Christmas trading 'draws line under September 11'
Pub companies and bar operators across the trade have reported strong sales over the Christmas and New Year period.
The positive results have further quashed the concerns that people would curb celebrations and stay home. Many feared the fall-out from the September 11 terrorist attacks and the threat of recession would hit the trade over the festive season.
A raft of operators including Eldridge Pope, Luminar, Po Na Na and SFI all announced strong trading.
Chorion, which many feared would be most exposed to any reaction to September 11 because of its London-focus, was the pick of the bunch. The bar and club specialist reported a rise in like-for-like sales of 4.4 per cent. The advance was impressive in that last December's figures had risen 18 per cent on the previous year.
Because of key acquisitions throughout the year, such as Red Cube, overall sales for December leapt 62 per cent to £7.1m. Sales from its 18 venues averaged £99,000 per outlet per week, compared to £92,000 last year. One City analyst said: "Chorion beat the lot. This draws a line under September 11 as much as anything does. The sector is less dependent on tourism than people thought."
Luminar, which operates the Chicago Rock Cafe and Jumpin' Jaks brands, said over the 44 weeks to 31 December like-for-likes jumped 3.4 per cent at its clubs and by five per cent on the year at its bars with dance floors.
The group reported an eight per cent jump in like-for-like sales on New Year's Eve despite worries of a slowdown. Chief executive Stephen Thomas said: "Eighteen-year-olds will stop spending on cars and white goods before they stop going to nightclubs - the social life always comes first." Overall, group turnover for the five weeks to December was up by 15 per cent.
Stockbroker Old Mutual slapped a £10.00 price target on the stock, and Teather & Greenwood and WestLB Panmure were similarly upbeat. The shares trade at a heavy discount to competitors and many feel the shares are due a re-rating and trade at heavy discount compared to other operators. But the market failed to react and the shares closed just 3.5p up for the day.
In fact, the market failed to react to many Christmas reports.
While such trading statements served a purpose in dismissing concerns related to trade fears, some City observers have questioned the validity of such announcements.
One analyst said like-for-like figures were taken with a pinch of salt because the comparisons keep changing. "SFI talked as if someone had dropped a pot of gold at their feet but then refused to change forecasts," he said.
SFI said sales had risen 30 per cent for the three weeks, to £12.7m. Like-for-like sales for the three weeks to December 31 were up 5.3 per cent. Total sales on New Year's Eve alone had topped £1.1m.
But only 37 per cent of the estate (66 outlets) had been included in the like-for-like comparisons, and that the period of comparison had changed from its normal 35 days to three weeks. "It is safe to assume these shifts in comparisons did not adversely effect the figures," he added.
Many of the upbeat like-for-like comparisons have been treated with suspicion in the City - SFI was not alone to release bullish statement but leave forecasts unchanged.
