Saga, Stock Spirits, Cineworld, EasyHotel & other:

A DAY IN THE LIFE:

English, I’m told, is easy to learn badly but hard to learn well.

And that might well be true because, even though the big-brains in Brussels and in the world’s board rooms & laboratories speak English very well, they often sound as though they have swallowed a dictionary and use words that, whilst I know the meaning of them, I’d never use in speech in a lifetime. 

Meanwhile, at the other end of the linguistic spectrum, 400 nouns, 100 verbs and a few pronouns, adjectives etc. can go a long way. That said, I have great sympathy for some would-be English-speakers who struggle to understand that valuable and invaluable mean the same thing and that flammable and inflammable are likewise identical.

So that’s the rule, is it?

Well maybe it is. I mean habitable and inhabitable follow the same rule but then sane and insane do not – though after the political turmoil of 2016, I’m beginning to wonder. Maybe human and inhuman now mean the same thing too?

Anyway, it’s time for the news but if you would like to come off this email list please simply hit the unsubscribe button above. Similarly, if you are getting it forwarded and would like to go on directly or if you would like to recommend it to one of your colleagues, please just hit the subscribe button and/or suggest that your colleague does too.

PUB, RESTAURANT & DRINKS PRODUCERS:

• Greg Mulholland, who set up the All-Party-Parliamentary Save the Pub Group, has been replaced as its chair by Labour MP Toby Perkins, per PMA.

• Chipotle Mexican Grill expects same store sales to fall by 4.8% in Q4, which would mark its best performance in five quarters, as the operator looks to move past its 2015 food safety crisis. Same-store sales have dramatically improved during the quarter so far, as Chipotle began to lap months when results plunged after it revealed an E. coli outbreak in October 2015. Same-store sales fell 20.2% this October, and declined 1.4% in November, before rebounding by 14.7% in December. However, same-store sales were still down 15% on a two-year stacked basis, suggesting there is still plenty of ground to make up.

• Stock Spirits has released an in-line trading statement for FY 31 December 2016 and its Polish business continues to make operational progress amid ‘highly competitive trading conditions’. Group cash flow was strong and net debt ended the year at £60m (2015: £57.2m). Shares have recovered by some 90% to 179p since its stock price nadir of November 2016, when the group was buffeted by robust criticism from its activist shareholder Western Gate. Stock Spirits will update more fully on Wednesday 8 March 2017.

• Heineken has sought to ease fears that its proposed purchase of 1,900 Punch pubs would make it a pub company ‘monster’ north of the border. Lawson Mountstevens, managing director of the Heineken owned Star Pubs & Bars, addressed concerns raised by the Scottish Licensed Trade Association (SLTA), saying: ‘Of the 4,900 pubs in Scotland, we currently own just over 100¬¬ — that’s 2%. If our offer is successful, this would increase to just 6%, far from making us the monster that the SLTA says we would become.’

• Consumer spending increased by 4% in December – below the Q4 average of 4.8% — suggesting shoppers are pausing for breath at the start of 2017. The Barclaycard figures coincide with a decline in the number of consumers expressing confidence in the UK economy, which dropped by 12% from a record high of 48% at the end of Q3. Consumers still identify leisure time as a priority, with pub growth of 10.3% and restaurant growth of 11.2%, although the ‘experience economy’ premium showed signs of narrowing.

• Just Eat shares slid yesterday despite what looked like strong numbers. Order growth was deemed to have slowed

• Shake Shack is increasing the price of its food as the US prepares for nationwide wage hikes for its fast food workers. The fast food chain first announced their increase in prices, by 1.8%, at a conference call in November.

• Healthy fast food chain Leon will open in Manchester this Spring after getting a site at the Trafford Centre, writes MCA.

• Leigh Day, the law firm that last year won a landmark tribunal against Uber, is challenging Deliveroo over its assertion that its riders are self-employed and thus ineligible for holiday pay and the National Minimum Wage.

• Vapiano is closing its Great Portland St restaurant on 16 January for around 6 weeks for a £2m refurb, per MCA. 

• Kona Grill has reported Q4 & FY numbers saying that sales rose 14.5% in Q4. LfL sales were down by 4.1%.

• US Q4 restaurant sales sluggish. Kona Grill reports ‘similar to many of our restaurant peers, same-store sales for the fourth quarter were weaker than we had anticipated as we too did not experience a post-election day sales bounce.’

• Kona Grill blames ‘weak retail traffic, inclement weather and an influx of new competition as well as continued weakness in oil-impacted markets’ as driving sales lower. Says this is an industry-wide issue.

• Food prices on the rise, Premier Foods seeks increases in price of Bisto, Mr Kipling & Batchelors’ products.

• Unilever clashed with Tesco pre-Xmas when it tried to put up the price of Marmite. Things have moved on since then & rises are seen as inevitable. The Guardian reports ‘Premier has been in talks for months with major supermarkets such as Tesco and Asda over price hikes likely to be close to 5% on some ranges.’

• The ONS says the typical household’s disposable income grew by nearly £600 to £26,332 after taxes were paid and benefits received in 2015-16. Senior statistician Claudia Wells said: ‘Household incomes are above their pre-downturn peak overall, but not everyone is better off. While retired households’ incomes have soared in recent years, non-retired households still have less money, on average, than before the crash.’

• UK supermarkets enjoyed a record Christmas, according to data from KantarWorldpanel, and inflation has returned to the grocery market for the first time in 29 months. The 12-week Christmas trading period to 1 January 2017 showed the fastest recorded growth in the market since June 2014, with a £480m boost on 2015, an increase of 1.8%. The level of promotional sales fell 37% to its lowest level since Christmas 2009.

• Co-op has posted like-for-like sales growth of 3.5% thanks to its advertising campaign and a renewed focus on convenience.

LEISURE TRAVEL & HOTELS:

• EasyHotel has announced that it has signed up a new, 81-room franchised easyHotel in Belfast, Northern Ireland. EasyHotel reports ‘the existing office space and dry cleaners in the Howard Building at 24-40 Howard Street will be converted into an 81-bedroom hotel and ground floor café.’

• Following recent additions, EasyHotel now comprises total committed development projects of 1,833 rooms under development, 801 of which are owned and 1,032 are being developed by franchise partners. CEO Guy Parsons comments ‘we are delighted to announce our first hotel in Northern Ireland as a continuation of our strategy announced in September.’ He says ‘Belfast has benefitted from extensive investment in urban regeneration and is a key business and tourist destination.  Belfast’s Waterfront venue is recognised as a world leading conference and exhibition centre and the city has become a preferred location for both national and international events.’

• Saga updates on full year numbers, reports ‘Group has continued to trade strongly in the second half of the year’.

• Saga says ‘is on course to meet its expectations for the full year.’ CEO Lance Batchelor reports ‘the business continues to perform well, with our core insurance and travel divisions both demonstrating consistency in delivering robust results. I am pleased that this means we expect to report results in line with our expectations for the full year.”

• Business travel bookings on Airbnb have soared by 61% over the past two years, with millions of pounds now being spent every year, per expense management firm Concur. Chris Baker, managing director of UK Enterprise at Concur said: ‘Businesses are not necessarily moving away from booking hotel rooms for their employees, but what they are realising is there is an appetite – particularly from younger staff members to stay in less traditional accommodation, that may be in a more desirable area and offer home comforts, that large hotels cannot. The ease of booking and the favourable rates offered on Airbnb are also likely drivers for this trend and can save businesses money in the long run.’

OTHER LEISURE:

• Cineworld updates on full year, says ‘achieved strong revenue growth of 12.6%’ or 8.3% on a constant currency basis.

• Cineworld reports performance for FY to end-Dec ‘is expected to be in line with current market expectations.’

• Cineworld FY total revenues +8.3% with Box Office +7.0% & Retail +12.7%. Group says it ‘will continue with its strategic expansion and renovation plans during 2017 with 13 new sites scheduled to open, 6 in the UK and 7 in the ROW, and several major refurbishments.’

• Cineworld says 2017 outlook bright with “Star Wars: Episode VIII”, “Despicable Me 3”, “Beauty and the Beast”, “Justice League”, “Paddington 2”, “Fast and Furious 8”, “Pirates of the Caribbean: Dead Men Tell No Tales”, and “Dunkirk”.

• Cineworld concludes ‘with a strong balance sheet the Group continues to look at potential investment and expansion opportunities, and expects to deliver further value to shareholders during the forthcoming year.’

• Cineworld has announced that Nisan Cohen is appointed to the position of CFO. It reports that Dean Moore will step down as interim CFO but he has been appointed to the Board as an independent non-executive director

FINANCE & MARKETS:

• World Bank predicts 2.7% growth globally for 2017 (up from 2.3% in 2016). Emerging markets should pick up the pace. The World Bank expects the slowdown in Brazil and Russia to come to an end

• FTSE100 rises for 9th day, breaks longest ever positive run as overseas earners move ahead on weak Pound

• World markets: UK up again with Europe also up and US mixed. Far East mostly higher in Wednesday trade

• Brent around $53.75 per barrel

• Sterling down again vs US$ at $1.2162, down also vs Euro at 115.3c

• UK long interest rates up with 10yr gilt yield 1.36% (vs 1.34%). US 30yr Treasuries unchanged at 2.97%

• French industrial production picked up strongly in November.

• Incoming Foreign Relations Committee chairman Bob Corker has said Britain will be in the “front seat” re negotiating a trade deal. President Obama had said that the UK would have to go to the back of the queue. Corker told the BBC ‘they will take a front seat and I think it will be our priority to make sure that we deal with them on a trade agreement initially but in all respects in a way that demonstrates the long-term friendship that we’ve had for so long.’

• Labour leader Jeremy Corbyn has said that he would like to see a cap on earnings. He has not said at what level

• The IEA has said that Labour Leader Jeremy Corbyn’s call for a wages cap was ‘economically illiterate’. It said that this was the ‘politics of envy and spite’. The IEA says a national wage cap would amount to a 100% tax rate on income above the given level. It ‘would crush innovation in a highly competitive world.’

• Southern Trains were not operating yesterday. Emoov has suggested that a poor train service had dampened house price growth

• HSBC has warned that it needs clarity on Brexit. It says that, in the absence of such, the financial sector may lose 000s of jobs to the Continent.

o On the other hand Snap, parent company of Snapchat, is to locate its international HQ in London. It says ‘we believe in the UK creative industries. The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we’ve already begun to hire talent.’

o Jeremy Corbyn has said that he is ‘not wedded to freedom of movement’. He has said that he would not rule it out either.

o Xavier Rolet, the head of the London Stock Exchange, has called for a 5yr transitional Brexit deal

TODAY IN A NUTSHELL – TWEET VERSION & YESTERDAY’S LATER COMMENTS:

• Greg Mulholland, who set up the All-Party-Parliamentary Save the Pub Group, has been replaced as its chair by Labour MP Toby Perkins

• Chipotle Mexican Grill expects same store sales to fall by 4.8% in Q4, which would still mark its best performance in five quarters.

• Stock Spirits releases in-line trading statement for FY 31 December 2016 and its Polish business continues to make operational progress

• Heineken has sought to ease fears that its proposed purchase of 1,900 Punch pubs would make it a pub company ‘monster’ in Scotland

• Just Eat shares slid yesterday despite what looked like strong numbers. Order growth was deemed to have slowed

• Shake Shack is increasing the price of its food as the US prepares for nationwide wage hikes for its fast food workers

• Kona Grill has reported Q4 & FY numbers saying that sales rose 14.5% in Q4. LfL sales were down by 4.1%.

• Kona Grill blames ‘weak retail traffic, inclement weather and an influx of new competition’ for sluggish sales

• Food prices on the rise, Premier Foods seeks increases in price of Bisto, Mr Kipling & Batchelors’ products.

• EasyHotel has announced that it has signed up a new, 81-room franchised easyHotel in Belfast, Northern Ireland.

• Saga updates on full year numbers, reports ‘Group has continued to trade strongly in the second half of the year’.

• Business travel bookings on Airbnb have soared by 61% over the past two years

• Cineworld updates on full year, says ‘achieved strong revenue growth of 12.6%’ or 8.3% on a constant currency basis.

• World Bank predicts 2.7% growth globally for 2017 (up from 2.3% in 2016). Emerging markets should pick up the pace.

• HSBC has warned that it needs clarity on Brexit. It says that, in the absence of such, the financial sector may lose 000s of jobs to the Continent.

• On the other hand Snap, parent company of Snapchat, is to locate its international HQ in London.

• Later tweets: US$ earners push FTSE100 to new highs. Market described as ‘fragile’ by IG.

• Morrison’s numbers look good. Not the beginning of the end but the end of the beginning etc. Puts pressure on the other major grocers

• BRC KPMG says it was a good Dec for retail – though it admits that all of the performance came in the last week before Xmas

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RETAIL NEWS WITH NICK BUBB:

• Sainsbury: Today’s Q3 trading update covers the 15 weeks to 7 January, so it is “bang up to date” as former CEO Justin King used to say, with no issues over calendar shifts over Christmas/New Year etc, and it is better than expected, with the core Sainsbury supermarkets business managing to eke out a modest 0.1% increase in LFL sales (vs the small fall expected) and Argos notching up a healthy 4.0% LFL sales increase (helped by Black Friday, admittedly, and Online sales). There is no comment, however, on gross margins or profits and CEO Mike Coupe just says “The market remains very competitive and the impact of the devaluation of sterling remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy”. Hopefully he will be more expansive on the 8.30am conf call with analysts.

• Ted Baker Today’s update from Ted Baker, “the global lifestyle brand”, looks good, with Retail sales up by 17.9% (10.6% constant currency) for the 8 week period to 7 January, on the back of an average retail square footage rise of 8.5%. The company also says that “…gross margins were in line with our expectations…and the Board anticipates that the full year results will be in line with its expectations”.

• Joules The update from Joules today on its Christmas trading performance also doesn’t contain the word “LFL”, but the strong total Retail sales growth for the seven-week period to 8 January of 22.8% clearly isn’t just from opening new stores (which are up from 96 to 107 against last year) and Joules also say that the Retail gross margin rate for the same period is expected to be marginally ahead of the prior year. 

• News Flow This Week: The pace of company updates is picking up significantly this week and the Signet Xmas update will be out in the US at lunchtime. And then tomorrow…aka “Super Thursday”, brings the JD Sports update, the Marks & Spencer Q3, the Tesco Q3, the SuperGroup interims and Q2, the Mothercare Q3, the Debenhams AGM update, the Booker Q3, the Dunelm Q2, the Moss Bros update, the ASOS update and the AO.com update, as well as a McColl’s update, the ABF (Primark) update and the John Lewis Partnership Xmas overview…Phew! And Friday brings the Xmas update from GameStop out in the US.

• Super Thursday Watch: We flagged yesterday that “Super Thursday” is a nightmare for retail analysts with about a dozen Christmas trading announcements all coming out at once at 7am and so we are pleased to report that the John Lewis Partnership has decided to ease the load by releasing its Christmas update at 8am…