April Tracker, wage costs, C&C, Britvic, Shaftesbury, footfall, JDW etc.:

A DAY IN THE LIFE:

Got a couple of cheques yesterday. Fair enough, we hadn’t checked our post for quite some time but cheques, that’s a bit of a turn-up.

• See premium. Reply to this email to upgrade.

Anyway, whilst it’s the start of another five day week – this one jam packed with company announcements and ONS statistics – here’s another reminder that we’ve reintroduced Start the Day. It’s on the right in bold (or at the bottom if you receive the Word version of this email). It features:

• Start the Day with a Song (back after its Covid shutdown. Suggestions, especially more recent releases, welcome),

• Quotey McQuoteface (a Quote & general knowledge quiz),

• A Little Birdie Told Us (interesting stuff whispered in our shell-like – comments & contributions welcome)

On to the news:

LANGTON EMAIL:

The Free Email is now written in short form. Extended versions of many stories are in the Premium Email. Reply to this email if you would like to upgrade.

See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new format.

Prices for the Premium are £345 for one subscription, £595 for multiple, both plus VAT. Reply to this email to order & request invoice.

Or sign up for easy in, easy out monthly option HERE

APRIL SALES TRACKER:

The latest Coffer CGA Business Tracker, covering April, has been released. CGA says that managed groups’ like-for-like sales were up 2% in April, but it says that cost pressures have begun to ‘stunt growth’. The Tracker reports that restaurants and bars were in ‘modest growth on 2019’ but it says that pubs were flat.

The backdrop:

• Most support, including reduced rates of VAT on food & soft drinks had been removed by April. Thus the month, the first in perhaps a number of years, was ‘clean’ in that it was not skewed one way or the other by Covid measures, good or bad.

Overall:

• As mentioned above, the cohort of data suppliers as a whole were in growth compared with April 2019. This it better than being in decline but, as growth was only 2%, it means that sales volumes will be down markedly and sales with be down monetarily in real terms.

• CGA says the Tracker ‘is in growth for the third month in a row, following increases of 3% and 4% in February and March.’

• It says ‘with compound inflation since early 2019 far exceeding 2%, managed groups’ real-terms sales are still well below pre-COVID-19 levels.’

• See premium. Reply to this email to upgrade.

PUBS & RESTAURANTS:

Corporate activity.

Law firm Mayer Brown reports that the number of private equity deals in the leisure sector has doubled in the past year, from 12 to 26. PE funds have been picking up assets at comparatively low prices as the sector recovers, with deals focused on both turnaround stories and growth companies.

• See premium. Reply to this email to upgrade.

The Student Sentiment Tracker reports that there are concerns over drinks spiking, with 16% saying they have had their drink spiked at a nightlife venue and 82% concerned about spiking when going out for drinks.

Labour shortages.

Data from the NTIA and UKDSA shows that 75% of nightlife businesses say door staff shortages are impacting public safety. Additionally, 57% thought that the quality of door security staff was ‘poor’, against just 31% who thought that security staff were up to standard.

• See premium. Reply to this email to upgrade.

Inflation & cost of living issue:

Employment and average earnings numbers are out today and inflation tomorrow. The Press had picked up yesterday that inflation may have ‘soared as high as 9.3pc in April.’ The ONS usually keeps a tight lid on this sort of thing and we may be experiencing some sort of expectation management.

UK diesel prices hit a new record of over £1.80 a litre yesterday per the RAC. Petrol is £1.66 a litre. The RAC says ‘efforts to move away from importing Russian diesel have led to a tightening of supply and pushed up the price retailers pay for diesel.’

Sky reports that Ofgem would like to change the energy price cap every three months rather than every six months, as is now the case. This could reduce spikes and troughs and, if prices fall (after the expected hike in October), it would pass lower prices on to consumers faster. Ofgem says ‘a more frequent price cap would reflect the most up to date and accurate energy prices and mean when prices fall from the current record highs, customers would see the benefit much sooner.’

• See premium. Reply to this email to upgrade.

Footfall.

Springboard has updated on footfall, saying that last week, ‘footfall in UK retail destinations fell back a little…resulting in a widening of the gap from the 2019 footfall level from what we hoped was a turning point the week before last when the gap from 2019 narrowed to below -10%.’ It says that footfall was down 1.2% on last year and down 1.8% on last week.

• See premium. Reply to this email to upgrade.

Bank of England governor Andrew Bailey has been grilled by MPs. The governor says the possibility of further food price rises is a “major, major worry.” Bailey says the upcoming “very big income shock” from the cost increases will hit demand and push up unemployment. He says this is ‘a very, very difficult place for us to be in.’ He maintains that the Bank should not have done anything differently.

Employment costs & the labour market:

Employment statistics. The ONS reports that the January to March 2022 quarter showed a ‘decrease in the unemployment rate, while the employment and inactivity rates increased, compared with the previous three-month period.’ It says that the unemployment rate was estimated at 3.7%, 0.3 percentage points lower than the previous three-month period, and 0.2 percentage points below pre-coronavirus pandemic levels.

• See premium. Reply to this email to upgrade.

The ONS reports ‘growth in employees’ average total pay (including bonuses) was 7.0% and growth in regular pay (excluding bonuses) was 4.2% in January to March 2022.’ It says ‘in real terms (adjusted for inflation), growth in total pay was 1.4% and regular pay fell on the year at negative 1.2%.’

• See premium. Reply to this email to upgrade.

Discounting. Bella Italia offering half-price mains, Mon to Thurs. Restaurant Group’s Frankie & Benny’s offering 50% off vegetarian meals (no voucher required).

Tesco has said that it will pay an extra £6.6m to pork producers in order to help pig farmers to stay in business. Tesco says ‘we know there is more to do, and we will be working with suppliers, farmers and the wider industry to drive more transparency and sustainability across our supply chains and support the future of the British pig industry.’

COMPANY NEWS:

Britvic.

Britvic has reported half year results to end-March saying that it has turned in ‘another strong performance’ and says that it is ‘commencing a £75m share buyback programme.’ The company reports that revenue increased 18.5% to £719.3m (reported +16.6%) with adjusted EBIT up 20.7% to £73.5m (reported +22.3%). It says that profit after tax increased 48.7% to £45.8m and adds that adjusted earnings per share was 19.4p, up 27.8% with an interim dividend of 7.8p, up 20.0%.

• See premium. Reply to this email to upgrade.

C&C full year numbers.

C&C has reported full year numbers to end-February, saying that it has managed a return to profitability. The company reports revenues up 88% at €1.44bn with an adjusted EBITDA of €79.7m, up from a loss of €31.7m in the prior year. The group reports earnings of 9.9c but there is no dividend.

C&C says its performance was ‘driven by 207.8% growth in on-trade net revenue as a consequence of fewer trading restrictions in the year. There were 267 days of trading where the on-trade was open across Ireland and the UK, compared with 117 days in FY2021.’ The co says it had a ‘strong off-trade performance despite the re-opening of the on-trade, with net revenues of €376.3m, down 3.4% vs. FY2021.’

• See premium. Reply to this email to upgrade.

Shaftesbury PLC has announced that it has acquired a 200 year ungeared leasehold interest in the lower floors of 92-104 Berwick Street, Soho, for £27.5 million. It says ‘we have always considered ownership of this frontage of over 250 ft. at the busy southern end of Berwick Street, an important part of our long-term strategy for this north-south route through Soho. This acquisition will take our ownership of active frontages on Berwick Street to over 50%.’

Russia:

McDonald’s has decided to exit Russia and has started the process of selling its Russian business, which includes 850 restaurants that employ 62,000 people. It did not identify a prospective buyer. McDonald’s said it expects to record a charge against earnings of between $1.2-1.4bn over leaving Russia.

• See premium. Reply to this email to upgrade.

JD Wetherspoons has defended its ‘booze bus’ which is being used for an 11 hour pub crawl. Experts said the crawl promotes binge drinking, with Dr Richard Piper of Alcohol Change UK, saying ‘Schemes such as this can normalise heavy drinking.’

Campari eyes flagship bars with CEO Bob Kunze-Concewitz saying ‘In the next five years we would like to have Camparino (bars) in London, New York, Singapore’.

Where The Pancakes Are has launched a £550,000 crowdfund campaign on Crowdcube to support its expansion plans across the UK. The group has already raised £300,000 of its total from other sources. The cash will be used to help the brand launch 16 restaurants in the UK by 2026. 

Gusto Italian launches a new apprenticeship scheme which will enable team members to achieve a degree-level qualification.

Chapel Down, the market leader in English wines, yesterday announced that on 13 May, Robert Smith, incoming Chief Financial Officer, bought a total of 500,000 ordinary shares of 5 pence each at a price of 42.5 pence per share.

Bewdley Brewery in Worcestershire, and DEYA in Cheltenham, Gloucestershire, have taken home the two top awards in SIBA’s Wales & West Independent Beer Awards, winning the “cask” and “bottle & can” competitions respectively.

HOLIDAYS & LEISURE TRAVEL:

Travel Weekly reports that Royal Caribbean warns that  the booking curve is ‘going to be a bit hairy’ by the end of the year, but it reckons it won’t be far off 2019 levels. Vice-president EMEA Ben Bouldin said the market was booking much later than ever before. 

• See premium. Reply to this email to upgrade.

Colliers analysis shows that Blackpool, Bournemouth, and Plymouth topped their pre-pandemic performance across average daily rates and revenue per available room. The seaside destinations were able to secure between 25-45% higher room rates than in 2019, helping to stave off rising costs of operation.

Austria has removed all its Covid entry restrictions, meaning international visitors can enter without needing to show proof of vaccination, recovery or a negative test.

STR reports that UK hotel occupancy in April was around 87% of pre-pandemic levels. It says ‘by the time we get to the middle of May, a lot of these European gateway cities will be 90% to 100% recovered to 2019 levels.’

TUI has reportedly cancelled all holidays to Sri Lanka after the FCDO advised against all but essential travel to the country.

OTHER LEISURE:

A claim alleging Google and DeepMind ‘obtained and used a substantial number of confidential medical records without patients’ knowledge or consent’ is being brought by Andrew Prismall in a representative action in the High Court. The company’s artificial intelligence arm, DeepMind, received the data in 2015 from the Royal Free NHS Trust in London for the purpose of testing a smartphone app called Streams.

Elon Musk has said that he is minded to bid a lower price for Twitter. He has said previously that he would pay $44bn for the company. He now says ‘you can’t pay the same price for something much worse than they claimed.’ This may keep the lawyers busy. Twitter shares fell by over 8 percent to close at $37.39.

The Gym Group has announced the appointment of Luke Tait as Chief Financial Officer. Mr Tate ‘is expected to start in October 2022 and will join the Board of Directors of the Company.’

FINANCE & MARKETS:

For labour & unemployment comments, see Pubs & Restaurants above.

Trade war fears have been heightened by UK comments to the effect that the Northern Ireland Protocol will be unilaterally changed, suspended or dumped. The PM has said the UK will have a “necessity to act” if the EU does not authorise changes.

Writing in the Daily Telegraph, economist Roger Bootle says house prices could fall materially.

Sterling up at $1.2341 and €1.1819. Oil price higher at $113.99. UK10yr gilt yield down 1bp at 1.74%. World markets mixed yesterday. London set to open around 31pts higher as at 6.30am.

FORTHCOMING NEWS:

Big week this week – see details in Trading Statements & Events.

Gregg’s yesterday (shares down around 1%) and numbers today from C&C & Britvic. Pub companies M&B and Marston’s tomorrow and Young & Co on Thursday. Premier Foods will updated on the branded food market tomorrow.

We have comments from property giants Land Securities (today) and British Land (tomorrow).

The ONS has updated on employment and wages today and it will announce the April CPI number tomorrow. GfK updates on consumer confidence on Friday.

YESTERDAY’S TWEETS:

Email. Gregg’s (19wk update), wealth effect (can work in reverse), trading, inflation, discounting, fish & chips (tough times), McDonald’s & more. Today’s e/m & sign up free www.langtoncapital.co.uk. #inflation #costoflivingcrisis #hospitality

• See premium. Reply to this email to upgrade.

RETAIL WITH NICK BUBB:

• See premium. Reply to this email to upgrade.