Long weekend to provide some respite for battered  British pubs 

Holiday to commemorate 70 years of Queen Elizabeth’s reign expected to boost the sector’s recovery

'The platinum jubilee may represent a chance to put cost-of-living concerns on ice for a weekend.'

British households flocking to bars and beer gardens to celebrate their queen’s jubilee over an extra-long weekend may provide some respite to the UK’s pub stocks, which are still well below pre-pandemic levels.

Two years of on-and-off curbs on socialising have left Marston’s, JD Wetherspoon, and Mitchells & Butlers, in which JP McManus and John Magnier hold significant shareholdings, trading at about half of their 2019 levels. 

But with the four-day UK weekend having already kicked off on Thursday and a restriction-free summer, shares in pub operators are seen rising 30% to 50% over the next 12 months, according to price targets tracked by Bloomberg. That is far more than the 20% upside predicted for the broader UK market. 

The holiday to commemorate 70 years of Queen Elizabeth’s reign will add momentum to the sector’s recovery, according to Young & Co’s Brewery. 

The London-based pub chain said last month that 13-week sales were already up 17% versus 2019, adding it expected to see record-breaking sales during the festivities.

“The platinum jubilee may represent a chance to put cost-of-living concerns on ice for a weekend,” Michael Hewson, chief market analyst at CMC Markets UK, wrote in a research note. 

“The one-off tourism boost ought to be good news for hospitality, leisure and travel businesses,” including pub operators, he said. 

As for the longer term, pubs may also be a defensive bet as the UK faces a deteriorating economic outlook and soaring living costs, according to Mark Swain, a fund manager at Sanlam Investments.

“Consumers tend to keep drinking and smoking during a downturn, and there’s no reason to think the outcome wouldn’t be the same this time,” he said. 

Travel and leisure sector

Jubilee-weekend tourism is also putting investor focus on the broader travel and leisure sector, though the outlook for companies is mixed. 

Whitbread, which operates low-cost brand Premier Inn hotels, is still benefitting from pent-up demand despite the squeeze on consumers. 

The picture for travel and leisure stocks in 2023 could be “quite difficult,” with inflation putting pressure on costs for companies, Goodbody analyst Paul Ruddy said.  

Meanwhile, shares in the leading pub and chains have taken a battering amid fears that British inflation will weigh on earnings on dividend payouts. 

Mitchells & Butlers shares have lost a third of their value from a year ago and is now valued at £1.24bn (€1.45bn). 

The group owns 1,600 outlets — including the All Bar One, Browns, Ember Inns, Harvester, Miller & Carter, Nicholson's, Sizzling Pubs, Toby Carvery, and Vintage Inns. 

Wetherspoon, which owns pubs across Britain and Ireland, have fallen 44% from a year ago. It is now valued at £961m. 

• Bloomberg and Irish Examiner