Langton Capital – 06-08-2019 – Marriott, RBI, Heathrow, Other
Marriott, RBI, Heathrow, Other:
A DAY IN THE LIFE:
So, we popped over to the Slovakian capital Bratislava from Vienna yesterday and, whilst it all went pretty smoothly, it did reinforce a few home truths.
First, it’s a good idea to get a ball-park figure from a cabbie before agreeing to a journey. Particularly at airports or train stations when you’re obviously not a local and you look a bit thick and second, if a Euro is costing you 99.8p and you’re paying €5.90 for a lemonade, your cash is more likely to run out sooner than later. Indeed the latter consideration brought out our inner-Yorkshire as we took a city-tour brochure from a tout and then walked the route whilst reading his notes.
And on a different topic, it’s worth remembering that driving on motorways in Austria without a vignette, buying the wrong class of ticket for your train journey and getting on busses in Bratislava without paying at the machine attached to the bus-stop can all lead to hefty fines and, whilst we accidentally got away with all of the above, it isn’t big and it isn’t clever. It’s akin to surviving a stroll through a firework factory with a lighted candle in that it’s more down to good luck than good judgement.
Anyway, as previously mentioned, elements of Langton are on holiday this week. We’re moving on to Slovenia now before heading back into Italy and the email could be a little bit shorter than usual. On to the news:
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GENERAL NEWS – PUBS & RESTAURANTS:
Pragma consulting has that the UK eating habits are changing with more people than ever choosing to dine in food courts as opposed to branded chain restaurants. Pragma has highlighted the improved food diversity for the reason for this change in habits.
BigHospitality has reported that Boxpark is lining up two new ventures, Boxoffice and Boxhall. Boxoffice will be a means of diversifying income streams, providing a four-to-six floor operations that also promise cinemas, crazy golf, and karaoke.
Tom Kerridge is to host a new show on BBC Two that will highlight the plight of struggling pubs in the UK.
McDonald’s has announced that its paper straws can as of yet not be recycled and should be disposed of in the general waste. A McDonald’s spokesman said: ‘As a result of customer feedback, we have strengthened our paper straws, so while the materials are recyclable, their current thickness makes it difficult for them to be processed by our waste solution providers, who also help us recycle our paper cups’.
Restaurant Brands International, the parent company to Burger King, has seen its sales increase nearly 8% in Q2 2019 results. Jose Cil, Chief Executive Officer stated: ‘During the second quarter, we grew global system-wide sales nearly 8% and crossed two restaurant milestones with more than 26,000 restaurants globally, including more than 18,000 Burger King restaurants’.
Domino’s Pizza Group has seen its system sales increase 4.7% to £645.8m during H1 2019, with LfL sales up 3.9%. During the reporting period the group opened 13 stores, of which 7 were in the UK, taking the Group total to 1,272.
Chief Executive Officer of Domino’s Pizza Group, David Wild said: ‘Our core UK and Republic of Ireland markets delivered a good performance, with system sales up 5.5% and underlying operating profit up 7.1%. Digital remains a key driver of customer engagement, with online now accounting for 82% of total sales in the UK. Although a small part of our business, we are delivering pleasing operational improvements in our London corporate store estate’.
Further woe for the British highstreet as Tesco has stated it will cut 4,500 jobs from its Metro stores. Tesco boss Jason Tarry commented: ‘In a challenging, evolving retail environment, with increasing cost pressures, we have to continue to review the way we run our stores to ensure we reflect the way our customers are shopping and do so in the most efficient way’.
HOLIDAYS & LEISURE TRAVEL:
Marriott International saw it’s systemwide RevPAR increased by 1.2%, however, the group’s EPS for Q2 2019 fell to $0.69 from $1.87 during the same time period last year. Arne M. Sorenson, president and chief executive officer of Marriott International, said: ‘Our results in the second quarter highlight the resiliency of our business model and the growing strength of our brands. Year-to-date through August 2, we have already returned $1.9 billion to shareholders. For full year 2019, we expect cash returned to shareholders through share repurchases and dividends could approach $3 billion’.
Commenting on the trading outlook for Marriott International, the group reported: ‘The company anticipates full year 2019 diluted EPS could total $5.97 to $6.06, a 2 to 4 percent decline compared to 2018 adjusted diluted EPS of $6.21’.
The union Unite has called off its planned strike action today after the union and Heathrow airport reached a deal over pay. A spokesman for Heathrow said: ‘We regret that passengers have been inconvenienced by this and urge them to contact their airline for up to date information on the status of their service’.
Stelios Haji-Ioannou, the founder of the easy group has commented that he thinks the 95p per share bid for EasyHotel is too low. The 95p offer values the company at £139m and is a 30% premium to the market cap of the shares prior to offer.
START THE DAY WITH A SONG:
Yesterday’s song was Wild Thing by the Troggs, today who sang:
I will drive past your house
And if the lights are all down
I’ll see who’s around
RETAIL WITH NICK BUBB:
Boohoo: The Online fashion giant Boohoo has confirmed the Sky News scoop that it is interested in the struggling fashion chains Karen Millen and Coast, but it has made clear that it has only made an offer for the Online business and the brands, ie it is not rushing into “bricks and mortar”. That begs the question of what would happen to the shops and the “click and collect” model, so there can be no guarantee that the bid will succeed, but management are to be applauded for trying to diversify into brands targeted at an older age group of customers.
BRC Retail Sales for July (the 4 weeks to July 27Th): We flagged yesterday that another tough month for Food Retailers was likely to depress the overall outcome of the latest BRC Retail Sales survey (which is still the most reliable guide to High Street trends), but the July outcome was actually up a tad LFL, despite the tough comps, helped by the much warmer weather at the end of the month. The exact Food/Non-Food LFL sales split for July is, as usual, buried in the 3-month moving averages of -1.0% and -2.0% respectively, but it looks like Food was only about 0.5% down LFL in July and that means that Non-Food must have been c0.5% up LFL last month. The soft comps helped trading in Furniture, Homewares and Appliances, whilst the late heatwave released some pent up demand in Clothing. The separate Online Non-Food sales survey doesn’t include the likes of Amazon and so it must understate
News Flow This Week: The Pendragon interims should be out soon and the Majestic Wine AGM is on Thursday, whilst Friday is the anniversary of the disastrous Sports Direct acquisition of House of Fraser out of administration last year.