Langton Capital – 2016-01-05 – Daily Wrap: Christmas trading, Tesco, innovation & other:
Leisure Wrap & Other:
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. As always, contact us if you’d like further details:
• Looks OK but not brilliant.
• A few (smaller, noisier & justifiably pleased-with-themselves) operators have said that LfL sales were in the +5% to +10% range.
• The larger operators have yet to comment.
• The industry should have benefited from the warmer weather.
• To this extent, the on-trade should have exhibited opposite trends to those of the general retailers
• Next this morning produced a chart showing that the warmer-than-average weather in Nov & Dec coincided with a dip in sales whilst the cooler early-Autumn weather boosted them
• London’s pubs saw big pavement crowds in December and, anecdotally, we hear that the temperature (16 degrees) on the winter solstice was the same as that on 21 June
Evolution continues apace.
• See also yesterday’s Wrap.
• Today we have SSP looking to sell booze from more of its fast food outlets and the news that contactless payment transactions have doubled at pubs & restaurants since the limit was raised from £20 to £30 last September
• Any other suggestions (re pervasive or evolutionary change) or comments gratefully received
Terrorism & Travel.
• The two don’t mix.
• Today we comment on the collapse in Paris hotel bookings.
• This, for the moment, is location-specific but, overall, terrorism is bad news as far as travel is concerned
Random information, hopefully not all of it useless:
• Capacity still going on, more King’s Cross units due to open.
• Next saying today that the online market is getting more competitive, ASOS holding up quite well but Ocado at 52wk lows. Interestingly Boohoo (see Nick Bubb comments this morning) has doubled from its recent lows (though it is only back to around half its immediately-post-IPO highs of c70p).
• Marks will update tomorrow. Market has been prepped to expect non-food sales down by as much as 8% (ex-online).
• Bad first day back for the markets yesterday. Bounce today had fizzled out by mid-morning.
• German market (fears of lower exports into China) and UK FTSE100 (miners weak) both down on China issues.
• Of the FTSE100’s top ten performing stocks yesterday, only two actually registered a rise.
• Oil price flat on its back. Gives the odd hiccup but, at $37, it looks out for the count. And that’s with Iran – Saudi issues in the background too.
• Soft commodities mostly week. Soybean meal Price down 27% over last 12mths. Coffee bumping around the bottom but off 32% over the last year. Sugar & Cocoa still outliers on the upside.
• Tesco share price down 5% yesterday (though up a tad today). Puts the shares (at a little over 143p) on c20yr lows. Company worked hard, built a monolith & shareholders poorer than they were two decades ago.
We’re so 21st Century, this morning’s Tweets (diff. font size denotes importance):
1. Xmas trading. So what to say if those that are talking say it was great but most people aren’t talking?
a. Xmas trading. Suggestions that it was late but that it did happen. Consistent with slowing 2015 trend
b. Xmas deemed good but not fantastic. Some bright spots but the best performers may understandably be the noisiest.
2. Soft drinks co Radnor Hills is to almost double capacity to meet demand for healthier alternatives to sugary juice concentrates
3. PwC says storms that caused severe flooding in Britain in Dec could cost £2bn-£2.3bn.
4. Capacity still going on. King’s Cross is to get more premium space for restaurants and bars with the launch of a new canal-side area
5. Contactless spending in pubs has nearly doubled since the limit was increased from £20 to £30 in September, according to Barclaycard
6. SSP has applied for licenses to sell alcohol in its Burger King sites at Victoria, Paddington and Fenchurch Street Stations, writes M&C.
7. Figures from the Bank of England show the amount of money being borrowed by consumers in November rose by £1.5bn to £178.2bn
8. Kuoni confirms takeover approach. Says has ‘received preliminary approaches from 3rd parties regarding a potential offer.’
9. Travel Supermarket has said German holidaymakers are more healthy and active when holidaying abroad
10. Carnival has placed an order for four new cruise ships, two of which will be based in China under its Costa Asia brand.
11. Paris hotels have seen New Year reservations tumble 30% as the impact of the 13 November terrorist attacks continues
12. Las Vegas had record-breaking year 2015 in terms of visitor numbers, attracting more than 42m guests.
13. Bwin updates on FY trading, says Q4 revenues +5% on last year ‘driven by sports betting and casino’. Says it has seen ‘strong growth in mobile driven by further product enhancements.’
a. Bwin says Q4 ‘excluding the impact of EU VAT, the underlying increase in net revenue was 8%.’
b. Bwin confirms recommended offer from GVC expected to complete on 1 February 2016, subject to the prior approval of Gibraltar court
14. UK manufacturing PMI showed growth at slowest rate in 3mths in Dec. PMI recorded 51.9 in Dec from 52.5 in both Nov + Oct
15. World markets. UK, Europe + US followed Far East in registering falls on first full day of 2016 trading. Asia further down in Tues trade
16. Oil up from its lows but down over last 24hrs or so. Trading at around $37.50 per barrel after having hit around $37.20
17. US manufacturing contracted further in Dec with PMI at 48.2 vs 48.6 in Nov. A number < 50.0 implies contraction