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 perhaps it’s the time of year to get out those Bull Sh*t Bingo score cards & see how the various analysts, politicians and corporate spokes people are doing in their day to day communications with us mere mortals.

But what to populate it with, that’s a good question.

Because corporate BS has an evolves at quite a pace and words that would have made it onto the shortlist only a few years ago may be passé now but we’d suggest that a few old staples are still worthy of inclusion I mean take ‘granularity’ for example.

Or ‘ubiquity’ (or its variants) or ‘engaging’ (when incorporating a customer), ‘disruptive’ (in a good way), has ‘provenance’ (well doesn’t everything?) and providing ‘theatre’ (ditto).

But we need some others, suggestions on a postcard. Anyway it’s Christmas. It’s the time of year when, if you were thinking of sending Langton a few dozen bottles of beer, you shouldn’t hold back. On to the news:

The News:

Pub, Restaurant & Drinks Producer News:

• JD Wetherspoon has pulled out of the VAT Club Jacques Borel. Chairman Tim Martin reports ‘Jacques Borel has done an amazing job campaigning for a VAT cut over the past five years.’ He says, however, ‘I have decided that Wetherspoon can no longer support the VAT Club Jacques Borel in its present form and believe there now needs to be an alliance of companies who believe, as I do, that a VAT cut is vital for the future of the hospitality sector.’ There will be no Tax Equality Day in 2016.

• Revolution Bars Group reaches its 60th site tonight with the opening of its latest Revolucion de Cuba bar in Nottingham following £1.7m of investment. Brand manager Clinton Ghent commented: ‘Nottingham has some great bars and restaurants and we’re looking forward to bringing something a little different to the city. This area, in particular, is enjoying a real renaissance and becoming much more stylish and upmarket, and we are excited to be part of this.’

• Camden councillors have voted to introduce a Late Night Levy which will apply between midnight and 6am from late April 2016. Businesses will pay on a sliding scale but there is a 30% discount to premises within BID areas.

• Brasserie Bar Co is to open White Brasserie + Brasserie Blanc outlets in N West after securing two former Loch Fyne sites reports M&C

• ONS reports consumers are spending more on discretionary items (big and small ticket, cars, carpets + pizzas) + less on heating + rent

• Matthews & Goodman has recruited Philip Booth as head of its Licensed, Leisure and Hotels Team.

• Richard Caring tells M+C that he will roll out Ivy Café format to 10 or more sites across the country. He says ‘we’re looking at about 10 sites right now. We’ve got sites in Wimbledon and Bristol, and we’re looking in places like Cobham and Bath and we’ll probably do one or two in the City. We decided the Ivy brand was something that could travel. So we opened The Ivy in the King’s Road, which was an immediate success, and Covent Garden. In Marylebone we’ve got The Ivy Café – which we plan to roll out across the country.’

• UK household consumption rose in 2014 to highest level since before the global credit crunch per ONS data. ONS says spending hit £531.30 per week last year, up 1.4% in real terms on 2013. Spending in the UK peaked at £538.70 in 2007 and hit a recent trough of £507.40 per week in 2012.

Travel & Hotels:

• Full year numbers from Easy Hotel. Says ‘performance in line with Board expectations’, sales +15% at £19.95m.

• Easy Hotel FY numbers: Says PBT +38% at £0.79m, basic EPS 1p (vs 1.2p last year), proposed maiden dividend of 0.33p.

• Easy Hotel FY numbers: Highlights the appointment of new CEO (Guy Parsons) ‘with proven experience in building successful budget hotel chains’. Says it now has 21 easyHotels operating in 14 cities in eight countries with 1,880 rooms (2014: 1,606).

• Easy Hotel FY numbers: Says will open Manchester (subject to completion) and Liverpool in FY17. CEO Guy Parsons comments ‘easyHotel continued to perform in line with Board expectations in 2015, demonstrating the strength of the business model, the brand and demand for simple comfort at super budget prices in great locations.’ He says ‘the scale of opportunity we have in the UK and Europe is larger than was previously thought. Through a mix of owned and franchised hotels and an accelerated pace of openings, I believe that we have the opportunity to establish ourselves as the leading branded super budget hotel chain and create significant value for shareholders and stakeholders.’

• Thomas Cook CEO & CFO Peter Fankhauser & Michael Healy yesterday announced that they had crystallised options over c3.2m shares & sold around 1.5m in order to pay the associated tax. The directors retained the balance.

• Business travel largely unaffected by Paris murders reports GBTA. It says 47% of buyers reported no change + 26% a small reduction in European travel. The GBTA goes on to say ‘the response has been strikingly similar on both sides of the Atlantic.’ He says ‘the vast majority of travel buyers believe that it is important for business travel to continue as usual despite the recent terrorist activity’ but adds ‘this resiliency, however, only heightens the need for businesses, governments and the travel industry to work together to ensure a global travel system that is both safe and secure.’

• Luton Airport’s expansion plans could bring £1bn per annum into the UK economy argues Oxford Economics

• Carlson Wagonlit Travel has said that the average cost of a business trip in the UK fell by 8.5% in Q3 this year.

• Airbnb is reported to be have raised $1.5bn in new funding this year to date. Recent rounds value the business at c$25bn.

Finance & Markets:

• NIESR has suggested that the UK economy grew by 0.6% in the 3mths to Nov, unchanged from growth in period to Oct

• World markets: UK & Europe down yesterday, led by miners, oils. US also lower & Far East down in Weds trading

• Oil price hovering near multi-year lows, trading around $40.90 per barrel

• UK manufacturing output fell by 0.4% in October from the previous month according to ONS data. Reuters quotes David Kern, chief economist at the British Chambers of Commerce, as saying ‘there are still major challenges facing the sector, particularly in the face of worsening global circumstances and the strength of sterling.’

• UK house price rises have slowed per Halifax. It says prices rose by 9% in the year to Nov, down from 9.7% a month earlier. It suggests that excess demand means that prices will continue to rise at a “robust” rate.

Retail Roundup from Nick Bubb:

Footfall Watch: Having flagged yesterday that Online spending momentum probably kept John Lewis sales above water overall last week, despite the unfestive weather and a tough comp, with sales up c2%/2.5% LFL in w/e Dec 5th, the footfall experts Springboard report that UK retail destinations have continued to take a hit from Online shoppers in the aftermath of the Black Friday weekend and Cyber Monday. Retail footfall across the UK over the past week (30th November – 6th December) was down -2.7% on last year, driven by significant falls in High Street and shopping centre activity, although retail parks continued to buck the trend.

House of Fraser Watch:
The strong Q2 update published back on Sept 22nd by House of Fraser noted that, after a “challenging” August, LFL sales growth had slowed sharply in the previous 7 weeks, despite a better September to date. Over the 33 weeks to Sept 18th, LFL sales were up by 5.1%, having been up by 6.5% in the first 26 weeks to Aug 1st (driven by strong Online sales growth) and by our reckoning that meant that LFL sales were flat over the 7 weeks. However, on the Bondholder’s call, the new CEO Nigel Oddy claimed that in August HOF outperformed both John Lewis and BRC-KPMG Non-Food, although as HOF is not much involved in Electricals or Home that is not really a fair comparison. As October wasn’t easy for Fashion retailers, we doubt if today’s Q3 update from HOF (for the 13 weeks to Oct 31st) will show much LFL sales growth and given the warm weather we doubt if
the last 5 weeks will have shown much LFL sales growth either…

Today’s Press and News:
The Times market report highlights that Sainsbury was upgraded by the broker Stifel yesterday, helping it to buck the market downtrend. The Guardian highlights the big loss reported by the Tesco-owned Dobbies Garden Centres and the Business editorial thunders that Tesco has “spent a year going sideways”, in share price terms. CityAM notes that the Xmas TV “sad-vert” by the German supermarket Edeka has been seen by even more people than the Sainsbury and John Lewis Xmas TV ads. And with the further collapse in the oil price leading to hopes that the price of petrol will be down to £1 a litre by Xmas, to create a bit of a “feel-good” factor, the Sun reports that Tesco is changing the message on all its self-service checkout tills from “Thank you for shopping at Tesco” to “Ho ho ho Merry Christmas”!

News Flow This Week: Tomorrow brings the Sports Direct interims, the Darty interims, the Mulberry interims and the Ocado Q4 update. Nick Bubb – nicholas_bubb@hotmail.com

Tuesday Wrap:

This was produced for distribution yesterday afternoon: So the trading day is grinding to a close. We’re another day older but are we any wiser? After a day of intensive head-scratching, pen flipping and gossip, we have been considering the following:

Cheap Euro cuts price of ski holidays:

• The latest Post Office Travel Money report has pointed to lower in-resort ski holidays this year.

• Getting there may still cost – though it should cost less given the fall in oil prices – but the PO reports good deals in Bulgaria (pegged to Euro), Slovenia (Euro), Italy (Euro) and Austria (Euro).

• The same should be true for summer destinations in Spain, Greece and France.

• Whilst such news may be outweighed by concerns re terrorism (Monarch reports today that consumers seem to be booking flights a little nearer to departure than usual) but it should boost underlying outbound holiday demand

• By the by, Air France KLM has today reported its belief that the Fri 13 attacks in Paris last month cost it around €50m in lost revenues. It says it was “significantly impacted” by the attacks. It adds, however, ‘current booking trends are in line with a progressive recovery including a very limited impact on volumes after the end of December 2015’.

Black Friday, good riddance?

• BRC would have it that sales last month were the soggiest in a November for four years

• Part at least of this must have been because Black Friday raised the bar in 2014 and then disappointed in 2015

• This morning Nick Bubb writes ‘given all the hype about how consumers were waiting for Black Friday deals, the outcome of -0.4% LFL for the November BRC-KPMG survey must be considered disappointing.’

• Black Friday does appear to have moved online with online non-food sales +11.8% this November

• However, disaggregating Black Friday from the underlying upward trend in online sales will be difficult if not impossible

• Overall, Langton at least is left with the feeling that Black Friday has distorted rather than increased the level of spending

• This is not particularly helpful and, if margins have been sacrificed in order to drive volumes, then this is doubly the case

Random information, hopefully not all of it useless:

• Vianet has announced that it is to sell the forecourt flow measurement business that it bought in 2010. It says ‘the disposal of VFS will enable Vianet to focus on the core businesses of Leisure and Vending Solutions and consolidate its financial resources.’ Companies should be allowed to change their minds but this kind of begs the question as to why the business was purchased in the first place.

• Admiral’s relative health (see earlier emails) suggests that there are signs of life to be seen across the pub industry. Bodes relatively well for the combed & improved estates owned by Punch and Enterprise

• JD Wetherspoon is reported to have withdrawn from the Jacques Borel VAT Club. It quotes chairman Tim Martin as saying ‘Jacques Borel has done an amazing job campaigning for a VAT cut over the past five years [but] I have decided that Wetherspoon can no longer support the VAT Club JB in its present form and believe there now needs to be an alliance of companies who believe, as I do, that a VAT cut is vital for the future of the hospitality sector.’

• Oil and commodity-heavy indices (i.e. FTSE100 rather than FTSE250) hit by sell-off in underlying oil & commodities concerned. Same old same old.

• Worth mentioning that oil v close to 7yr lows. Price touched $36.19 on 15 Dec 2008. If the oil price were to breach that level, it would be down to 11yr lows.

• Minor moves in £ vs both € and $. Little else to report re currencies. Seeing strong US$ ‘blamed’ for weak oil price was rather revealing (of the fact that nobody knows quite what to hang it on).

• No discernible change to the belief that the US Fed will announce an interest rate rise next Wednesday

• Travel stocks up yesterday on weak oil price. Rather juvenile in that stock markets are meant to discount commodity price movements but it is what it is.

• China imports down a little less than expected. Didn’t do much for commodity prices yesterday, seem to have developed a (downward) momentum all of their own.