Langton Capital – 2015-09-03 – Dart, min. wage, pub trading, world markets & other:
A Day in the Life:Follow us on Twitter at either @langtoncapital or @brumbymark. Langton is not in the office this week but should be able to keep the email going before things get back to normal next week. The Day in the Life might be somewhat sporadic and there will be no Daily Wrap. The News:Pub, Restaurant & Drinks Producer News: • Restaurant and pub operators have continued to benefit the staycation trend, with small and medium sized businesses in the accommodation and food sectors seeing sales rise to their highest point since 2006 this summer. • Growing Thai restaurant chain The Giggling Squid has joined online restaurant delivery service deliveroo on a trial basis. • Gordon Ramsay is opening his second Hong Kong site and first London House site in the area this week. The celebrity chef’s first Hong Kong venture, Bread Street Kitchen, opened last year in Lan Kwai Fong. • Eric Yu of The Breakfast Group, Martin Malley of Planet of the Grapes and Luca Cordiglieri are to open Greek Street Bar 68 and Boston in Soho. The site is divided into an all-day wine bar on the ground floor and a late night lounge bar upstairs. • On-trade beer sales continued to slip in the second quarter of 2015 against tough comparatives. Figures from the BBPA show that Q2 sales of beer in the trade were down 5.6% on the same period last year, although the rate of decline was just 4.9% compared to the off-trade’s 6.2%. On-trade sales were down 2.4% on a rolling 12-month period. • UK food hall growth could be the next major trend in dining as the likes of London Union bring some of the USA’s success to the capital. • Carluccio’s has confirmed it will open a site in Birmingham’s Grand Central development, which opens this month. The restaurant will open alongside a host of other brands on 24 September, including Caffe Concert, Ed’s Easy Diner, Giraffe, Handmade Burger Co, Nando’s, Pho, Tapas Revolution, Tortilla and YO! Sushi. • McDonald’s UK is rolling out table service in an attempt to gain share in the lunchtime-to-go market. Table service is currently available in 15 restaurants but will go nationwide in October. Self-service touch screen ordering points are also being rolled out to reduce queueing, and consumers will have more choice over ingredients. • Poundland is launching its website poundland.co.uk, which will have over 2,000 product lines for a £4 flat delivery fee. Poundland CEO Jim McCarthy said: ‘The online shopping market is a rapidly growing channel and one which could provide a significant potential opportunity for us. This trial is an important first step towards giving more customers access to our amazing value.’ • ONS data shows the number of people on zero-hours contracts has grown to 2.4% of all employees (744,000) from 2% a year ago (624,000). While the controversial contracts are frequently criticised by unions and other opponents for providing volatile incomes and a lack of employment visibility, some argue that they perform a necessary function in the current economy. • The Department for Business commented: ‘Zero-hours contracts have a part to play in a modern, flexible labour market. For workers such as students and those with caring responsibilities they provide a pathway to employment, particularly when the individual cannot commit to regular hours.’ • Business Sec. Sajid Javid says he will ensure “hardworking people receive the pay they are entitled to”, will raise NMW breach penalties. He reports ‘there is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law.’ • Greene King has sold its Sydney Arms pub in London Borough of Kensington for £2.55m. Savills handled the sale • UK supermarket sales volumes fell in August for the first time in 2015 according to data from Nielsen. Volumes were down 0.4%. Nielsen says ‘the disappointing growth figures reflect the continuing unpredictable summer weather as well as the underlying deflation in retail prices.’ • A health study at Florida International Uni. has suggested that parents should talk to their kids about alcohol from age 9 Holidays & Leisure Travel: • Dart updates on Q1, ‘good start to the financial year has continued with strong summer 2015 trading in our Leisure Travel business’. The Jet2.com and jet2holidays.com operator says ‘demand for our package holiday products continues to grow and as a result the number of package holiday customers as a proportion of overall flown customer numbers has increased. The business has also achieved higher airline ticket yields and load factors than in summer 2014. This performance is against a backdrop of slightly lower seat capacity.’ • More from Jet2. The group says ‘early indications for winter 15/16 Leisure Travel bookings are satisfactory’ and adds ‘our Distribution & Logistics business, is currently trading ahead of last year as it continues to focus on growing its revenue pipeline and delivering operational efficiency improvements.’ The operator says ‘in view of the continued strong demand for our Leisure Travel package holiday and flight-only products, the Board is optimistic that Group performance for the financial year ending 31 March 2016 will materially exceed current market expectations.’ • Conclusion re Jet2. The group says it will update further in mid-Oct at its H1 numbers and says ‘the Company has entered into an agreement with Boeing to purchase 27 new Boeing 737-800NG aircraft. These aircraft will be delivered between September 2016 and April 2018.’ The group is clearly going places. • The number of small UK accommodation and food service businesses has grown by 17% since 2009, according to Barclays research. The staycation remains a tempting alternative for value-seeking holidaymakers, with 77% of British adults asked saying they have been on or are planning a domestic holiday. • The FCO has warned of a ‘high threat’ to British travellers entering Morocco and has updated its travel advice. The Foreign and Commonwealth Office’s advice now states that ‘Attacks could be indiscriminate, including in places visited by foreigners.’ • Electra-backed Park Resorts is to merge with rival Parkdean Holidays, currently owned by Alchemy, to create a £1bn company • Accor is to launch its own restaurant concept, Jamboree, at its Novotel site in London’s Blackfriars Other Leisure: • Lego has reported a jump in first-half sales and profits with revenues +23% on the back of movie memorabilia etc. Finance & Markets: • Citigroup has signed up to a consortium led by Goldman Sachs in an attempt to acquire some £13bn of British mortgage assets. • World markets: UK + Europe up yesterday, US higher + Far East up in early Thursday trading • Oil price up a little over last 24hrs to c$50.30 per barrel Leisure – The Week AheadJD Wetherspoon has Finals on the Friday the 11th next week. The group has already guided that profit before tax for FY2015 is unlikely to be higher than last year. In retail, Dunelm has its finals on Thursday 10th, with Next’s interims and a trading update from Home Retail Group also both on the 10th. Big ticket spend has been strong recently as the consumer recovers from the last recession and Sainsbury’s previously having suggested that there is something of a six month lag between big ticket and small ticket upticks, which would be good for leisure and small ticket retail. Goals Soccer Centres updates on its Q3 trading on Wednesday the 9th. The group’s sales for the first half of the year were hit by adverse weather conditions, however sales were up 20% at the group’s Californian site. The group is currently working on a second site in the LA area. The group operates 46 sites in the UK and one in the US. UK retail data is also out next week in the form of the BRC’s Sales Monitor and Shop Price Index index coming out on Tuesday and Wednesday respectively. The BoE Interest Rate Decision is on Thursday. The Restaurant Group, PPHE Hotels, Bwin, Betfair, Dart Group and Rank Group are all going ex-dividend on Thursday. Will Brumby – will.brumby@langtoncapital.co.uk Retail Roundup from Nick Bubb:Booker: We were wondering why the Booker share price jumped nearly 7% yesterday, but things start to fall into place after this morning’s news that the Competition and Markets Authority (CMA) has cleared the planned acquisition of Londis and Budgens…Booker has also brought forward its September trading update, for the 10 weeks to 28 August, and, although tobacco sales have taken a pounding, non-tobacco sales are up a bit and management say that profits are on track. Bookers’ convenience store rival McColl’s has also put out a solid trading update this morning and, to complete the circle, tomorrow is the deadline for the Conviviality Retail bid for Matthew Clark
FTSE Index Watch: Nick Bubb – nicholas_bubb@hotmail.com |
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