I would like to say how much I enjoy the e-mails from Langton Capital on a daily basis. I use the newsletter as an ideal way of keeping me up to date with what is going on financially in the drinks industry.
Tenanted pub company
Pub closures, Domino’s. discounts, 888, Brexit delay etc.:
A DAY IN THE LIFE:
I’d suggest that you never give you 12yr old daughter a tenner to buy a couple of Christmas cards as I found to my cost at the weekend that she’ll buy three rather than two (‘they all looked so nice’), spend £9.97 and give you 3p back.
Because, though it’s possible to pick them up at ten-for-50p, the ones with glitter on, with fold out Xmas Trees and the rest ‘look better’ and ‘Christmas only comes around once a year’ doesn’t it?
Hence the Bins of Britain will be full of expensive bits of cardboard come the 5th of Jan or whatever as the celebration card industry once again sucks a few million quid from the hard-pressed UK consumer. Still, twas ever thus. On to the news:
PUBS & RESTAURANTS:
• New data from the Market growth Monitor from CGA has found that the number of pubs in the UK has fallen by 11% since 2013.
• Rooney Anand, currently CEO of Greene King, is to take over as chairman of Casual Dining Group, reports Propel.
• Domino’s Pizza Group’s shares have fallen 7% following reports of a disagreement between the firm and its franchisees. The Sunday Times has reported that 11 of the group’s biggest franchisees have threatened to ‘declare war’ on the firm unless they get a bigger slice of the company’s profits.
• Discounts still around in the middle of December. Prezzo 40% off mains, Frankie & Benny’s 30% off, Pizza Express 25% off, Bella Italia second main for £1, Giraffe 2-4-1 on mains, Domino’s 30% off orders over £25.
• Nearly 50% of hospitality companies are at risk of prosecution for breaching GDPR rules, research from Proband has indicated.
• Chief Executive of UKHospitality, Kate Nicholls has stated: ‘Further ambiguity is unhelpful for businesses and undermines their attempts to plan and invest. We urge all sides to come together to provide the clarity that the country and businesses are looking for’.
• Chief Executive of the Food and Drink Federation, Ian Wright, has also remarked on the government’s pulled vote commenting: ‘FDF members will be dismayed by the political and economic chaos provoked by a further delay to the Brexit process. Every political decision takes us closer to the catastrophe of no-deal. Each extra day of uncertainty diverts time, effort and investment. It undermines growth and employment. And as we have seen from the weakness of Sterling, constrains businesses ability to plan and export’.
• The Alan Yau founded, Duck & Rice is considering overseas expansion with director of the group Ted Kennedy saying: ‘We see opportunities to grow a licensing platform in London, the Nordics, mainland Europe and the Middle East and are now actively assessing potential licensing partners with local geographic knowledge to develop and grow our brand with us’.
• EI Group has announced that it bought back another 279,613 of its own shares for cancellation at 175.8p per share on Monday.
• Bordeaux Wines reveals wine is still the most popular beverage at Christmas parties, with 59% citing it as their first choice. The survey also showed that the average Brit receives four bottles of wine throughout the festive period.
• IQL signs two independent food and drink operators, Figo and Signorelli, to its £2.4bn mixed-use neighbourhood development in Stratford.
• Ei Publican Partnerships has joined forces with leading UK brewers to drive footfall by giving away up tp 45,000 free drinks in January.
• Ossett Brewery sells a 50% stake in its the group to Mark Hunter. The group includes Ossett Brewery and its 26 retail sites.
• Electronic receipts are being used to bombard shoppers with marketing material reports Which? New tech may occasionally be used for unintended purposes until the medium settles down (or is legislated against).
• Electronic point of sales machines have been around for decades. However, there are now moves ‘for environmental purposes’ not to supply receipts but instead to take phone numbers & mobile phone numbers in order to acknowledge payment etc. This information can be used to record customer satisfaction levels (see TruRating) or it may be used for marketing, push-notifications etc.
• Hotel Chocolat has opened its New York, with Chief Executive Angus Thirlwell commenting: ‘As we evolve into international markets, our core "More Cocoa, Less Sweet" mantra gains traction across the globe. In Tokyo our hot chocolat and sculpted chocolate batons were an instant sell-out, whereas New Yorkers went wild for our peanut pralines when we opened here yesterday’.
• Poundstretcher has areported a 2.5% fall in sales to £387m in the year to the end of March, with pre-tax profits tumbled down by around a quarter to £2.1m.
HOLIDAYS & LEISURE TRAVEL:
• Leeds Bradford Airport receives the green light for an extension of its main terminal. The airport plans to increase annual passenger numbers from four million to seven million by 2030.
• STR has released London hotel data for November, showing occupancy up 2.5% to 85.9%, average daily rate increasing 3% to £156.94 and RevPAR climbing 5.6% to £134.85.
• The government and Transport for London have confirmed a bailout package of £1.4bn for the perennial delayed crossrail project. The project has now been delayed to a time and place beyond autumn 2019.
• 888 has announced that it has acquired the remaining interest (53%) in All American Poker Network for US $28m. 888 says ‘the acquisition gives the Group full flexibility to deliver on multiple potential growth opportunities including developing new strategic partnerships.’ CEO Itai Frieberger says ‘the acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US.’
FINANCE & ECONOMICS:
• ONS reports growth in the UK slowed to 0.4% in the 3mths to October, down from 0.6% in the 3mths to September. The ONS reports that slowing car sales and a manufacturing slowdown were partly to blame. IMS Markit stats are pointing to around 0.1% in the Q4 as a whole.
• Sterling has fallen to its lowest level since April last year. Trading at $1.2561 and €1.1059.
• Oil down at $59.91
• UK 10yr gilt yield down 6bps at 1.21%.
• World markets: UK & Europe down yesterday but US higher. Far East down in Tuesday trade.
o Vote delayed, uncertainty reigns. Ministers promising the vote would happen till a few minutes before it was aborted. Speaker Bercow not happy. Politics in a ‘dark place’ says Channel Four. Next steps unclear. Mrs May in Europe on a glad-handing tour. EU saying deal cannot be amended.
o German Foreign Minister Heiko Maas says there is no possibility of changing the agreement on Britain’s withdrawal from the EU.
o EU has said that the UK could unilaterally drop its plans to leave the body. Likely moves now? A purely cosmetically re-jigged Theresa May semi-Brexit, a hard Brexit or a People’s Vote. Any one of the above could include a temporary suspension of Article 50 (if the EU27 agree).
o As others see us. Washington Post: ‘There’s no Good Way Out of the Brexit Disaster’. Guardian – this is a ‘cowardly blunder’. Plan B is to delay. Der Spiegel – UK is ‘Isle of Madness’. Etc. Etc. Etc.
PRIOR DAY LATER TWEETS:
• Later tweets: Times says former marketing chief @ CAKE raised issues re finances over 1yr ago. Says ‘raises more questions about the management’
• The Luke Johnson led Gail’s Bakery has seen profits fall to £142,000 in the year to February 2018 down from £2m
• Suggestion earlier in 2018 that Bread was about to be sold to Patisserie Holdings. Never happened. Maybe quite a good thing…
• Tories deemed by some to be unfit to govern. Lord Heseltine has said younger people ‘will never forgive us’ for the current Brexit mess
• Springboard reports H Street footfall has decreased every year since Black Friday became a thing back in 2013
START THE DAY WITH A SONG:
Yesterday’s song was A Little Time by The Beautiful South. Today who sang:
The creature in the sky,
Got sucked in a hole
Now there's a hole in the sky
RETAIL NEWS WITH NICK BUBB:
Carpetright: Today’s interims from the embattled Carpetright make grim reading, with underlying PBT plunging into a £12.4m loss (vs a £1.2m profit a year ago) and LFL sales in the UK were down by 12.7%, but management boast of the “marked sequential improvement” in Q2 (from -16.8% in Q1 to only -8.9%) and the whole statement is surprisingly cheerful in tone. CEO Wilf Walsh insists that the restructuring programme is on schedule and that the group can see off its rival Tapi and return to profits in the long term, despite challenging UK market conditions (and the fact that the upstart Tapi is now opening concessions in Homebase).
News Flow This Week: The latest Kantar/Nielsen grocery sales figures (for the 4/12 weeks to Dec 1st/2nd) come out at around 8am. Tomorrow brings the Dixons Carphone interims/Strategy Review and the Superdry interims. We then get the much-awaited Sports Direct interims and the Ocado Q4 update on Thursday.
Crystal Ball Watch: If you are finding it hard to weigh up the outlook for the next 2 weeks of High Street trading, let alone next month’s trading, then spare a thought for the members of the prestigious KPMG-Ipsos Retail Think-Tank, who sit down this afternoon to try and assess the outlook for the sector in 2019, despite the acute political/Brexit uncertainty.