Langton Capital – 2016-10-24 – Fulham Shore, costs, inbound tourism & other:
Fulham Shore, costs, inbound tourism & other:A DAY IN THE LIFE:A DAY IN THE LIFE: Langton is on a beach paying stupid rates for its Euros. The less said about Hull City the better. On to the news: PUB, RESTAURANT & DRINKS PRODUCERS: • Fulham Shore has exchanged on two new Franco Manca restaurants in Richmond and in Putney for opening in March/April 2017. The 28th Franco Manca opened last week in the Westfield shopping centre. • Fulham Shore to open in Southampton in Dec 16 & Reading in 2017 w. 3 sites in Edinburgh & 5 elsewhere in UK (outside London) in 2017/18 • Fulham Shore’s Real Greek operation is to open at Boxpark Croydon in October with a Southampton to follow in December • Fulham Shore to have 40+ Franco Manca’s by early-2018 with another 10 or more Real Greeks also in operation • The ALMR is concerned about the increases in costs to pubs in Scotland of introducing minimum unit pricing after the Scottish government won the right to introduce the measure. Chief executive Kate Nicholls commented: ‘This year we have seen beer sales in the off-trade overtake beer sales in the on-trade and yet pubs and bars will still be forced to bear this indiscriminate financial burden and additional, unnecessary level of bureaucracy.’ • McDonald’s global sales rose by 3.5% in the third quarter to 30 September as operating income grew by 5% as diluted EPS increased by 7% to $1.50. ‘Customers today are more informed and demand greater choice and variety when they dine out. That’s why we’re evolving the McDonald’s experience to provide more high quality, affordable food and beverage options and convenient solutions for customers on the go,’ said McDonald’s President and Chief Executive Officer Steve Easterbrook. ‘Our third quarter results, including our fifth consecutive quarter of positive comparable sales across all segments as well as improved restaurant profitability, are a testament to the progress we are making to satisfy the needs of today’s dynamic customers.’ • The CEO added: ‘Looking ahead, we are focused on growing global comparable sales and serving more customers while being mindful of the near-term challenges in several markets. We remain committed to driving long-term, profitable results while pursuing our goal of being recognized by our customers as a modern, progressive burger company.’ • Fleurets has reported a 23% rise in property viewings in the quarter following the EU referendum, possibly because of continuing low interest rates. • Tesco is matching Argos on the prices of more than 8,000 products for Christmas as part of the group’s Brand Guarantee scheme. LEISURE TRAVEL & HOTELS: • New York governor Andrew Cuomo has signed into law new rules banning short term apartment rentals in New York. Airbnb is fighting back against the decision. • VisitBritain data indicates the UK welcomed its highest ever number of inbound tourists in August this year, with the 3.8m visits marking a 2% increase. Tourist spend rose 4% year-on-year, driven by a 13% increase in visitors from North America. • Post Office Money has warned that the pound will be worth at least 15% less for travellers to nearly 20 of the world’s most popular destinations. The exchange rate against the euro has fallen 18.5% in the year to October 17 to €1.08 while sterling was worth 21.2% less against the dollar in the same period, with a rate last Monday of $1.19. • A last minute general strike at Pisa airport has caused disruption to airlines including EasyJet and British Airways. • Shearings’ chief executive, Denis Wormwell, will step down at the end of the year after almost ten years at the company to pursue a non-executive career. • Telegraph reports move to sell Parkdean Resorts for as much as £1.2bn has stepped up a gear OTHER LEISURE: • Nintendo has given a preview of its new gaming system, Nintendo Switch, which can be used as both a traditional console as well as a handheld device. Shares in the company fell by 6%, suggesting the market is sceptical of the Japanese group’s capacity to take on competitors such as Sony and Microsoft in a fast-evolving gaming market. • AT&T is in advanced talks to acquire Time Warner in a proposed deal that would give the telecom giant control of HBO, CNN news, Warner Bros and other media assets. FINANCE & MARKETS: • Government borrowing rose sharply in September to £10.6bn per the ONS. Figure was £1.3bn higher than same month in 2015. Public sector debt now stands at some £1,600bn. • The British Bankers’ Association has reported that it expects large banks to make the first moves to relocate outside the UK by 2017. Hard Brexit talk is in the ascendancy and the BBA’s boss Anthony Browne tells The Observer ‘public and political debate at the moment is taking us in the wrong direction.’ He says a number of banks have ‘set up project teams to work out what operations they need to move by when, and how best to do it’. • World markets. UK down Friday but Europe mostly higher. US down but Asia mostly higher in Monday trade • Oil off a dollar or so over the weekend. Currently trading around $51.55 per barrel for Brent Crude. • Sterling trading a little below $1.22 to the US$. • Microsoft is reported set to increase prices in the UK by as much as 22% due to the fall in the value of Sterling YESTERDAY IN A NUTSHELL – SELECTION OF TWEETS, LIVE TWEETS ON WEBSITE: • Facebook teams up w. Deliveroo, ticketmaster & others to offer food and drink ordering on the platform. • Pret a Manger’s director of food, Caroline Cromar, says coffee chain is trialling new delivery models with Deliveroo & Uber Eats • Fourth Hospitality has reported that ‘hourly pay in hospitality [is] racing ahead of living wage’. • Fourth Hospitality says industry is facing ‘very strong employment cost inflation’ & gender pay gap has totally disappeared. • Pernod Ricard reports Q1 numbers, says are ‘consistent with existing FY17 outlook’. Organic sales growth 4%. • CAMRA may delay its final decision on its Revitalisation Programme until 2018, a year later than planned • Imbiba is to raise funds for three existing operations and one new company. EIS eligibility will set the 3yr clock running afresh one existing companies • Must be a stock pickers’ market. I mean when did 25x EPS & a 2% yield become ‘cheap’? • IHG acknowledges REVPAR growth has ‘slowed’ but says fundamentals ‘compelling’ & group remains confident in outlook. • Intercontinental Hotels Group reports numbers, says has turned in a ‘solid trading and strong signings performance’. • IHG CEO says ‘looking ahead, while industry RevPAR growth has slowed, the fundamentals for the sector, and particularly for IHG, remain compelling • STR reports US hotel market saw occupancy +1.6% in Sept with rate +3.9% and REVPAR some 5.6% higher • STR reports US hotel industry went backwards in week to 15 Oct. Occupancy down 1.4%, rate down 0.2% and REVPAR minus 1.6% • City of Culture Hull has secured a £185k grant from the Discover England Fund to develop cultural tourism • Spanish hoteliers have been cautioned not to ‘kill the goose that lays the golden egg’ by pushing prices up next summer. • Inbound tourism to France fell by 7% in the nine months after the 13 November terrorist attacks in Paris. • ECB holds rates, will discuss how to extricate itself from its bond-buying programme in December. RETAIL NEWS WITH NICK BUBB:
• Saturday Press: The embattled Philip Green was again in focus in the Saturday papers, with the Daily Mail (which has renamed him “Mr Shifty”) running a photo of him walking around Monaco in his gym kit and claiming that he should have been in a meeting with the Pensions Regulator to talk about the BHS pension deficit. The City Editor thundered that although his behaviour is beneath contempt, so too were the MPs who laid into him last week: “a series of ignorant windbags who gave vent to their faux anger”. The Guardian, however, noted that the removal of Philip Green’s knighthood is far from certain despite the MPs’ vote last week. In other news, the Times had an exclusive about the record results announced by Harrods for y/e January (sales rose by 4% to £1.4bn) and also had a feature on the store that sells “everything from diamonds to doughnuts”. The current sales boom at Harrods
• Sunday Press: The beleaguered Philip Green was also in focus in the Sunday papers, with the Observer (which is no friend of his) noting that the MPs’ vote on his knighthood carried “about as much weight as a Top Shop model” and its Business leader thundering that Philip Green isn’t the only one responsible for the collapse of BHS (a point that was also made by the City Editor of the Mail on Sunday in his column). On that note, the Sunday Times flagged that the administrators of BHS are seeking a High Court petition to wind up Dominic Chappell’s Retail Acquisitions company, so that the flow of cash from BHS to Dominic Chappell and his associates can be analysed, although the Sunday Express claimed that this can’t happen until the vexatious BHS pension issue is sorted out. The big story in the Sunday Telegraph was that French Connection is being circled by a number of Overseas
• Grocer Watch: The widely followed Grocer “33” weekly supermarket pricing survey in Saturday’s Grocer magazine saw Asda win again, this time by a big margin. The Asda basket of £63.05 was £4.28 cheaper or 6% than second-placed Tesco, although it still had to give a £2.18 voucher (as part of its guarantee to be 10 % cheaper than its rivals), whilst Tesco gave an instant discount of £2.83. Morrisons was third, on £67.98 and Sainsbury was 30p behind. Poor old Waitrose was way behind, as usual, with a basket costing £76.84…The separate Grocer “Mystery Shopper” weekly survey on Store Service and Availability was won by Sainsbury yet again, as their 42,000 sq ft superstore in Weston-super-Mare topped the rankings, with a very solid score of 83 out of 100. The Tesco Extra hypermarket at New Malden on the A3 came bottom, with a score of just 58, as a result of poor stock availability • News Flow This Week: Over in the US, mighty Apple announce their Q4 results tomorrow, but, with the schools on half-term, there isn’t that much happening in the UK this week, although the Carpetright Q2 update is out tomorrow morning (followed by analyst’s store visits to Purley Way Croydon and Epsom in the afternoon), with the Debenhams finals and the Inchcape Q3 following on Thursday. And as the end of the month is coming up fast, the CBI Distributive Trades survey for “October” is out on Thursday morning and the monthly GFK Consumer Confidence survey is out first thing on Friday. And by the end of the week, John Lewis should have announced who is to succeed Andy Street as MD.
• Share Buyback Watch: The notoriously shrewd “Mr Share Buyback Man” at Next has returned to action in the last week or so, no doubt prompted by an improvement in October trading, but he hasn’t got much firepower left (pending a review of the programme on Nov 2nd, along with the Q3 sales update) and his last purchase, last Tuesday, was a mere 35,000 shares at 4650p. It was therefore interesting that the embattled Sports Direct announced on Friday that had they mandated their brokers to buy up to £89m of stock during their close season, from Oct 21st to Dec 8th, but there is often less to these announcements than meets the eye, not least as Sports Direct’s feeble buyback programme has only amounted to £200,000/300,000 worth a day of late. In much the same way, WH Smith didn’t buy any shares back during their close period, from Aug 31st to Oct 13th, despite setting out a similar sort of |
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