Market report: Whitbread tops Footsie as it shrugs off terror attacks

Investors checked into Premier Inn owner Whitbread today as they backed the hotels sector to ride out the impact of recent terror attacks.

The FTSE 100 company, which also owns Costa Coffee, reported robust trading last week but said little on the impact of the tragic attacks in Manchester and London.

However, Morgan Stanley’s analysts said a field trip of hotels run by the top operators including Premier Inn showed demand remained strong.

“While the terrorist attacks in Manchester and London did cause an immediate demand dip, this was very short lived and it has seen a very quick bounceback,” analyst Jamie Rollo said after a tour of the company’s Tower Bridge hotel.

The tour clearly impressed as Rollo and his team raised their forecasts for revenue per available room to 2% growth, which translates to a 1% increase in Morgan Stanley’s pre-tax profit forecasts for this year to £605 million.

The write-up lifted Whitbread to the top of the FTSE 100, up 81p, or 2%, to 4040p. The blue-chip index started the week 38.65 points higher at 7462.78 as the oil price recovery — Brent was up 48 cents to $46.02 a barrel — helped it to claw back some of last week’s losses.

Durex-to-Dettol group Reckitt Benckiser rose 95p, or 1.2%, to 7951p as Credit Suisse gave its backing to the £13 billion takeover of US baby milk maker Mead Johnson.

The investment bank said it looked as though Reckitt had “timed its purchase very well”.

Beleaguered shareholders of Capita got a boost after the outsourcer confirmed the sale of its asset management services arm for £888 million.

The sale to Australia’s Link Group, which was announced late on Friday, surprised most in the City who were expecting bidders to fork out around £700 million. The shares were lifted 19.5p to 711p.

North Sea oil firm EnQuest surged 2.75p, or 9%, to 32.25p as its Kraken field started producing oil, one of the largest new fields to come on stream in the North Sea in a decade.

On AIM, brickmaker Michelmersh jumped 7.25p, or 10%, to 79.25p after buying Barnsley-based Carlton Main Brickworks for up to £38 million.