Langton Capital – 2017-06-01 – Vapiano, costs, inbound tourism, Hostelworld & other:
Vapiano, costs, inbound tourism, Hostelworld & other:
A DAY IN THE LIFE:
Part of Langton is on the Med this week. It’s in Malta. Valletta will be next year’s European City of Culture. It shares that, but little else, with Hull. The daily e-mail will still go out but in a shortened format:
PUB, RESTAURANT & DRINK PRODUCERS:
• German pizza chain Vapiano has announced that it is to offer its shares for sale on the Frankfurt Stock Exchange. The IPO ‘is expected to occur in 2017’ and it will include both existing and new shares.
• Vapiano says it ‘intends to drive expansion in new and existing markets with a view to nearly double its restaurant count to reach 330 by the end of 2020.’ It reports that the ‘”Fast Casual Dining” segment [is] expected to grow at 10% compound ahead of any other segment in the restaurant industry.’
• Vapiano reports that it is ‘a successful European restaurant chain in the fast casual dining (“FCD”) segment, offering trendy, modern Italian-inspired cuisine with the goal of delivering the freshest ingredients and flavours at attractive prices. The Company was among the first to enter the FCD category in Europe when opening its first location in Hamburg, Germany, in 2002. Since then, Vapiano has grown to 185 restaurants in over 30 countries on five continents, achieving a compound annual growth rate of 27% over the past ten years. In 2016, Vapiano had over 40 million guests across all restaurants.’
• Vapiano CEO Jochen Halfmann comments ‘over the past 15 years, Vapiano has been growing very successfully as a private company. Today, we are in a unique position to capitalise on the projected growth within the Fast Casual Dining segment. We intend to further drive our growth and profitability in the coming years through focused international expansion as well as concept and product innovation. We believe that gaining access to the capital markets is the right decision to support our growth plans.’
• Vapiano had pro-forma revenue of €292m in 2016 with adjusted EBITDA of €32.7m.
• Derby Brewing reports on Crowdcube that it is now funded and closed for further subscriptions. The company extended its fund-raising period by two weeks and cut its valuation twice during the process.
• A weak pound and sharp hikes in fish and coffee costs have driven a 5.8% increase in foodservice price inflation, according to the latest edition of the CGA Prestige Foodservice Price Index. The figure is in line with price inflation of 6.0% in March, which in turn continued an acceleration from 2.9% in January and 3.7% in February. There are also signs that inflation in some food items such as fruit —while still high by historical levels—may be starting to ease a little.
• The BBPA has welcomed the London Mayor Sadiq Khan’s ‘Culture and the night-time economy’ consultation and the support it shows for pubs and the wider night-time economy. The BBPA argues against Late Night Levies and the use of Article 4 directions that can restrict alterations to premises, and is for the ‘agent of change’ principle.
• Craft beer continues to be a source of strong growth in the massive US beer market, with off-premise dollar sales growth in the craft realm ranging between just over 15% to just over 18% from 2013 through early 2016. The ‘above premium’ beer grouping, which includes craft, is dramatically outperforming the ‘below premium’ and ‘domestic premium’ groups, while the wider market remains relatively flat.
• New analysis from the latest Kantar Worldpanel shows convenience stores are outperforming larger supermarkets. The total till roll for the 12 weeks to 21 May, which includes all expenditure through main store tills, excluding petrol and in-store concessions, jumped 7.1% to £517m in symbols and independents. Tesco, Sainsbury’s, Asda’s and Morrisons’ till roll growth for the current period was 1.8%, 1.7%, 0.9% and 1.9% respectively. The Co-op’s till roll climbed 1.5% to £1.598bn.
• McDonald’s Corp announced another expansion of its delivery service through UberEats into more than 2,000 locations around the US yesterday. The fast-food giant expects to have delivery in 3,500 locations by the end of June, as it seeks to appeal more to younger consumers who want their food brought to them. ‘We see significant potential’ in delivery, McDonald’s CEO Steve Easterbrook said at the Bernstein Strategic Decisions Conference on Wednesday. ‘We’re encouraged by the early results.’
• Aldi and Lidl sales have grown at their fastest rate in more than 2 years, according to Kantar Worldpanel. The retailers’ combined sales increased by almost 20% in the 12 weeks to 21st May, as 1.1m more households shopped at the discounters. The big 4 retailers recorded average sales up 1.6%.
• Australian wine exports to China for 2016 amounted to AU$520m, increasing 40% on the previous year. Australian wines now account for 25% of wine market share in mainland China.
• BrewDog was one of the fastest growing craft beer brands in the world last year, increasing sales by 97% and annual turnover by 60%. Punk IPA was the best selling craft beer in the UK, with sales rising 130% according to Nielsen.
• Gordon Ramsey’s restaurant group reported a pre-tax profit of £750,000 for the year ending 31st August 2016, up from a £2m loss the previous year.
HOLIDAYS, LEISURE TRAVEL & HOTEL
• The STR and Tourism Economics London hotel forecast has been upgraded after strong Q1 2017 results. Michele Pasqui, an STR analyst has said ‘London hotels had an exceptional start to the year, The results we’ve seen thus far have in part been a rebound from a weak first half 2016, but more important has been the increased international tourism to the U.K. due to the pound devaluation.’
• Hostelworld has updated on trading with Chairman Richard Segal saying ‘I am pleased to report that the improved trading momentum which commenced in the latter part of 2016 has continued.’
• Hostelworld reports ‘Total Group bookings year to date are ahead of the corresponding period last year across all regions, albeit with more moderate gains in European destinations. Overall Average Booking Value is also higher than the corresponding period last year. Our continued execution of key strategic initiatives together with our highly cash generative business model positions the Group well to make further progress.’
• Hostelworld concludes ‘while mindful that the key summer travel season is still ahead of us, we remain confident of meeting the Board’s expectations for the full year.’
• The International Passenger Survey (IPS) shows that 8.1m visitors entered the UK in Q1 this year, up 7% on last year. It reports spend was up by 11% to £4.2bn.
• The IPS reports visitor numbers into the UK from the USA, Germany and the UAE were higher. Visits to London were +3% whilst visits to the rest of the country rose by 5%. Langton: It’s initially hard to see how the numbers mentioned above lead to an average +7% reported in the paragraph above.
• Marriott has announced it is to open 80 hotels in Asia/Pacific during 2017. President and managing director of Marriott International Asia/Pacific, Craig Smith, said ‘2017 is already shaping up to be a great year for Marriott across Asia/Pacific. We are looking at nearly 80 new properties slated to open their doors this year.’
• Some passengers affected by the British Airways IT glitch are still without their luggage. BA has announced that it will cover the cost of lost baggage.
FINANCE & MARKETS:
• UK now at bottom of league table for G7 growth having been near top a year ago. Q1 growth only 0.2%
• Brexit & election:
o Some Premier League players insisting transfer values (in the UK) should be discussed in Euros.
o YouGov suggests PM Theresa May could potentially lose her majority in next Thursday’s general Election. The Tories ‘could lose’ 20 seats. Their current majority is only 17.
o YouGov suggests Labour could win 25 seats.
o Mrs May had been going for a majority of over 100. The Daily Mash suggests that she now thinks next week’s election might not be such a good idea.
o Paxman labels Mrs May a ‘blowhard who collapses at the first sign of gunfire.’
o Signs that voters are falling for the Corbyn ‘Mr Nice Guy’ act.
o Mrs May criticised from all sides for debate no-show. No surprise there though J Corbyn did change his mind & attend at the last moment. Times refers to Mrs May & ‘political cowardice’ in same breath.
o Times suggests Mrs May could need a re-boot. Daily Mash points out that, if she were to return to factory settings, she would not be in favour of Brexit
• Mortgage volumes have fallen 2% in April versus the same month last year. Mortgage lenders are pointing to a drop in demand, despite low rates.
• Credit card borrowing is rising at its fastest rate in 11yrs reports Bank of England. Borrowing is up 9.7% in the month on the same month last year.
• Oil $51.17
• Sterling down vs US$ at $1.2867
• Sterling lower vs Euro at €1.1444
• UK 10yr gilt yield 1.05%
• World markets: UK down yesterday with Europe also lower. US markets down but Far East up in Thursday trade
RETAIL NEWS WITH NICK BUBB:
• John Lewis Partnership Sales Watch: We flagged yesterday that the weekly John Lewis sales figures were pretty lacklustre in May and last week’s poor sales figures certainly ended the month on a sour note. The warm weather was a bit of a mixed blessing for John Lewis and total sales were down by 5.6% gross (nearly 7.5% down LFL) in w/e May 27th and that left John Lewis running up only 0.7% gross (c1% down LFL) on a cumulative basis over the last 17 weeks. After 13 weeks the run-rate was up 1.0% gross, so May did pull the position back a bit. Over at Waitrose the warm weather in w/e May 27th helped sales rise by 3.9% gross (over 2% up LFL) and so over the last 17 weeks combined Waitrose was 1.8% up gross (about flat LFL), which is also a slight deterioration on the 13 week run-rate (of +2.0% gross).
• Today’s Press and News: The subdued supermarket sales growth in May reported by Kantar is the main talking point in today’s papers, with lots of coverage of the jump in food price inflation and the further surge in the growth of Aldi and Lidl. The Daily Mail flags that Tesco has struck a deal with Dixons Carphone to open a series of Currys PC World concessions in its Tesco Extra stores. The Daily Mail also highlights that a French Connection investor has demanded a sweeping overhaul at the business, whilst CityAM notes that the Chairman of Jimmy Choo faces a potential shareholder revolt at today’s AGM.