A Day in the Life:

Follow us on Twitter at either @langtoncapital or @brumbymark.

Find previous emails at http://www.langtoncapital.co.uk/daily-notes/ 

So my computer keyboard is starting to wear out and it’s becoming difficult to see where some of the letters actually reside.

And that can be a bit of an issue because, though years of slogging away before a keyboard have made me a reasonable touch-typist, I’m occasionally unsure and have to guess where the letters ‘e’, ‘a’, ‘s’ and a couple of others actually live.

So hooray for the spellchecker, is what I say.

Though it does Americanise some of my spelling and still seems to struggle to recognise everyday words/place-names such as such as the local buzzing cities of Raskelf, Ulleskelf and Osbaldwick. Fridaythorpe isn’t there either and Giggleswick it thinks is a joke.

Anyway, we’ve nearly done our bit for 2015. We’re intending to produce an email tomorrow but the news-flow has dwindled to a trickle. Still, for what it’s worth, let’s move on to the news:

The News:

Pub, Restaurant & Drinks Producer News:

• Barclaycard data shows consumer spending rose by 3.9% in 2015 to its highest level in four years thanks to low inflation, higher employment and wage growth. Entertainment (which includes pubs, restaurants, cinemas, concerts and most leisure activities) and travel spend jumped 11.5% and 7.5% respectively, ensuring they were the strongest performers for the third year running.

• Barclaycard data: The strong performance was driven by a 14.4% increase in restaurant spending and by 9.7% more being spent in pubs. Food and drink and general household spending failed to keep up, however. Despite enjoying rising disposable incomes and higher levels of employment, consumers are increasingly doing their shopping at discount stores. Consumer spending in discount stores have grown by 12%, while the overall amount spent per transaction has fallen by 4.1%.

• Barclaycard data: Chris Wood, Chief Operating Officer of Barclaycard, commented on the data: ‘Alongside the impact of working population growth and higher wages giving households a bit more money to spend, the falling cost of filling the car and feeding the family have cut them a little more slack this year and allowed consumers to live a bit more for the “here and now…” we’ve seen record spending growth on entertainment and travel. Households have adjusted the dial on balancing their desire to save money with treating themselves.

• Barclaycard data: ‘Fiscal responsibility remains, however, as shown by the double-digit growth for the second-year running at discount stores and a further shift from in-store spending to online where consumers have more choice and find it easier to compare prices, and we expect it will do so for some time to come.’

• Ex-M&B CEO Alistair Darby was paid £540,000 for loss of office on top of his £878,000 salary after resigning on 26 September.

• The Beer Studio has launched a new range of bottled craft beers following significant growth in the packaged craft beer sector. The group has introduced a range of three ales (Burnt Sienna 5.0%, Fiery Phoenix 5.2%, and Glacier Blonde 4.2%) and a continental style lager called Seared Saaz Lager, 4.2%.

• The Beer Studio, based in MediaCity UK, now produces 34 draught beers and has another 15 cask beers planned for 2016.

• UK shoppers spent £200m on spirits in the first two weeks of December, up by £7m despite overall supermarket sales falling.

• The amount of people in the UK admitted to hospital for alcohol poisoning has doubled in the last six years to 148.8 per 100,000 people. The number admitted due to alcohol related issues is said to be up by 50% in the last 6yrs.

• Reduction in alcohol consumption inconsistent with ‘increase in hospital admissions’. Could be fewer people drinking more. Or different analysis measures on admission. Not sure, overall, if the rate of admissions has doubled or whether the number of people being recorded as ‘alcohol related’ has doubled. Stats now show that young women may be more at risk than young men. Admissions seem to be correlated with measure of deprivation.

• Drinks distributor Matthew Clark expects drinkers to become ‘increasingly adventurous’ in their wine choices and companies will spend more on eye-catching labelling. Beer and premium spirits have also been earmarked for a strong 2016.

• Christmas home delivery orders have grown by more than 50% at northwest-based retailer Booths.

• The e-cig industry has welcomed PM David Cameron’s comments on the innovation being a ‘legitimate path’ for improving the nation’s health

Leisure Travel:

• PHD Private Equity is to support Manchester-based Canada specialist 1st Class Holidays with a £2.5m investment. Founder Paul Ainsworth says ‘over the last 20 years we have built a high quality service offering and established a strong market position particularly in Canada.’ He tells Travel Weekly ‘the backing from PHD and its partnership approach will give us an even stronger platform to accelerate our plans and take our business to a new level. It is great to be working with an enthusiastic team who share our conviction that our business can be scaled up.’

• Blackstone-owned Motel 6 has announced that it has opened its 1,300th Motel 6 property, with the opening of a unit in Bakersfield

• Amsterdam has topped the list of searches experienced by Trivago for New Year’s Eve holiday bookings. Dublin, Paris, Dubai and New York City were the other destinations within the top 5

Other Leisure:

• Nike reports 20% increase in y-o-y net profits in the quarter to end-Nov. Future orders also looking good & Greater China strong.

• Sportech says it ‘confirms that it has received a number of indicative proposals in respect of The Football Pools’. The Sunday Press had it that Netplay TV had made an approach to buy the business. Sportech says ‘consistent with the Board’s focus on maximising value for all shareholders, the Board has decided to invite each interested party to submit their best and final proposals by mid-January 2016. The Board will then consider any such proposals and determine whether it is in the best interests of shareholders to proceed with a sale of the business.’ It says ‘a further announcement will be made in due course.’

Finance & Markets:

• US economic growth estimate revised down. Q3 growth now said to be an annualised 2.0% in Q3 vs earlier 2.1% estimate

• Number of homes sold in UK down sharply in Nov per HMRC. Says some 106k properties transacted vs 122k in Oct. May be that seasonality is having an impact & ‘amateur landlords’ are being put off by increases in property taxes.

• Rate of home sales in US also lower in November. Hits slowest rate of sales since April 2014

• UK markets finished higher yesterday following hints of further stimulus out of China & increased UK consumer confidence.

• World markets: As mentioned, UK up yesterday but Europe down. US higher & Far East up in Weds trading

• Oil price off the bottom (but still within shouting distance of recent lows) with Brent changing hands at $36.45 per barrel

• UK public deficit worse in Nov per official numbers. Suggests that, despite cuts, Chancellor Osborne may struggle to hit budget targets. Headline public borrowing rose by c10% in Nov to £14.2bn

• GfK’s UK consumer confidence monitor rose by 1pt to plus two points for December, a shade ahead of estimates of around 1pt

• Eurozone bailout fund yesterday agreed to approve a further €1bn payment to Greece, the 3rd such disbursement

Retail Roundup from Nick Bubb:

Game Digital:
After John Lewis reported yesterday very strong sales of gaming and consoles last week we had just begun to wonder if Game Digital might be a good recovery stock, so we were staggered to see a trading update from Game pop up unexpectedly on the screen at 7am this morning…with a profit warning! A year ago, of course, Game’s profit warning was wrapped up in their Jan 13th update, so the news has come early this year, even though a couple of big trading weeks are yet to come. But Game obviously thought that the writing was on the wall, given the trends for the 21 week period ended 19 December, with UK sales running 11.4% down…The problem seems to be “a faster than expected decline in the market for old format content as well as a slower than anticipated switch to new format content”, compounded by lower year-on-year High Street and shopping centre
footfall.  As result, Game has warned that adjusted EBITDA4 for the 26 weeks ending 23 January 2016 will be only around £30m (vs a weak £43m a year ago). Ouch…

Pets at Home FD Watch:
We missed the announcement made last Thursday that Graeme Jenkins has been appointed as the new CFO at Pets At Home (to replace Ian Kellett, who is being promoted to be the CEO of the Retail Division). The interesting thing about this is that Graeme Jenkins is one of the many Brits who have moved to Australia in recent years to beef up their struggling retail chains: for the last 2 years he has been CFO of the Australian department store business, Target Australia (which is run by the former Sainsbury’s and Asda director Stuart Machin and where the former Tesco clothing boss Richard Jones also now works). Before moving to Oz, Graeme was COO and FD at Virgin Media Business, so it will be interesting to see how he gets on with a pet supplies retailer. In the announcement he gushed “As an engaged dog owner, I have a natural passion for the business and look forward to
joining the team”.

Clinton Cards Con Watch: Walking down Cheapside in the City yesterday morning we saw that Clintons were promoting a “Buy any 3 cards and get the 4th Free” deal, which seemed a good offer, so we quickly selected 4 tasteful Christmas Cards and joined the queue. We were displeased to be then told by the hapless shop assistant that the offer only applied to loyalty card customers…Nick Bubb – nicholas_bubb@hotmail.com

Yesterday’s Tweets:

AB InBev is to take full control of Camden Brewery in a move valuing the latter at around £85m.

Camden crowd-funded earlier in the year at c£75m but then cut the price when a ‘Belgian investor’ took a stake at c£50m.

AB InBev is selling Meantime, leading some to suggest that it appears to be pointing in two directions at once

Looking at the Camden from the other direction, Brewdog has criticised the ‘sell-out’ and will no longer list Camden ales

Camden’s Jasper Cuppaidge says ‘we can’t do this on our own.’ Brewdog delists the group’s beers.

Camden tells shareholders the deal will ‘support the company’s plan to build a second brewery in London, employing 30 more people’

Japanese brewer Kirin pushed into loss by deterioration in Brazil business. Brazilian GDP will contract c3.5% this year, 2.7% next.

Leon is to open a restaurant in Holland next year reports The Telegraph. Group has thus far opened 12 sites this year

Mexican Tequila distiller José Cuervo is said to be planning to invest £60m in its Irish whiskey brand Bushmills

Heineken is to take control of Jamaican lager Red Stripe in the UK from 1 Jan following global deal with Diageo worth cUS$780.5m

UK retail sales grew more slowly than expected in Dec according to the CBI. It says the outlook for early 2016 is not strong

VisitEngland’s Domestic Trip Tracker has said that more Brits will be taking a domestic trip this year than in 2014

Hotels may have to raise prices as a result of the NLW says Best Western following a survey of its hotel owners

Oil prices hit new 12yr lows yesterday before rallying a little. Brent now selling at around $36.55 per barrel

Rental costs could rise more rapidly than house prices over the next 5yrs cautions the RICS, blames fewer units, anti-rental moves by HMG.

Camden takes the King’s shilling, says it’s better for customers, suppliers etc. And shareholders, no doubt.

UK shoppers spent £200m on spirits in first 2wks of Dec (+£7m on last year) reports market researcher IRI.

Nuffield Trust suggests numbers being admitted to hospital for alcohol poisoning doubled in 5yrs. Despite consumption falling.