A Day in the Life:

I think we might have to go all Travis Bickle on the dog because, as his hair seems to be lighter than air and thus gets in your food, your tea, your baths, shower and your own hair, it might be better if he didn’t have any at all.

And, as the creature is for the most part black and has hair that looks like a benign crack on a cup when you’re drinking your morning cha, I think it’s a racing certainty that we’ve all ingested more of the stuff than is good for us into the bargain.

Hence, if it wasn’t for the upkeep involved in shaving the surface area of a small horse on a weekly basis – and the fact that he would almost certainly bite me – the streamlined look is the one that we would have been going for. Long-haired mountain dog or not. On to the news:

The News:

RECENT WEBSITE ARTICLES:

• Small vs large ticket items – here

• Recent notes – here

• Ongoing tweets, older emails found – here

PUB, RESTAURANT & DRINKS PRODUCERS:

• Young & Co updates on Q1, says ‘we have had a good start to the current year, without much help from the weather.’

• YNGA says ‘in the first thirteen weeks of the new financial year, managed house revenues were up 6.5% in total, and up 4.1% on a like-for-like basis, and this was again achieved against strong comparatives from a year ago. ‘

• YNGA says ‘clearly, the result of the EU Referendum has created considerable political and economic uncertainty and it would be unwise for us to speculate at this early stage on the longer-term effects on the consumer. We remain focussed on our proven strategy and are well positioned to deliver an excellent customer experience as well as superior returns for our shareholders.’

• CGA survey on National Living Wage finds a welcome from most pub & restaurant respondents saying ‘it will have a positive effect on the market’.

• CGA says 54% of pubs & restaurants surveyed thought the NLW was ‘a positive change for the eating and drinking-out market, even though a similar number (53%) said it would have a negative impact on their own businesses.’

• Some 65% of pubs & restaurants believe that raising the NLW to £9 per hour by 2020 is simply not realistic. CGA Peach’s Peter Martin reports ‘although companies have by and large accepted the introduction of the living wage, there is a real concern that driving it up too fast down the line will put excessive pressure on business, with fears that some will just go bust.’ Mr Martin adds ‘and it has to be remembered that this survey came before last week’s Brexit vote.’

• CGA Peach. Most companies are seeking savings to pay for NLW but 46% have passed costs on to customers. Only 10% admitted to cutting other benefits to staff such as lunch offers or reduced levels of training.

• Casual dining brands in the UK with less than 25 sites have expanded by 39% over the past three years, resulting in a combined 489 openings in the UK. In a report by Savills, the group’s head of leisure commented: ‘The significant growth by the smaller brands emphasises the development we’ve seen in new concepts. These smaller chains have provided consumers with more choice and offered a point of difference in the market, and with this success it is driving them to open more sites around the country. Furthermore with the investment from private equity we could see more brands with the capital to grow.’

• Restaurant Group says it has awarded incoming CFO Barry Nightingale options (subject to performance) over 151,425 shares at nil cost

• Crowdcube has launched its own crowd funding appeal.

• JW Lees has announced a 1.8% rise in pre-tax profits to £5.7m for FY16 on a 0.2% increase in sales to £64.1m after seeing growth in its managed pubs, tenanted pubs, and brewery divisions. The group spend a record £5.2m on its pubs as part of its aim to improve its quality and service and become ‘the best pub estate in the North West’.

• JD Wetherspoon’s The Windmill has been named the world’s best airport pub at the Food & Beverage awards in Geneva. Two other Wetherspoon pubs at Birmingham Airport and at Liverpool Lime Street Station also won awards. Wetherspoon head of property and acquisitions, Jon Randall, said: ‘The award is testament to the amazing efforts of manager Michael Wilkins and his team of 160 staff who serve great food and drink in a superb looking pub. We are equally proud of the awards to Wetherspoon at Birmingham Airport and The North Western at Liverpool Lime Street Station.’

• The ALMR has welcomed George Osborne’s move to cut corporation tax to a rate of 15% although ‘wide scale cut[s] for businesses are still needed’. Chief executive Kate Nicholls drew attention to the ‘three years of uncertainty for employers’ that will likely come as a result of the EU referendum and added that ‘reform of business rates and postponement of the Apprenticeship Levy would ensure that the sector is in a healthier position over the coming months and weeks.’

• Stonegate has posted a 21% jump in adjusted EBITDA to £50.2m for the 28 weeks to 10 April 2016 as total revenue rose 12.8% across its 660 pubs to £342m. Like-for-like revenue was up 2.1% and like-for-like pub profit increased 10.6% thanks in part to strong trading during the Rugby World Cup and the Christmas period. Stonegate bought Maclay’s and TCG in 2015 and its chief executive, Simon Longbottom, confirmed that the group may continue to grow via selective acquisitions going forward.

• The Slug and Lettuce owner Stonegate has ‘absolutely no plans’ to go ahead with a £1bn float considering the current Brexit-related stock market volatility.

• Diageo-funded Distill Ventures has invested in the ‘world’s first’ distilled non-alcoholic spirit Seedlip for those looking to ‘drink when you’re not drinking’.

• Brooklyn Brewery is expanding beyond craft beer and into music by launching a UK record label that aims to support young, independent artists.

• Sainsbury’s is ending its joint venture with Netto following a ‘comprehensive review’, ending a trial in the discount sub-sector that began in June 2014. Mike Coupe, Chief Executive of Sainsbury’s, said: ‘Netto is an excellent retailer with talented leaders and colleagues and we have learnt a great deal about the discount grocery retail market from this trial venture.  Since we first envisaged the trial, almost three years ago, the grocery sector has evolved significantly and we launched our strategy 18 months ago to address these changing dynamics.’

• Nisa has swung back to an underlying profit of £0.6m for the 53 weeks to 3 April 2016 after a £5.4m loss in 2015, although sales fell by 1.9% to £1.3bn.

LEISURE TRAVEL & HOTELS:

• TUI’s outgoing boss of non-mainstream (and former CFO) Will Waggott is thought likely to be involved in any bid for the business. The marketing of Travelopia for disposal is expected to start in the autumn. TUI says ‘the sale of the collection of more than 50 brands and very successful companies will commence in autumn this year with the exception of Crystal Ski and Thomson Lakes & Mountains. They remain part of the group and are being transferred to the tourism business of Tui UK and Ireland.’ It says ‘both Crystal Ski and Thomson Lakes & Mountains have strong synergies with the core Tourism business.’

• Easyhotel announces sale of A3 space at 47 Castle St in Liverpool for a sum of £0.6m. Re the hotel above the A3 space, Easyhotel says ‘planning permission has been granted to convert the upper floors into a 79-room easyHotel, with an entrance on the main street and the hotel reception located on the first floor. Refurbishment works have commenced and the hotel is expected to open by January 2017.’ CEO Guy Parsons comments ‘our strategy is focused on the ownership of high quality hotel assets and this transaction enables us to recycle capital through the disposal of surplus assets, the proceeds of which can be re-invested in future owned hotel projects in order to maximise shareholder returns.’

• HVS has said that consumers booking a stay with a particular hotel group are more than ever likely to be offered 2 brands on 1 site

• EasyJet is reportedly close to moving the airline’s legal base from the UK, although such a move would take months, writes Sky News. Sources say the budget airline has already held preliminary talks with a selection of unidentified EU member states, with one speculating that ‘the most workable structure would be to be an EU-registered entity with a UK subsidiary.’

• Air traffic controllers are set to strike in France and Italy today.

OTHER LEISURE:

• Gym Group updates on H1, says it is seeing ‘strong trading momentum’ and adds that its ‘rollout continues to plan’. It says ‘trading for the half year has met the Board’s expectations and profit for the full year 2016 is anticipated to be in line with consensus market expectations.’

• Gym Group says it opened 6 new gyms in H1, taking its estate to 80 sites. Debt is down to £2.5m from £7.1m at year end.

• Gym Group says pipeline remains strong. CEO John Treharne says ‘this is another strong performance underlining the strength of our business model, the power of our low cost proposition and the success of our roll out. We are on track at the half way stage and are now focussed on delivering our goals in the rest of the year to come.’

FINANCE & MARKETS:

• UK construction PMI the weakest for 7yrs in June. Fell to 46.0 where any number below 50.0 indicates contraction. Markit said ‘the extent and speed of the downturn in the face of political and economic uncertainty is a clear warning flag for the wider post-Brexit economic outlook.’

• Confidence across firms at a 4yr low in run up to EU referendum reports Federation of Small Businesses. It says there was a degree of paralysis in both government and business.

• World markets: UK & Europe down yesterday. US closed but Asia down in Tuesday trading

• Oil price down through $50 again. Trading at around $49.70 per barrel

LEISURE & ECOMOMIC NEWS – BREXIT SHOCK:

• See also economic news above.

• UK stocks:

o Short sellers have made the UK’s supermarkets (100% domestic, exposed to the consumer etc.) the most shorted sector in the market

o Others see Aldi and Lidl, which import more of their products, as having to raise prices in the face of Sterling’s fall

o Services PMI due out today.

• Finance:

o Pension liabilities are set to rise in the wake of gilt yield falls.

• Politics:

o The Economist says next PM will have unpleasant task of telling the electorate that it can’t have what most of it voted for.

o BBC says incoming EU money for infrastructure projects etc. may be on hold. Some €6.2bn was planned to be spent by the EU in England over the 6yrs from 2014 to 2020. It says some areas benefited more than others adding ‘in Cornwall and the Isles of Scilly the funding was worth £1,070 per person over seven years, by far the biggest share. In Buckinghamshire and Thames Valley, it was just £26 per person.’

• Property:

o Listed Scottish asset manager Standard Life has suspended redemptions on its £2.7bn property fund. It is concerned about falling valuations lagging redemptions. It has in effect, at least from its shareholders, borrowed short and lent long. Standard Life said ‘due to exceptional market circumstances, Standard Life Investments has taken the decision to suspend all trading in the Standard Life Investments UK Real Estate Fund (and its associated Feeder Funds) from 12:00 noon on 4 July 2016.’ It says ‘the decision was taken following an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the EU referendum result.’ SL adds ‘the suspension was requested to protect the interests of all investors in the fund and to avoid compromising investment returns from the range, mix and quality of assets within the
portfolio.’

o The RICS house price index is out on Friday.

• Post truth politics:

o Culture Sec John Whittingdale is quoted as saying that we could not cut VAT on hospitality when we were in the EU. Not like Belgium, Finland, France, Ireland etc. than? Mr Whittingdale said ‘if we wanted, for example, to abolish VAT on accommodation or attractions, we could now do so. We couldn’t have done when we were in the European Union.’ That doesn’t appear to be true.

o IEA says a Norway-type deal with the EU would immediately end the extreme uncertainty surrounding Brexit. It would keep the UK within the single market but it isn’t possible unless we allow freedom of movement and pay into the EU’s coffers (as Norway does).

• On a brighter note:

o S&P says the UK will not suffer a recession next year. It says ‘devaluation acts a shock absorber. It stimulates exports and makes the London Stock Exchange more attractive to foreign investors.’ It believes that this will overcome the uncertainty felt re the political & economic outlook.

YESTERDAY IN A NUTSHELL – SEE LIVE TWEETS ON WEBSITE:

• Some of our morning tweets: New drinking guidelines have been criticised for lacking credibility and being potentially misleading by MP Byron Davies

• Bath Ales has been bought by St Austell Brewery for an undisclosed sum, strengthening the latter’s presence in the South West.

• Leon has approached former Whitbread CEO Alan parker to help with its US expansion reports The Telegraph

• Waitrose has reported a 17% drop in profit to £66.6m for the year to end January 2016 due to ‘exceptionally tough’ conditions’

• Travel agencies have reported a jump in foreign exchange sales in the wake of the EU referendum amid reports of panic buying

• George Osborne has told the FT that he will cut Corporation Tax further in order to make the UK attractive to international companies

• George Osborne has abandoned plans to balance the UK government’s budget by 2020. Debt will now be higher than anticipated

• ICAEW says decision to leave EU ‘will dominate British national life for the next decade, if not longer.’ Plenty more on Brexit, see e/m

• Other Tweets: Gold / oil (the number of barrels it takes to buy an ounce) relatively stable around 27. Both prices have been rising

• Sterling slipping again, sitting around 132c to the dollar. We could be the only country able to successfully import inflation

• Corn price down sharply. Down 17% on a year – but most of that in the last 2-3wks. Milk price (an important input) in the UK also lower

• Market strong but only FTSE100 (mostly internationals). Best week since 2011 last week. But RBS, Restaurant Group close to 5yr lows

• Companies buying back shares. Foresight or foolhardiness? Bought more back than at any time in a decade, we’re told

• Springboard survey in Mail on Sunday says retail footfall down 5% in the 7dys post Brexit vote. Too soon to draw a conclusion

• Post truth politics #1. We can spend more on NHS, education post Brexit. Also cut taxes, maintain benefits. How about b*#*cks?!

• Post truth politics #2. We can set up a tax haven on EU’s doorstep & they will still give us open access to markets.

• Construction PMI out. Always quick to hire (and fire). Building contracted in June, worst month for 7yrs. http://www.bbc.co.uk/news/business-36701273

• The Economist – ‘Next leader must explain…the illusion they were promised—all EU’s benefits with none of its obligations—does not exist’

RETAIL NEWS WITH NICK BUBB:

• Today’s Press and News: The big news is that Sainsbury’s is to close its Netto joint venture with the Danish discount supermarket chain Dansk, a move which is mocked by the Business editorials in the Telegraph and the Times. There is also quite a lot of coverage of the good sales and profits growth announced by Superdrug for y/e December, whilst the FT flags that former M&S boss Marc Bolland has pitched up as the head of the European operation of the Blackstone private equity fund. And the stockmarket reports note the jitter sin M&S yesterday ahead of the Q1 sales on Thursday.

• News Flow This Week: As the sector tries to reassess the outlook for the second half of the year after the EU Referendum vote, the Topps Tiles’ Q3 update and Booker’s AGM update tomorrow will get more attention than usual, but the big company news day is Thursday, in the form of the Marks & Spencer Q1 trading update, the much-awaited Sports Direct finals, the ABF (Primark) trading update and the Dunelm Q4 sales update…In politics, tomorrow will be the big day, as the publication of the long-awaited Chilcot Inquiry into the Iraq War will get plenty of coverage, whilst the selection of the final Top 2 in the Tory Party leadership contest should become clear (after today’s first round of voting). For some light relief, tomorrow morning also brings the Sainsbury AGM and, in the evening, the semi-final between mighty Wales and Portugal in Euro 2016.