Langton Capital – 2016-04-04 – Fulham Shore, Enterprise Inns, Just Eat & other:
A Day in the Life:
So having got back from holiday late Saturday, I would appear to have a week’s worth of work to catch up on.
Notwithstanding the fact that we kept things ticking over while we were away, the volume of incoming emails, admittedly heavily-sprinkled with ‘out-of-office’ responses is somewhat daunting and there’s nobody within shouting distance to blame.
The dog has wisely made himself scarce and despite repeatedly telling myself that a journey of a thousand miles begins with one step, I think I might leave the backlog of work to mature on the vine for a while.
It seems only fair but, changing the subject slightly, thanks to those who fed back their constructive views on the structure of the email a few weeks ago.
As a result of comments made we’ve made the active decision not to change a great deal. We’ll keep the first email as it is but evolve the second daily effort into a longer, ad-hoc (probably weekly) note and put it onto the website with links & reminders from time to time. On to the news:
PUB, RESTAURANT & DRINKS PRODUCER NEWS:
• Fulham Shore updates on trading for full year, says results will be ‘in line with market expectations.’
• Fulham shore says since Dec it has opened an additional Franco Manca site in Stoke Newington and a Bukowski Grill franchise restaurant in Soho. It says as a result, openings in the full year to end-March comprise 1 Real Greek, 7 Franco Mancas and 1 Bukowski Grill.
• Fulham shore estate now comprises 9 Real Greeks, 19 Franco Mancas and 1 Bukowski Grill. Group says ‘Fulham Shore is on site and planning to open a further 4 Franco Manca restaurants in time for Summer 2016, including the first 2 Franco Manca pizzeria outside of London, in Guildford and Brighton. The Company continues to build its pipeline of new restaurant openings and to review further investment opportunities.’ Fulham shore adds ‘the Company has implemented the Government’s National Living Wage for all employees, including those under 25 years old. This has been fully budgeted for in the Company’s growth plans.’
• Avenue Capital-backed pub operator Hawthorn Leisure has acquired 11 pubs from JD Wetherspoon, taking the group’s estate to c61 managed sites. The purchase of the sites, largely in town centres, marks the group’s fourth acquisition since June 2014 ‘and provides additional scale to Hawthorn Leisure’s operation by adding to the existing 50 managed/franchise pubs.’ CEO Gerry Carroll comments ‘we are delighted to welcome these eleven pubs and their management and staff to Hawthorn Leisure.’ He adds ‘this is another exciting development for our group, as we continue to invest in developing our high quality estate of pubs across the UK. In the past year, we have made fantastic progress in further building our team and operational capabilities, both in leased / tenanted and managed pubs, and we look forward to continuing this trajectory of
• Pret has bumped up the prices of its coffee by 10p to help fund the cost of the new national living wage requirements. The price of a Latte, Cappuccino and a Flat White has moved from £2.15 to £2.25, while the cost of an Americano rises from £1.75 to £1.85.
• Grocery prices have fallen for the fourth month in a row as supermarkets continue to compete on value, according to data from mySupermarket.co.uk. The website found that a basket of 35 popular products cost £84.36 in March, compared to £87.70 in the same month a year earlier.
• Just Eat announces completion of deal to buy La Nevera Roja in Spain should close within the next few business days. It says ‘the acquisition of La Nevera Roja is highly complementary to JUST EAT’s Spanish businesses. It will bring additional scale, focus, and new talent to our existing operations and will enable the company to offer an enlarged customer base for takeaway restaurants, as well as greater choice for consumers.’
• Just Eat adds ‘the transaction creates clear market leadership in Spain, with the compelling economic benefits of scale that lead, in time, to material synergies and meaningfully higher sustainable margins.’ CEO David Buttress adds ‘this acquisition, along with the acquisitions in Italy, Mexico and Brazil consolidate our market leadership in a number of geographies where the digital marketplace for takeaway food delivery is growing strongly. We look forward to using our increased volume and scale to drive value for our shareholders and restaurant partners, as well as improving the takeaway experience for consumers.’ He concludes ‘the integration process is proceeding according to plan in those markets where the acquisitions have already closed. In Spain, we look forward to welcoming La Nevera Roja to the JUST EAT family.’
• Brewhouse & Kitchen to open 10th site this months. Says should add 5 more in next 6mths. MD Simon Bunn says re the latest site ‘acquiring the Malt & Hops has been a fantastic edition to the Brewhouse & Kitchen estate and has been warmly welcomed by local residents and supporters.’ Chairman Kris Gumbrell adds ‘our brand is going from strength, but we remain focused on creating a unique pub experience and strong returns for investors’.
• Enterprise Inns announces further buyback of stokc. Bought back 40,439 on Friday at between 95.25p and 97p
• The Scottish Beer & Pub Association has called for the creation of a new role of Pubs Minister in the new Scottish government.
• Private equity firm CBGE is in the hunt for a slice of Pizza Hut’s UK operations, although it faces competition from Electra Partners.
• Starbucks is now selling wine and beer in Japan.
• An extra one million British people will take domestic holidays this year amid rising fears of terrorism abroad, according to a new study from QHotels.
• Northern cities including Manchester, Leeds, York, Chester, and Liverpool are set to be the engine of growth for the UK hotel industry in the coming years, writes Colliers International.
• Chinese group Anbang has withdrawn from the race to acquire Starwood Hotels, leaving the path clear for Marriott to complete its bid.
• Turkey and Goa specialist Jewel in the Crown Holidays has ceased trading and gone into liquidation.
• Hurtigruten is looking to become the number one expedition company for the UK market within five years.
FINANCE & MARKETS:
• House prices in the north of England are now less than half of those in the south of the country according to Nationwide, marking a new low.
• The US economy added 215,000 jobs in March compared to 242,000 in February, although the Labor Department says that more Americans are finding jobs.
• Greece is to resume talks aimed at securing a third bailout with its lenders. Claims that the latter were steering the former towards default were described as nonsense by IMF boss Christine Lagarde. She has said ‘the IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks.’
• UK & European markets lower on Friday. US up in later trading & Far East mostly higher in Monday trade
• Oil price lower at around $38.35 per barrel
Retail Roundup from Nick Bubb:
Grocer Watch: The widely followed Grocer “33” weekly supermarket pricing survey in Saturday’s magazine was won convincingly by Asda again: the £55.58 Asda basket was £3.17 cheaper than nearest rival Morrisons. The Waitrose basket of £64.48 was much closer to the mark than usual…The separate Grocer “Mystery Shopper” weekly survey on Store Service and Availability (which focused on self-checkouts this week) was won by Sainsbury, as its 25,000 sq ft supermarket in Redhill (which is currently being extended) topped the rankings, albeit with a relatively modest score of 71 out of 100 (Waitrose came bottom yet again, as their Willerby store in Yorkshire, got a score of just 51, getting 0 out 20 for stock availability).
Next Share Buyback Watch: “Mr Share Buyback Man” was in action again on Friday, picking up another c£5m worth of Next stock (c91,000 shares at an average price of 5473p), to take last week’s activity to £15m in total, and, for once, he managed to buy in a rising market, with the shares edging up, to close the week at 5445p.
This Week’s News: As we move into April, the highlight of this week is the much-awaited Marks & Spencer Q4 trading update on Thursday, but before that tomorrow brings the Card Factory and Moss Bros finals, together with the latest monthly Kantar and Nielsen grocery market share data. On Wednesday we get the Topps Tiles pre-close update and Thursday also brings the Dunelm Q3 trading update.
Sunday Press: The Sunday papers look to be full of stuff about the UK steel industry crisis and Brexit etc, but the breaking news seems to be the story, as reported by the FT website, that the embattled Mike Ashley (whose Newcastle is still firmly in the relegation zone, after losing 3-2 yesterday to fellow Premiership strugglers Norwich) has been ordered by a High Court judge to hand over private text messages to lawyers acting for his former Sports Direct adviser Jeff Blue, who is suing him for £14m…In other news, the Mail on Sunday flags that Marks & Spencer is set to join Fashion rivals in declaring a sales washout for the first three months of this year (with General Merchandise sales in at M&S expected to fall by as much as 3% LFL in the three months to end March and Food sales expected to be flat LFL).
Today’s Press and News: The front page headline in the FT is “Fears mount in currency markets as EU referendum approaches”, whilst the Guardian has an interesting front page expose on the trail of bribery and corruption behind one Vladimir Putin…but otherwise the main focus is on previews of the M&S trading update on Thursday. Nick Bubb – email@example.com