Langton Capital – 2016-05-23 – Thomas Cook, eating habits, Stock Spirits & other:
A Day in the Life:
I think that you should think hard before you start a job that could get bigger and bigger the more you work at it.
Because it’s meant to get smaller, isn’t it? You’re meant to achieve something & effectively tick it off leaving the remaining task diminished but that’s not how it seems to work chez nous, especially when the task involved has anything to do with the garden.
Hence an attempt to sweep the patio, which began with the discovery that the dog had chewed the head off the brush and presumably buried the dustpan had a feeling of déjà vu about it.
Because it meant that B&Q was presented with the familiar sight of elements of the Brumby family traipsing in looking somewhat dejected as it proceeded to waste more time and money. Twenty minutes and twenty quid later, we had a brush and shovel but an hour after that I came to the conclusion that the magnolia tree was dropping blossom and sundry garbage just a little bit quicker than I was sweeping it up and, as the dog was digging another hole and scratting mud all over the place, it was time to give up.
And, do you know what? It’s Monday too. On to the news:
RECENT WEBSITE ARTICLES:
• Market getting tougher? See here
• Main features London hotels, slowing markets, Restaurant Group etc. Link to index page – here
• Ongoing tweets found – here
PUB, RESTAURANT & DRINKS PRODUCER NEWS:
• Stock Spirits holds its AGM today. It says ‘no further information on current trading will be given during the meeting.’ Stock Spirits adds ‘a number of shareholders have indicated their intention to vote at the meeting itself. Therefore a poll will be held on each resolution and a further announcement will be made once the outcome is determined by the Company’s Registrars, which we expect to be later in the day.’
• Enterprise Inns Friday bought back some 56k of its own shares at around 94p.
• Luke Johnson has written in the Sunday Times that health zealots risk taking certain foods off our tables. He says ‘I have made my living in the food and drink industry for almost 25 years. I have opened, owned and run hundreds of restaurants, pubs, bakeries and cafes, and played a modest part in the transformation of Britain into a nation of foodies.’ He adds ‘but in recent times I have become concerned by what I believe is the demonisation of certain categories of food and drink — and in particular some ingredients, such as sugar and gluten.’ He bemoans the fact that ‘the extraordinary diversity and productivity of our food and drink sector is too often ignored. The activists discount or forget the value added, the exports, the innovations and the jobs.’
• Selfridges is set to open a water only cocktail bar.
• Axa, the world’s largest insurer, is set to stop investing in tobacco. It will sell current holdings valued at around €1.7bn.
• AB InBev is kicking off a £5bn auction for some of Europe’s foremost lagers this week, including Pilsner and Lech. The AB-SAB merger has been approved by the European Commission as long as it sells beer brands in Poland, the Czech Republic, Romania, Hungary, and Slovakia within the next six months – preferably to one brewer. City sources said last week that US giants KKR and Bain Capital are monitoring the sales, as is CVC, owner of Formula One racing, while Carlsberg is also thought to be assessing the auction.
• Aldi has launched a £600m deal to tap into the UK’s booming craft beer scene which will see the discounter stock 18 UK brewed craft beers in its UK stores. The beers, which include beverages from Box Steam Brewery, Wadworth Brewery, and Hogsback Brewery, will be sold as a ‘Specialbuy’ purchase, meaning a limited number of beers have been brought in as stock and will be priced at £1.25. The UK craft beer market is worth around £420m and, in a 2014 Marston’s report, has been predicted to reach £1bn in value by 2020.
• Young’s CEO Stephen Goodyear has spoken to MCA about the pub group’s impressive record of market-beating like for like growth in recent years. Impressive growth in brunch sales and the potential of Burger Shack are two reasons to be optimistic of future growth for the pub group, and Goodyear commented: ‘We generally spend around £11m driving our like for likes and keeping the pubs up to snuff… We’ll keep doing that and hopefully we’ll be rewarded with the kind of growth we’ve seen over the last five years’.
• Half of the British population has been on a night out without drinking in the past half year, according to CGA Peach data. The research finds that abstinence is highest in 18 to 34 year-olds, with three in five saying they have gone on a night out without drinking in the last six months.
• NPD’s Pub Tracker figures show the pub sector grew visits from families faster than the foodservice market in the year to March, although overall visitor growth was slower. Branded pub visits increased by 5% while trips to independent sites fell again by 5.8%.
• Crepeaffaire posted a 20% rise in LfL sales in the first quarter of 2016 as it looks to step up its expansion with new sites in Newcastle and central London. The all-day creperie concept, which also has its sights set on Brighton and Watford, reported net sales growth of 28% to £3m and a 73% rise in group EBITDA pre-head office costs to £720,000 for the year ending 31 December.
• IKEA has put 23 of its outdoor retail parks up for sale across Europe as it seeks to capitalise on the booming commercial property market.
• A poll of 2,000 people by Deliveroo shows that 27% of the UK’s workforce never eat lunch, while 40% eat at their desk.
• More than £15 has been added to families’ monthly fuel bills as a result of a rise in the price of diesel and petrol, according to research.
• The Antique Wine Company has entered liquidation after poor trading and a costly failed lawsuit left it in an ‘untenable position’.
• Crisp maker McCoy’s is launching its first range of flat crisps in a bid to stave off declining consumption among young male consumers. Matt Collins, KP Snacks trading controller convenience, said: ‘We know that the current flat crisp offering isn’t meeting consumer demand. Shoppers want a snack that will satisfy their appetite in between meals and are turning to other snack alternatives that are more filling. With this in mind, we’ve developed Thick Cut, a hunger-busting range of flat crisps that really delivers on flavour.’
• Sunday Times suggests Thomas Cook may be a sell. Says industry model is challenged. That’s not a shock to the industry, which has been dealing with disintermediation for a couple of decades. Co suggests that recent geopolitical upsets have confirmed in consumers’ minds the benefits of travelling with a tour operator as opposed to DIY.
• US hotel industry increased 2.2% to 68.1% in April, with average daily rate rising 2.8% to $123.14 and revenue per available room growing 5% to $83.89. The data bucks the recent fragile trend but is not enough to mark a substantial reversal, STR’s vice president noting the industry’s ‘lack of pricing power’, while the Easter effect also flattered results.
• The number of people visiting Britain in the first quarter of 2016 hit a record high of 7.36 million trips – up 6% year on year.
• The number of trips abroad by UK residents rose by 9.4% to 65.7 million holidays last year, showing the ‘resilience’ of UK travellers. ‘The 9.4% growth recorded in overseas holidays during the year is the largest annual rise in nearly twenty years, and spending on holidays exceeded pre-crisis levels for the first time since the recession,’ said a spokesperson for the Association of British Travel Agents (ABTA).
• Eurostar has reported a “challenging” Q1 on the back of recent terror attacks in Europe. Demand has been ‘dampened’.
• Eurostar reports Q1 passenger numbers down by 3% compared to same period a year earlier with sales revenue down 6%. It says ‘the impact has been particularly evident in international markets with Eurostar reporting a slowdown in travellers from the US and Asia.’ On a brighter note, Eurostar adds ‘we have seen an unprecedented demand from football supporters keen to get the Euros by train. With our city-centre to city-centre services and a brand new state-of-the art fleet of trains, we are ideally placed to carry fans from the UK direct to the heart of the action in France.’
• Odeon’s £1bn auction is said to have attracted bids from Belgium & Mexico.
• UK recording artists are now responsible for 17.1% of albums sold, around a sixth of music globally.
• Virgin Active is investing £150m in opening up to 30 new clubs in South East Asia over the next six years and also has its sights set on the US and Australia. Matthew Bucknall, chief executive of the business, commented: ‘The global health and fitness industry is evolving rapidly, with many of the current Asia health club offerings being outdated first-generation, fitness-only formats. Along with opening more of our large premium clubs, we are also looking at new formats.’
FINANCE & MARKETS:
• A UK vote to leave the EU could cause an “immediate economic shock” reports Chancellor George Osborne
• David Cameron has weighed in by saying that an EU exit would drive up food prices
• Bremain campaigners say leaving would spark year-long recession, leave GDP 3.6% lower.
• Brexit campaigners say Turkish immigrants may swamp the country. And still a month to go to the poll
• World markets: UK and Europe higher on Friday. US also up and Far East higher in Monday trading
• Oil price off the top. Challenged $50 but then falls back. Currently trading at around $48.60 per barrel
• Eurozone trade surplus rose to €27.3bn in March.
Yester-tweet – Yesterday in a Nutshell: Live Tweets on Website:
Some of the early tweets:
• PE bidders said to be ‘circling’ Restaurant Group. Certainly the latter’s shares are cheaper than they were.
• Restaurant Group yesterday announced the appointment of Graham Clemett as a Non-Executive Director & Chairman of Audit Committee
• JDW has appointed CBRE and Savills to handle the disposal of 45 pubs, 33 of which are being brought to the market for the first time
• Conviviality Retail sees sales jump by 137% to c£864m for the 53 weeks to 1 May 2016, hailing its ‘transformational’ acq. of M Clark
• Patisserie Holdings CEO, Paul May, harbours ambitions of doubling the group’s estate in the coming years
• Thomas Cook gets a reasonable press this morning, despite share price weakness yesterday.
• Directors Frank Meysman (£25k) & Michael Healy (£23k) bought shares in Thomas Cook yesterday.
• US hotel industry ‘mostly negative’ in week to 14 May reports STR. Occupancy down 2.9%, rate flat at +0.2% & REVPAR down 2.7%
• B of England MPC member Gertjan Vlieghe has said that the UK may need more stimulus if the economy does not pick up
• ECB minutes show that the bank remains concerned over low inflation expectations. Further aggressive moves were not ruled out
• Sterling strength helpful for the outbound holiday companies. New overwhelmed by geopolitical issues in short term, of course
• MERL refers to helpful currency movements & Sterling immediately strengthens. Hopefully will ease back, keep London full
• TCG gets reasonable press after bad day. Directors buying stock & tax losses worth something, shares oversold?
• Gold/oil (measure of market appetite to risk) trending lower. No. of barrels needed to buy 1oz down to 25.5. Was >34 in early March
• RTN bid? Entirely possible. PE or GNK? Both have an appetite for such assets, would get GNK in FTSE100.