SHARES in Hostmore, the hospitality company that owns the Fridays and 63rd + 1st brands, have fallen sharply after it warned soaring utility prices will lead to a near-£6 million rise in costs and lowered revenue expectations for the second half.
Hostmore told the stock market today that current utility prices will result in an incremental cost of around £5.8 million compared with last year, after the mitigation of hedges, sending shares down nearly 13 per cent in morning trading.
The company, which has around 90 outlets across the UK, reported revenue of £98.5m in the 26 weeks ended July 3, up from £39.9m at the same stage last year.
However, it said like-for-like sales were 14% lower in the 10 weeks since the period-end, which Hostmore said reflected weaker consumer demand and factors such as rail strikes and heatwaves, offset partially by cost-saving initiatives.
The company, which expects periodic rail strikes in the second half, warned that trading conditions are “expected to remain challenging, exacerbated by inflationary pressure on the consumer and the risk of higher utilities supply pricing.”
And, in a statement before the UK Government issued details of its energy relief scheme for business this morning, Hostmore said like-for-like revenue expectations for the second half are now forecast to be 11% lower than the comparative period in 2019.
Hostmore chief executive Robert B Cook said: “We have delivered a stable performance for the first half of FY22 despite the undeniable and growing pressures on the consumer in the current environment. Against this tough backdrop, we have also taken swift action to manage the inflationary impacts that we and the rest of the sector face.”
He added: “We will continue to adopt a cautious approach, reflecting ongoing uncertainty in the UK trading environment and in particular utilities pricing, mitigating costs wherever possible, whilst continuing to invest in our proposition, our people and new sites.
“We, like many others in the sector, await further clarity on more Government intervention to support the hospitality industry in light of the inflationary pressures being felt by consumers and hospitality businesses alike, particularly in relation to energy.”
Shares in Hostmore were trading at 20.55p at around 1pm, down 12.9% or 3.05p.
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