Langton Capital – 2016-0-30 – UK pubs, Restaurant Group, corporate actions & other:
A Day in the Life:
So it was a mixed weekend for City of Culture Hull’s football teams.
Hull RLFC (the oval ball, 13-men) put to rest a bit of a Wembley bug-bear when they beat Warrington to lift the Challenge Cup but the Mighty Hull City failed to hold Manchester United at the KC and were robbed by a 92nd minute goal having thrashed the £1bn plus team of eleven global superstars nil-nil until that time.
But there was some consolation to be had. On the showing of the first 3 games, admittedly a somewhat small sample, we’re not quite as nailed on to finish 20th in the top flight as some pre-season pundits would have had us believe. There must be three teams worse than us…
And, given that our whole team costs somewhat less than the bottom 12” of Pogba’s left leg, we didn’t do too badly in Saturday’s sodden mud-bath.
Anyway, that’s enough football. On to the news:
PUB, RESTAURANT & DRINKS PRODUCERS:
• Restaurant Group has reiterated that falling LfL sales at its Frankie & Benny’s operation were largely due to ‘own-goals’ linked to menu decisions and pricing rather than to an upsurge in competition.
• The Government has agreed to reduce the recommended level of alcohol consumption to just 14 units a year for both men and women. England’s chief medical officer, Dame Sally Davies, released a report in January claiming that there is ‘no safe level of drinking’ and the Government is now formally accepting this report’s guidelines.
• ALMR chief executive Kate Nicholls was ‘encouraged’ by the new guidelines and wants to ‘foster a “grown up” outlook towards alcohol’.
• Advisors on the AB InBev / SAB Miller merger may rake in fees of up to $1.5bn reports The Times
• Sales & IPOs:
o Sunday Times reports Be at One could be for sale for up to £60m.
o S Times reports Hollywood Bowl could list for around £280m. Marketing materials were sent out to fund managers last week.
o S Times also suggests caravan park operator Parkdean may be set to change hands
• Guinness is launching its new Rye Pale Ale (ABV 5%) into the off-trade in September as part of its Brewers Project range.
• Gordon’s the gin brand is rolling out its first package redesign in 70 years to the off-trade this September.
• Sandwich bar / café chain Temptations has launched a campaign to raise £600k on crowd funding platform Seedrs. The raise values the two unit business on a pre-new money basis at around £1.8m.
• A number of bar, restaurant & pub chains have launched appeals to help victims of the Italian Amatrice earthquake. Oakman Inns & Restaurants reports it ‘has decided to raise funds to help the Italian relief effort. As a result, every one of its seventeen-strong collection will be donating the full net price of every pizza or pasta dish they sell for three days from Tuesday 30th August to Thursday 1st September.’ Separately Carluccio’s & Jamie’s Italian have set up fund-raising campaigns. Antonio Carluccio reports ‘every donation can make a difference to the earthquake victims and rescuers.’
• A new survey further illustrates an increasing demand for healthy eating, with 47% of millennials saying they have moved towards a healthier diet over the past year. When it comes to the next year, according to PwC, 51% millennials expect to eat more healthily, along with 36% of 35-54-year-olds and 19% of over-55s. The study found that increasing coverage of healthy eating across social media is helping to drive the shift in appetite.
• Chop’d managing director Eddie Holmes has told MCA the salad concept is looking to expand more into the regions, following the opening of Manchester’s Cross Street last Monday. The site opening pipeline now includes a mixture of regional launches and openings in the capital, with the next unit to be opened in Leeds this October.
• Three men have been charged with fraud for conspiring with others to sell horsemeat as beef in London.
• The BBPA says the recent announcement of more funding and a tourism action plan is a good thing for pubs, ‘which are third on the list of things to do for overseas visitors to Britain’. CEO Brigid Simmonds commented: ‘Local pubs can look forward to working with the recipients of the Discover England Fund and I very much welcome the Prime Minister’s support for tourism.’
• Tesco is offloading its Euphorium bakeries to coffee shop firm Soho Coffee as part of the food retailer’s turnaround ambitions. The brand joins a list of Tesco’s sold assets including Giraffe, Harris + Hoole coffee shops, and Dobbies Garden Centres.
• Food and Drink Federation’s last set of pre-Brexit figures show the UK’s branded food and non-alcoholic drinks exports rose to £2.4bn in the first half of the year. Branded exports to non-EU markets rose by £93.7m (14%) on last year, while exports to EU countries grew by 2.9%, or £47.5m. Exports to non-EU nations now represent 31.4% of all branded exports, up 2.2% year-on-year. With the price of the pound falling further since the end of June, FDF anticipates a further rise in exports before the end of the year.
• A survey of 2,042 people aged 18 to 24 indicates more than a third of young people have debts of almost £3,000 and have significant concerns about money. The study, conducted for the Money Advice Trust by YouGov, calculated the average debt of the age group (excluding student loans and mortgages) to be £2,989, while the average student loan balance is £25,505.
• Mondelez has abandoned its pursuit of Hershey after its suggested offer of $115 and Hershey’s preferred starting bid of $125 proved too expensive. Monday’s decision sent Hershey’s stock down 11.2% to $99.20.
• UK pubs. NB – Langton, overall, loves pubs. However, a radical thought. In the light of Langton’s selfless visits to the Lake District, the Western Dales and the North York Moors over the last week or so, which included perhaps 8-10 pub lunches, evening meals and sundry (wet-led and dog-laden) visits to beer gardens, might it not be that some pubs struggle not solely because of the weather, the smoking ban, off-trade competition or the recession, but because they are simply not terribly well run?
o Such a suggestion may raise hackles.
o And it is certainly true that the least good pubs have (or/and perhaps should have) gone to the wall.
o And accepted many, perhaps most, publicans work extremely hard.
o But there’s little economic advantage in an age of competition etc. for stopping ‘breakfasts’ at 10am, 11am or whenever (what, have you run out of bacon?) or for having dirty or weed or cigarette strewn beer gardens with a good view of the bins but no flowers or what have you.
o And put a smile on it, for heaven’s sake.
o Caveats. The above isn’t the norm. perhaps it was in the 70s but it isn’t now. And, what problems there are tend to be with leased and tenanted rather than managed units.
o Overall, see the first line. Langton loves pubs. But sometimes, they have to love themselves.
LEISURE TRAVEL & HOTELS:
• VisitBritain has declared the first phase of the £40m Discover England fund ‘hugely successful’ and is already preparing for round two, which sees the fund open from 2017-2019. The Government’s Tourism Action Plan should provide further momentum to the UK’s tourism industry, which last year generated record levels of both inbound (£22.1bn) and domestic tourism spending (£19.6bn).
• Shares in Caesars Entertainment fell 16% yesterday after a US judge paved the way for bondholders to launch a number of suits against the company. The group denies any wrong-doing. A group subsidiary filed for bankruptcy last year.
FINANCE & MARKETS:
• The NIESR has suggested that a reasonable GDP performance in Q2 to end-July was largely down to a strong April. Re the 23 June Brexit vote, the NIESR says that there is little hard evidence as to the outturn at present. However, it reports ‘on balance, we think the data indicates a deterioration in economic performance, but it will be some time before the ‘hard’ or official data are published.’
• NIESR expects economy to slow to around 1% growth in 2017 from 1.7% in 2016.
• NIESR says ‘we estimate the probability of a recession…occurring sometime before the end of 2017 to be around 50%’.
• NIESR says data points to a fall in GDP in Q3.
• A YouGov/CEBR poll has suggested that consumer confidence picked up in August after falling in the wake of 23 June vote. It says ‘this month’s improvement in consumer confidence follows positive news from other areas of the economy and slightly punctures the arguments of those who predicted immediate economic Armageddon following a Brexit vote’. However, it goes on to say ‘this could easily change next year as the weakness of sterling pushes up the cost of imports. 2017 could be the year that consumers stumble.’
• Analysis firm Springboard has suggested that the number of shoppers out spending over the Bank Holiday Sat & Sun was down 4.1% y-o-y
• German trade association BGA has cut its estimate for 2016 exports, cites Brexit as a key risk.
• Fed Chair Janet Yellen has said that the case for a rate increase had grown stronger in recent weeks.
• German finance minister Wolfgang Shaeuble has reiterated his view that low ECB rates are doing more harm than good. He says ‘in the long run, the consequences of low interest rates or even negative interest rates are harmful, such as for retirement provisions.’
RETAIL NEWS WITH NICK BUBB:
• Saturday Press: The closure of the last 22 BHS stores at the weekend dominated the weekend press, beginning with the Telegraph, Times and Guardian on Saturday, but the FT came up with a different BHS angle, giving front page billing to the story that a BHS pension deal is taking shape with the Pensions Regulator, with Philip Green set to pay under half the shortfall. The FT flagged separately that the TV presenter Jeff Randall tried, unsuccessfully, to broker a deal between MP Frank Field and Philip Green over the BHS pension deficit at the end of May. The Daily Mail front page story was headlined “BHS: Now make Lady Shifty pay”, flagging that the Pensions Regulator could issue Philip’s wife, Tina Green, with a ‘contribution notice’ which could force her to bail out the pension scheme if her embattled husband fails to do so. The Business editorial in the Times noted
• Sunday Press: The closure of the last 22 BHS stores continued to fill many column inches in the Sunday papers, with the Observer taking a detailed look at the future of the sites, with deals agreed on only about a quarter of the closed stores so far. The Observer also reported that the disgraced former BHS owner Dominic Chappell is set to put his personal business into administration this week, to help him to walk away from a “substantial” tax bill and protect his cash from investigations into the collapse of BHS…In other news, the Mail on Sunday flagged that investors in Sports Direct are poised to invoke new Financial Conduct Authority rules for the first time in an attempt to unseat the hapless Chairman Keith Hellawell as part of an unprecedented revolt planned for the AGM. The Sunday Telegraph had a big feature on why so few leading retailers are headed by women
• Bank Holiday Monday Press: The closure of the last 22 BHS stores continued to provide a rich vein of stories in today’s papers, with the Guardian featuring some vox pop from shoppers at the Wood Green store. The Guardian also reported that the new Qatari owner of BHS’s International and Online business is considering opening new upmarket BHS branches in the UK after buying the brand. The Telegraph flagged that efforts to resolve the BHS pension hole could take months, as Philip Green wants the Pensions Regulator to drop its anti-avoidance investigation into his ownership of BHS before he settles a deal, whilst the Daily Mail front page article on the same subject was headlined “Sir Shifty bids to “blackmail watchdog”” and inside the paper there were more photos of his superyacht, which has now reached Capri in Italy on its extended tour (“As
• News Flow This Week: After the Bank Holiday weekend, things remain quiet, but Wednesday is the last day of dealings in Home Retail, for what it’s worth (with the Sainsbury/Argos deal completing on Friday), whilst the much-awaited monthly GFK Consumer Confidence survey is out first thing on Wednesday, the latest quarterly FT Actuaries index review is announced Wednesday evening and McColl’s have an IMS update on Thursday.