southport, England. "The pub industry has outperformed casual dining" as an "affordable treat."

The data -- a proxy for the industry -- cover pubs that are managed by operators such as Mitchells & Butlers Plc and Spirit Pub Co., Martin said. December figures, due later this month, probably will reflect continued increases, as value-minded consumers choose pub fare in lieu of more expensive meals, he predicted, adding that bad weather in December 2010 also may help the comparison.

Even as sales remain positive, the newly-created Bloomberg U.K. Pub Index -- which includes Greene King Plc and Mitchells & Butlers -- has fallen 25 percent since Dec. 31, 2010, while the FTSE 350 Index is down 6 percent. That's because investors have focused on "capital preservation," shunning companies -- including pubs -- that are highly leveraged, said Robert Griffiths, a London-based pan-European equity strategist at Royal Bank of Scotland Group Plc.

via sfgate.com

Posted via email from UK Pubs For Sale And Development