Langton Capital – 2017-01-05 – All Leisure Group, contactless, evolution, prices & other:
All Leisure Group, contactless, evolution, prices & other:
A DAY IN THE LIFE:
It may be an urban myth but I hear that printer ink, in its powder form, is more expensive than gold by weight.
And the manufacturers certainly seem to think so as they push it like a drug with my printer counting me down from 500 sheets left to 50 and then ‘very low’, a reading that it’s been stuck at for the last 1,000 sheets or so.
It clearly didn’t believe that it should go into negative figures as that would call into question the veracity of its earlier statements but I’ve been keeping a rough measure and, as we use perhaps 100 sheets per day, I reckon it’s good for another week or so.
And the printer is also trying to steer me to its own website. I can have 10,000 pages worth for £120, it says but, as I can get two hooky cartridges (‘re-conditioned’ in a sweat shop somewhere) for £90, I think I’ll give that one a miss.
Anyway, please feel free to forward this email to colleagues, invite them to sign up. On to the news:
PUB, RESTAURANT & DRINKS PRODUCERS:
• All Leisure (see Travel & Holidays) uses phrase ‘perfect storm’ re its collapse. We may be hearing those words a bit more this year
• Small and/or unquoted pub companies & restaurants continue to report strong Xmas trading. Xmas was better but there may be some selective reporting here. Listed companies are obliged to comment (sooner or later) and unlisted companies are not. Said one operator yesterday ‘anybody who didn’t perform more strongly this Christmas than last should take a serious look at their business model’.
• Starbucks will soon be adding a Siri-like virtual assistant to its app that will allow customers to bypass queues by placing orders remotely and picking the drinks up in store. The feature – dubbed My Starbucks Barista – is a data-driven AI algorithm that will be able to track what people buy and recommend similar products and offers in the future.
• Contactless spending has soared in the last 12 months in what has proven to be a record-breaking 2016, with year-on-year spending up some 166%. Barclaycard’s Contactless Spending Index shows this comes after 164% growth in 2015. The index found that contactless spending in convenience stores increased by 98% this year, by 285% in service stations, and by 63% in newsagents. Spending in Manchester is rising faster than in any other city, climbing 325%, with Glasgow, Blackpool, Hull and Edinburgh also seeing huge jumps.
• CAMRA has called for permanent measures for pubs registered as assets of community value (ACV), per MCA. CAMRA national chairman Colin Valentine said: ‘Unfortunately, the ACV process can be time-consuming, fraught with difficulties and, at the end of the day, is only a temporary measure. Listings must be renewed every five years to maintain protection. It simply doesn’t make sense that pub-goers have to jump through these extra hoops when it is clear that so many communities overwhelmingly want a say on the future of their much-loved pub.’
• The price of petrol and diesel in the UK is at its highest since July 2015, with the average cost of unleaded petrol hit 117.23p at the end of December. Prices rose by 3 pence-a-litre in December alone in the wake of production cuts by Opec. As a result, the oil price is now double what it was a year ago, rising from a low of $27.88 in January 2016 to more than $55 this month.
• Nisa Retail has reported a ‘positive’ Christmas trading period after increased investment helped drive sales up 2.7% to £235.6m in the 10 weeks to 1 January.
• Household debt has risen to its highest level since December 2008, with personal debt growing 10.8% in the year to 30 November to £192.2bn in the UK. Bank of England statistics show that personal debt, including credit cards and bank loans but not including mortgages or student loans, has been growing at a yearly rate of 10% for the past six months. Debt charity Step Change is calling on the government to adopt a scheme that gives problem debtors 12 months breathing space to get back on track.
• Hawksmoor Group is closing the Stoke Newington site of its neighbourhood restaurant brand Foxlow on 14 January as it ‘didn’t work’. Co-founder Will Beckett commented: ‘We tried something and unfortunately, despite great feedback for the food and service, it didn’t work… We’re not making any excuses about the wider trading environment or anything else – we made a couple of poor decisions and just didn’t get everything as right here as we thankfully have at all our other restaurants.’
• Environment secretary Andrea Leadsom has promised to slash bureaucracy in a bid to ‘set farmers free’.
• Almost half (48%) of 2,000 consumers polled by Retail Economics believe they will have less disposable income in 2017.
ALL LEISURE GROUP CEASES TRADING:
• All Leisure Group has ceased trading. The group currently has 400 passengers overseas & 7k forward bookings
• All Leisure boss Roger Allard apologises for company’s failure & blames ‘perfect storm’ of external factors.
• All Leisure Group: Group had sold several operations but further exposure to Mid-East & Cruising in Black Sea etc. still in decline
• All Leisure: Said last year ‘trading conditions are expected to remain very challenging, especially in view of the escalating conflict in the Middle East and recent acts of terrorism, and the effect these events may have on consumers’ propensity to travel.’ This proved to be prophetic.
• All Leisure boss Roger Allard told Travel Weekly ‘I am personally very sad and I apologise to everyone affected, but you can’t keep putting more and more money into a bottomless hole when it’s not working and you can’t control things that are thwarting your efforts.’ He told the journal a ‘perfect storm’ of geopolitical events had left to co ‘between a rock and a hard place’.
• All Leisure says ‘since the Arab Spring, it has been increasingly difficult to operate to these areas, either because of Foreign Office advice or a dampening of demand from consumers to travel to certain areas where we specialised.’ He adds ‘P&L-wise, it became an increasingly challenging environment. So we put Hebridean up for sale about 18 months ago. We didn’t get an acceptable offer so I went out to a number of industry colleagues to raise the money and sold it at the end of last year.’ He tells Travel Weekly ‘we also put Travelsphere and Just You up for sale about 10 months ago. Everything has been done at arm’s length and has been voted for by other board members and legal advisors and the money has all gone to All Leisure.”’
• All Leisure has ceased trading with cash and should be able to pay off creditors per reports. Chairman Roger Allard says ‘I’ve been in this industry for 45 years – half at Owners Abroad and First Choice and the last 20 at All Leisure as chairman. Customers come first and then it’s about limiting exposure to creditors’.
LEISURE TRAVEL & HOTELS:
• G Adventures has confirmed it has acquired All Leisure brands Travelsphere and Just You from Grant Thornton, which has been brought in as administrators.
• Brexit negotiations and the fall in the pound will make little difference for luxury holidays abroad this year, according to a survey of 9,468 regular travellers by Red Savannah. Some 78% felt that Brexit made no difference.
• Ryanair passenger numbers were up 20% in December as lower fares attracted 9m passengers to the airline, bringing the annual total up to 117m (+15% y-o-y). The group’s load factor rose to 94% in December, up three percentage points.
• The suspended Christmas strike by British Airways cabin crew will now take place for two days next week on 10 and 11 January.
FINANCE & MARKETS:
• Fed Reserve minutes show policymakers consider growth and inflation risks will both be higher under President elect Trump. The minutes report ‘about half of the participants incorporated an assumption of more expansionary fiscal policy in their forecasts.’
• UK construction PMI hit a 9mth high in December. Number came in at 54.2. Markit hails ‘a solid rebound in construction output during the final quarter of 2016’.
• Eurozone inflation picked up to 1.1% in December. Deflationary concerns appear to be abating. Inflation is expected to hit the ECB’s target of 2% ‘by 2018 or 2019’.
• Banks advanced 67.4k mortgages in December down marginally on the 67.5k advanced in November
• Whitehall mandarin found to replace Brexit sceptic Sir Ivan. Govt warned not to lean on staff or install patsies.
• World markets: UK higher & Europe flat yesterday. US up but Far East mostly down in Friday trading
• Brent around $56.30 per barrel.
• Sterling weak at around $1.233. Falls vs Euro to 117.1c.
• Long rates up 1bp in US to 3.05% for 30yr treasuries. UK 10yr gilt yield up to 1.34% from 1.31% a day earlier
YESTERDAY IN A NUTSHELL – SELECTION OF TWEETS, LIVE TWEETS ON WEBSITE:
• MEATliquor has confirmed it will open site number 11 in London’s King’s Cross in April at 6 St. Chad’s Place, per MCA.
• Oakman Inns has updated on trading saying that it ended 2016 with an ‘exceptional performance’ of LfLs +6.7% over Xmas
• BRC says that shop prices increased by 0.2% in December with prices for the year to date down by a reduced 1.4%.
• US restaurants heading for a battle for share. NPD says there are ‘more restaurants than visitors.’ Could be a lesson for the UK
• EasyHotel CEO Guy Parsons has bought an additional 15,630 shares in the company at a price of 95p each
• Travellers to Turkey have been warned by FCO to be cautious following the terrorist attack on an Istanbul nightclub
• The UK’s EU ambassador, Sir Ivan Rogers, has resigned. Sir Ivan had been expected to play a key role in Brexit talks
• Re Sir Ivan. Remainers say it leaves talks in disarray (before they have started) but Nigel Farage says he hopes many other ‘old guard’ diplomats will also leave.
• Bloomberg has suggested that Paris is seeking to attract 20k London City workers in a bid to replace London in this time zone
• Demo. shifts (deaths, coming of age) suggest c20bps move to Remain per month. Farage just got under wire. Parting gift of baby-boomers?
• Later tweets: On-trade. Raft of good Xmas numbers from mini-operators. Good news? Well, possibly. But would the poor performers tell us?
• Muddled, blinkered & unfocused approach says resigning Sir Ivan. Nonsense say Brexiters. Just need a ‘can do’ approach & loud voice
• Bellwether Next cautious. Brexit supporter CEO Simon Wolfson sees ‘another challenging year’ with ‘exceptional levels of uncertainty’.
• Just need ‘can do’ approach say Brexiters. Did anyone tell anti-EU Next CEO Simon Wolfson?
• NXT wrong-foots Press etc. Was being bigged up 2dys ago but Sky called it right, resides in Profit-Warning City, Arizona
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RETAIL NEWS WITH NICK BUBB:
• John Lewis Sales Watch: There was a bit of commentary yesterday about the apparent contrast between the upbeat John Lewis Christmas sales figures and the gloomy Next update, but it is, of course, silly to compare a 54 day update for full-price sales with an update for the final Christmas week, particularly as that week was boosted by the calendar timing impact of Christmas Day falling on a Sunday (rather than a Friday) this year and a bit of Online discounting…To be fair, John Lewis didn’t make too big a deal of the 36% jump in sales to £176m in w/e Dec 24th, not least as the following week saw a slump, despite the launch of Clearance and the move of Boxing Day, with sales down by 9.4% on last year to £136m in w/e Dec 31st. So those 2 weeks combined moved the cumulative run-rate up a notch, from 3.3% after 20 weeks to 4.2% for gross sales (c2.5% up LFL) after 22 weeks of the second
• Waitrose Sales Watch Over at Waitrose, the last 2 weeks have seen a similar pattern of up/down, given the calendar shift, with gross sales 31.1% up in w/e Dec 24th and then 12.5% down in w/e Dec 31st. So those 2 weeks combined also moved the cumulative run-rate up a notch, from 2.0% after 20 weeks to 3.3% for gross sales (flat LFL) after 22 weeks of the second half, but the later shift of Christmas was always likely to have that sort of impact.
• WH Smith Watch: We will have to wait until Jan 25th to find out how WH Smith performed at Christmas, although we have heard that some people in the City are optimistic, despite the shameful state of the High Street stores. Interestingly, the low-profile CEO Stephen Clarke appeared in an interview in the Telegraph on Tuesday, to help promote the company’s 225th Anniversary. And as the Telegraph’s Retail correspondent said “It’s rare for a FTSE Chief Executive to talk about mental health, but rarer still to be openly gay”. Even more remarkable, as the City Spy column in the Evening Standard highlighted last night, was that Steve Clarke dismissed the anonymous but cult Twitter account @WHS_Carpet, which regularly savages the poor quality of the flooring and merchandising in WH Smith stores, for using “old and recycled photographs”…
• News Flow This Week: There are no more company updates scheduled this week, although the Sports Direct EGM vote on the future of the embattled Chairman Keith Hellawell is this morning.