A light in the black?

What a difference a results announcement can make to the listed pub sector. And what a pleasant change to see sentiment turn positive on the back of good news for once.

In recent weeks shares in leading pubcos were being knocked down as easily as a third-rate boxer on mogadon. No question, last minute fears viz the smoking ban and other consumer-led doom 'n' gloom stuff - rising interest rates, shrinking disposable income, ad nauseum - were shaking the market.

Then, along comes Greene King last week with its own little ray of sunshine in the form of annual results that revealed a) a good performance across its managed and tenanted estates, as well as its brewing operation; b) its Scottish performance had beaten all expectations - despite coming from a low starting point, the food sales hike was still impressive - and c) it's looking at venturing into an 'OpCo/PropCo' partnership venture that could unleash £500m for acquisitions or cash back to grateful shareholders.

The clouds that had loomed in recent weeks vanished after the Bury brewer's announcement. Its own shares, which had lost 10 per cent of their value in the previous fortnight, grabbed back the deficit in two days, while those in Punch Taverns, Enterprise Inns, Marston's, et al, saw a reversal of their own earlier downward spiral.

As I suggested previously when shares had slumped, there were doubtless those grabbing stock on the (relative) cheap with both hands and a bucket. Those who bought last week will be smiling today as the long-term upside looks decidely rosier. Again. For now, at any rate.

Looking further ahead, what happens when the big boys run out of M&A steam - activity which currently bolsters many a listed pubco's stock - is a question that is beginning to tax some observers.

One presumes that ultimately the 'leviathans' will break up and the whole estate-building process will begin again, creating that pioneering spirit once more. Whether this will be under the auspices of the stock market or privately-owned operators is the $64,000 question.

And no, I don't have the answer, I'm afraid…