Shares round-up: banks, pubs and PZ Cussons

Renewed risk appetite made it a second positive session for UK stocks. Here are the winners and losers.

Night-time curfews and more working from home failed to stop leisure stocks from joining a rebound in which the FTSE 100 index and FTSE 250 index rallied more than 1.5% Wednesday.

The second successive rise for the FTSE 100 following Monday's hefty sell-off owed much to gains by dollar-earning companies, after the pound weakened to a two-month low in the wake of the fresh Covid-19 curbs.

AstraZeneca (LSE:AZN) and GlaxoSmithKline (LSE:GSK) rose more than 2% to help the FTSE 100 index to return within sight of the 6,000 barrier. At the other end of the market cap spectrum, Rolls-Royce (LSE:RR.) and BA owner International Airlines Group (LSE:IAG) were more than 6% higher.

This renewed risk appetite also helped housebuilders Taylor Wimpey (LSE:TW.) and Barratt Developments (LSE:BDEV) to climb 5% and bombed-out banks NatWest (LSE:NWG) and Barclays (LSE:BARC) to lift 4%.

• Dividends, bank shares and investment themes
• Stockwatch: should you buy or sell JD Wetherspoon shares?

In the FTSE 250, the more UK focused index was 1.7% higher after gains for some of the second tier's bigger stocks, including Direct Line Insurance (LSE:DLG), Howden Joinery (LSE:HWDN) and Tate & Lyle (LSE:TATE). Cinema chain Cineworld (LSE:CINE) surged 13% ahead of tomorrow's interims results, while easyJet (LSE:EZJ) and Wizz Air (LSE:WIZZ) also pushed 7% and 4% higher respectively.

Pub chains including Mitchells & Butlers (LSE:MAB) and JD Wetherspoon (LSE:JDW) continued to take the curfew restrictions in their stride after City analysts said only a small proportion of their sales are taken after 10pm. The pair rose 6% and 4%, albeit from levels close to their low points for the crisis. 

Revolution Bars (LSE:RBG), which has more than 50 sites in town and city centres, was one exception after falling another 12% to 10.8p.

Even food travel firm SSP (LSE:SSPG) weathered the storm, despite the Upper Crust and Ritazza owner reporting that like-for-like sales are likely to be 86% down in the six months to 30 September at a revenues cost of about £1.3 billion. Actions to reduce the cost base mean second half operating losses are expected to be in the mid point of the £180 million to £250 million set out in June.

Sales are currently at 24% of pre-Covid levels, with demand expected to remain subdued this winter as more office employees are allowed to work from home. It pledged to re-open units where it sees demand recover. Shares rose 14% to 205.6p.

One of the biggest falls in the FTSE 250 index came from PZ Cussons (LSE:PZC) after it braced investors for a volatile year, despite the benefit of strong recent trading by its Carex hand wash brand.

Revenues for the first quarter to 31 August were up by 23% after Carex increased its market share in the UK to more than 40%, although this was offset by revenue declines for Original Source and Imperial Leather and a modest rise for the Beauty segment.

Analysts at Investec Securities cut their pre-tax profit forecasts for this year and next after Cussons warned of “volatility and risk” as well as the need for increased investment as part of the multi-year turnaround of the business under a new CEO.

Encouraged by a strong balance sheet, Investec still has a ‘buy’ recommendation and price target of 240p. Shares were 10.5p lower at 204.5p today, having recently set a high point for the year.

• UK banks: material risks and recovery value
• Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP)

Among smaller stocks, Joules (LSE:JOUL) shares rose 7% to 98.6p after management said trading in the 13 weeks to 30 August had been ahead of expectations. Revenues were down 18%, with a strong performance for e-commerce channels helping to offset the impact of many stores and those of its wholesale partners being closed for part of the period.

Models and collectibles group Hornby (LSE:HRN) rose almost a penny to 34.4p after it said recent trading had been better than initially expected ahead of the all-important Christmas period.

Ten Entertainment Group (LSE:TEG) also gave a boost to its share price after it said that all of its 46 bowling centres had now reopened with trading at 83% of previous levels. It has returned to profit and cash generation, despite only having 50% lane capacity. Shares were 3% higher at 128p, compared with 334.5p in January.