Langton Capital – 09-08-19 – Pub Co Consolidation, On The Beach, William Hill & Other:
Pub Co Consolidation, On The Beach, William Hill & Other:
A DAY IN THE LIFE:
As we headed back into Northern Italy from Slovenia, it occurred to me that I haven’t bought a physical, paper map for quite a few years suggesting that that industry may be one more that the Internet has managed to disrupt.
But there’s very little we can do about that one way or the other and it was quickly necessary to put such thoughts to one side because, as we tried to stop off in Trieste, we were immediately engulfed by irate scooter riders shooting past to our left and our right and there was little time to consider the plight of others as we had our own life and limbs to protect.
However, we managed to carve up a few two wheelers with the best of them, trade a few words in Italian with other drivers concerning bodily functions and parentage and find a parking space. Not bad for a beginner. We then watched the cormorants fishing in the canal feeding into the Adriatic, popped down to the Piazza Unita d’Italia for a poke around and ordered lunch from an authentically surly waiter in the Piazza della Borsa.
And then it was back in the car and over to Padua (or Padova, apparently) to meet up with Primo (‘cash please, is much more simple’) in order to secure the keys for a flat on the edge of the Piazza Della Valle, which is a pretty impressive site. It’s the largest square in the world or in Italy or in Padova, depending on how well I understood Primo but it was too hot to do much other than stock up on beer and water, cluster around the air-conditioning vents in the flat and watch the sheet lightening flashing around the horizon.
More over the weekend but, as mentioned, elements of Langton are on holiday at the moment. Back properly Tuesday but, for the moment, the email could be a little shorter than usual. On to the news:
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GENERAL NEWS – PUBS & RESTAURANTS:
The chief executive of the Campaign for Real Ale, Tom Stainer has told The Morning Advertiser that further consolidation within the pub and brewery sector is likely. Stainer said: ‘You always see these cycles of expansion and contraction where you suddenly get an explosion of smaller operators and it seems natural the bigger operators will respond to that by making acquisitions. We have seen a trend recently of big, national or even international brewers starting to buy up smaller breweries, maybe that comes with established craft credentials as a response to the development of the beer market’.
Nestlé has launched three plant-based frothy coffees in the UK that have been certified by The Vegan Society.
UN experts have stated that moving to a plant-based diet can help fight climate change. Prof Pete Smith, an environmental scientist at Aberdeen University commented: ‘We’re not telling people to stop eating meat. In some places, people have no other choice. But it’s obvious that in the West we’re eating far too much,” said Prof Pete Smith, an environmental scientist from Aberdeen University, UK’.
Majestic Wine PLC has announced it will change its name to Naked Wines Plc, effective before the end of August 2019.
The MCA’s UK Eating Out Market report has found that the sector grew 1.9% to £91bn in 2019. This is the slowest growth rate for the sector for seven years, however, it is expected that the rate will recover modestly over the next three years.
Greene King reportedly paid departing chief executive Rooney Anand £850k to prevent him from taking positions at the company’s rivals or offering jobs to key staff.
Wendy’s has seen systemwide sales increase by 3.3% to $2.8bn during Q2 2019. Chief Executive Officer Todd Penegor commented: ‘We delivered another quarter of strong earnings growth and are pleased with our continued progress to build an even stronger foundation for the Wendy’s brand’.
Domino’s has invested £7m into stockpiling its ingredients in order to prepare for a no-deal Brexit.
HOLIDAYS & LEISURE TRAVEL:
On the Beach has reported that it ‘anticipates delivering a full year performance below the Board’s expectations’, due to unfavourable currency changes. Simon Cooper, Chief Executive of On the Beach Group plc, commented: ‘In what is a difficult general economic climate, we remain confident in the resilience and flexibility of our business model, focusing on profitable growth and an ability to capitalise on any structural changes in the market’.
UK train companies are now set to remain part of the Interrail scheme, after The Rail Delivery Group said it had reached an arrangement with Eurail Group.
The IT glitch that caused thousands of BA passengers to be stranded on Wednesday is likely to have knock on effects for flights in the following days. BA commented: ‘We have resolved yesterday’s temporary systems issue, which affected a number of our flights. We are planning to operate our normal flying schedule today, however there may be some knock-on disruption to flights as a result of yesterday’s issue’.
The US hotel industry reported occupancy down 0.8% to 74.8% during the week ending 3 August, with average daily rate falling 0.3% to $133.03 and RevPAR declining 1.1% to $99.45.
William Hill has reported H1 2019 net revenue up 1% to £811.7m with adjusted profits down 33% to £76.2m, reflecting the £2 stake limit and investment in US Expansion. Philip Bowcock, Chief Executive Officer commented: ‘We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth’.
START THE DAY WITH A SONG:
Yesterday’s song was Always the Sun by The Stranglers. Today who sang:
Cause blood runs thicker, oh,
We’re thick as thieves, you know
If it’s important to you
It’s important to me
RETAIL WITH NICK BUBB:
News Flow Next Week: Tuesday brings the Card Factory pre-close update and the Cambridge-based Marshall Motor interims. On Wednesday we get the interims from another Motor dealer, the Manchester-based Lookers. Thursday brings the ONS Retail Sales figures for July and the Wal-Mart/Asda Q2 and then on Friday we get the Watches of Switzerland Q1 update.
BDO High Street Sales Tracker: We flagged on Wednesday that the John Lewis sales figures for last week were weak, but today’s BDO High Street Sales Tracker for medium-sized Non-Food chains continues to report surprisingly good progress, despite the collapse of chains like Karen Millen/Coast. In w/e Sunday Aug 4th, BDO Fashion sales were up by 5.5% LFL (including Online), the twelfth consecutive week of growth…And total BDO LFL sales (including Homewares and Lifestyle sales) were up by 4.5% last week (up by 0.2% in Store sales and up by 12.6% in Online sales).
Trade Press: Retail Week magazine has not been published this week, but Drapers magazine is out today and the big news is that the Editor, Keely Stocker, is off to join Fat Face as Comms Director. In her penultimate column she notes that the magazine celebrated its 132nd anniversary this week and thunders that, despite the collapse of Jack Wills, “The high street still has a lot to be proud of”. In terms of News stories, Drapers highlight that Karen Millen has joined the Boohoo stable of brands, industry insiders have questioned Mike Ashley’s long-term strategy after hoovering up the bankrupt Jack Wills chain and Debenhams is to launch two new own-brand women’s labels this autumn. In terms of features, Drapers look at other big fashion names celebrating birthdays this year (including Barbour and New Look), look at some new kidswear brands and, following the news that Mothercare is to try