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Shares in the hotel company behind TGI Fridays in the UK have plummeted and it is on the brink of collapse.
In a spectacularly bleak stock market update, Hostmore dropped a series of bombshells that left investors on the brink of total ruin.
The company, which has 87 restaurants in the UK, said sales so far this year are 12 per cent lower than the same period last year.
Hostmore blamed “persistently warmer weather than the comparative period in 2023 and weak underlying consumer spending.”
In a spectacularly grim stock market update, TGI Fridays owner Hostmore dropped a series of bombshells that left investors on the brink of total ruin.
The firm also said it had abandoned plans to buy TGI Fridays in the US, where there are 128 outlets, in a deal that would have been worth £177m.
And it warned that the sale of its UK restaurants – part of a plan to become a larger franchise-operated business with restaurants on both sides of the Atlantic – will not “recover any significant value”.
Hostmore said it would instead be “liquidated and delisted from the London Stock Exchange” when the sale is completed this month.
TGI Fridays will continue to operate under new ownership, it added. Hostmore shares, which were trading at 156p on their first day of trading in November 2021, fell 90.8%, or 8.63p, to 0.87p.
Russ Mould, investment director at brokerage AJ Bell, said that “Hostmore has effectively lost its way as a listed company”. He described it as “a terrible start to the week” for the company.
By contrast, Mould hailed “a good start” for the broader London market, with the FTSE 100 looking to put six consecutive days of losses behind it, rising 1.1 per cent, or 89.37 points, to 8270.84. The FTSE 250 gained 0.8 per cent, or 156.88 points, to 20650.88.
Stock Observatory – Synectics
Security firm Synectics has won another contract worth £2.4m relating to the upgrade and expansion of the surveillance system at a major gaming resort in South East Asia.
The deal follows a £7.6m contract announced in June.
AIM-listed Synectics said the unnamed client has been using its Synergy software platform since 2014 and the contracts will upgrade existing systems.
Shares rose 4.8 percent, or 9 pence, to 195 pence.
The rally came as investors await crucial economic data — on jobs and wages today and gross domestic product tomorrow — while looking for clues on the outlook for interest rates.
The Bank of England cut rates to 5 percent from 5.25 percent last month and while it is expected to keep them there when it meets next week, two more cuts are likely by the end of the year.
Of perhaps even greater importance, certainly for global markets, is what the US Federal Reserve decides to do next week.
An interest rate cut is widely expected, but it is not known whether the Fed will choose to reduce benchmark US borrowing costs by 0.25 percentage points or 0.5.
In London, shares in IT services firm Computacenter came under pressure after the company reported a drop in revenue and profit.
The company said sales fell 11.6 percent in the first half of the year to £3.1 billion, while profits fell 31.6 percent to £84 million.
Chief executive Mike Norris highlighted “an encouraging start to our third quarter” and added that the company expects “stronger momentum in the second half” of the year. However, the shares fell 6.9 percent, or 178 pence, to 2,410 pence.
Magners cider maker C&C Group said trading in the six months to the end of August (the first half of its financial year) was “in line with expectations”, with revenue down 3 per cent.
C&C has also launched a share buyback worth 15 million euros. Shares in London rose 1.1%, or 1.6 pence, to 152.6 pence.
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