Langton Capital – 2016-08-08 – Craft beers, domestic holidays, French hotels & other:
A Day in the Life:
Langton, still blundering in New Mexico for a few hours before moving back towards Arizona, spent the weekend in Albuquerque.
And it’s been chucking it down, it’s the monsoon season. Lightning starts over the hills around three, four p.m. and then the heavens open around six. It’s 32 degrees, mind, so if you don’t mind risking the lightning, you can always stay out.
Anyway, a shortened email – with perhaps some delay – will be going out for a little while. On to the news:
PUB, RESTAURANT & DRINKS PRODUCERS:
• PMA writes that the award-winning London pub, the Truscott Arms, is closing as a result of an incoming rent hike from £75,000 to some £250,000 per year.
• SIBA expects to see a boost in demand for local beers from UK craft breweries following the country’s decision to leave the EU. SIBA managing director Mike Benner said: ‘in times of uncertainty, people tend to associate themselves more with their own local communities … we expect that trend to continue in the coming months of uncertainty. These effects could be positive for British craft-brewed beer in both the on- and off-trade.’
• AB InBev will cut 575 UK jobs at rival SABMiller, according to details of its £79bn takeover.
• London-based bar and restaurant operator Kornicis has posted a 4% rise in like-for-likes in the first nine months of the year.
• Deliveroo is to move into 28 new UK markets in the next two months after securing more than £200m in funding for its RooBox initiative and other ventures.
LEISURE TRAVEL & HOTELS:
• Cruise.co.uk has been sold to Bridgepoint Development Capital for £52m, meaning Risk Capital Partners has now exited its majority stake in the online business.
• Train services to Gatwick airport are braced for further disruption next week due to another strike by Southern Rail Staff from 8-12 August.
• Jet2.com is banning the sale of alcohol on early morning flights and is calling for airports and retailers to do the same.
• EasyJet was forced to cancel 350 flights in July compared to 318 in the same month last year, with the increase primarily due to fires at Rome Fiumicino airport.
• Inflexion has sold 10m shares in On The Beach for 215p each. The investor reports ‘following completion of the Placing, Inflexion will hold 38,432,801 ordinary shares in the Company, representing approximately 29.5% of the Company’s issued share capital. The remainder of OTB shares held by Inflexion following the Placing will be subject to a lock-up which ends 90 days after completion of the Placing (subject to waiver by Numis and to certain customary exceptions).’
• The number of nights spent in French hotels by foreign tourists fell 10% in July on the back of terrorist attacks
FINANCE & MARKETS:
• US employment rose more than expected for the second month in a row in July and wages picked up, increasing the likelihood of a Fed rate rise this year. Nonfarm payrolls rose by 255,000 jobs after an upwardly revised 292,000 surge in June and the unemployment rate was unchanged at 4.9%.
• World stock markets are generally back to year highs.
• The Bank of England’s deputy governor, Ben Broadbent, has told the BBC that further interest rate cuts this year are possible if the economy worsens.
• Savers may be in for a further 5yrs of low to zero interest rates
• Halifax has reported that house prices in the UK fell by 1% in July. They were still up by 8.4% year-on-year. The lender said that it was still too early to pin the drop on the 23 June Brexit vote
• HIS Markit has reported that the number of people in the UK securing a permanent job has fallen for 2mths back to back.
• Recruitment & Employment Confederation reports ‘the UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009.’
• Mark Carney has said that the UK is going through a ‘period of adjustment’
• The Independent has reported that the SNP may try to block Brexit unless it is able to secure a special deal for Scotland
• The number of Irish passport applications coming out of the UK rose by 70% after the 23 June Brexit vote
• The Daily Mail is saying that the UK could be about to see a £30m ‘budget black hole’
RETAIL NEWS WITH NICK BUBB:
• Saturday Press: There was plenty of coverage in the Saturday papers of the latest problems at RBS, but the main Retail story was that shareholders will get a chance next month to vote on whether Sports Direct should hold a full-scale independent review into its treatment of workers (100 Unite union members, 95 of whom own just one share, have tabled a resolution at the AGM on Sept 7th, according to the Sports Direct Report & Accounts published on Friday). And the Philip Green/BHS saga continued, given the reports that Frank Field MP of the Commons Work and Pensions Committee has met with the Serious Fraud Office to discuss a possible criminal investigation into Philip Green’s sale of BHS to three-time bankrupt Dominic Chappell: the Business Editorial in the Times joked that it is to be hoped that the SFO doesn’t lose the unpublished evidence provided by Frank
• Sunday Press: The Philip Green/BHS saga spilled over into the Sunday papers, but this time it wasn’t the Sunday Times, Philip Green’s bete-noire, that was stirring the pot, but the Sunday Telegraph, with a front page Business section headline “Investigations pile pressure on Green”, noting that the Serious Fraud Office has narrowed the focus of its inquiry into the collapse of BHS onto whether there is sufficient evidence that Philip Green or Dominic Chappell broke the law through “fraud by misinterpretation” and that the Pensions Regulator has widened its scrutiny to the rest of Arcadia. And talking of Arcadia, the Observer had a double-page spread headlined “The BHS pension hole just got bigger: can Green find the money?”, with a detailed, if uncritical, review of what Philip Green could sell to raise the money to pay off the BHS
• Grocer Watch: The widely followed Grocer “33” weekly supermarket pricing survey in Saturday’s Grocer magazine saw Asda win convincingly again, despite Morrison’s much-touted price cuts last week: the Asda £54.53 basket was nearly £3 cheaper than Sainsbury, with Tesco in 3rd place on £58.21 (before its Brand Price Guarantee voucher). Morrison’s was well off the pace, on £64.11, albeit this outcome was badly skewed by charging as much as £12 for “Finish” dishwasher tablets (versus the £6 promotional price in Asda and Sainsbury). Needless to say, poor old Waitrose also charged £12 for “Finish” tablets and their basket cost as much as £68.64. There was more good news for Asda in the separate Grocer “Mystery Shopper” weekly survey on Store Service and Availability, as the Asda 63,000 sq ft superstore in Princess Road in Manchester
• News Flow This Week: There’s not that much going on this week, but the BRC-KPMG Retail Sales figures for July first thing tomorrow should make for better reading than the June figures did, whilst Thursday brings the DFS pre-close and the Card Factory pre-close. And the 2016 Olympic Games in Rio continue, with saturation coverage on the BBC…so come on Team GB.