Langton Capital – 2017-08-11 – Greene King, Restaurant Group, Monarch, Domino’s etc.:

August 11 2017

Greene King, Restaurant Group, Monarch, Domino’s etc.:


So, Shelfies are apparently a thing.

It’s where you remove the smut and dime novels from your bookshelf and replace them with Dickens, Dostoevsky & thoughtful hardbacks on how to be a new-age man whilst not looking like a greasy creep and then take a photo of yourself with said highbrow literature in the background.

Of course, you’ll have to take it back to the library afterwards or, worse still, if you’ve had to buy it then a trip to the charity shop will be in the offing but, in the medium term, it’s job done.

And, fortuitously, I do have some James Joyce, Vasilly Grossman and Thomas Mann on my bookshelf (all unopened) alongside a 1973 book on how to play the piano (also unopened) and a well-thumbed World Atlas still showing Germany as two countries. The rest of the shelf is given over to interesting beer bottles from around the world. On to the news:


• Greene King CFO Kirk Davis is to leave the company to join Restaurant Group.

• Restaurant Group reports Greene King CFO Kirk Davis is to start with the business as CFO in February 2018. Andy McCue, Chief Executive Officer, said: “Kirk’s proven skill-set and highly relevant experience position him ideally for the CFO role at The Restaurant Group. I very much look forward to welcoming Kirk to the business and to working with him.”

• Greene King reports that Richard Smothers will join the company in December this year & will join the board as CFO in February 2018. GNK reports ‘Richard joins from Mothercare plc where he has been Chief Financial Officer since March 2015. Previously, Richard was Director of Group Finance at Rexam plc from 2011. Prior to this, Richard spent 14 years in a number of senior finance roles at Tesco plc, including Finance Director for UK operations and Finance Director, Asia.’ GNK CEO Rooney Anand reports ‘I am delighted that Richard Smothers is joining us as Chief Financial Officer.’ Mr Anand adds Richard ‘is a great addition to the executive team as we seek to become Britain’s best pub company and to continue to deliver long-term growth and value to shareholders.’

• Domino’s Pizza has announced that it is to pay £24m in order to take a 75% stake in a newly-formed company that will own assets in its largest franchisee’s business. The deal will comprise 25 stores in the London area. Domino’s reports ‘the creation of the partnership will enable DPG to take advantage of the significant growth opportunity in the London area. The transaction is subject to final contract, with completion expected in September 2017.’

• JDW has announced that it yesterday bought back another 200k shares for cancellation at 1027p per share.

• DineEquity, which owns the IHOP & Applebee’s brands in the US, has appointed Stephen Joyce to the post of CEO. Joyce was previously the CEO of Choice Hotels International. DineEquity says ‘Steve has a long and proven track record of successfully leading global consumer franchised businesses.’

• The Applebee’s Neighborhood Grill & Bar has announced it will close 135 restaurants before the end of 2017, while parent company, DineEquity reports a 6.2% slide in same store sales of the brand in Q2 ended June 30. Applebee’s brand president, John Cywinski said ‘We’ll be aggressive with restaurant closures this year. These restaurants need to close and perhaps should have closed long ago’.

• BrewDog raised $7m of the targeted $50m in an equity for punks round in the US, using the crowdfunding platform Bankroll. The company released a statement commenting ‘The past year has also seen us destroy the business finance rulebooks once again through Equity for Punks USA, through which we raised an insane $7 million! Our amazing global community of shareholders now clocks in at over 55,000 Equity Punks! ’.

• The BBC reports that, despite the Manchester Arena attack in May this year, the city remains the second largest hub in the UK in terms of economic activity. Councillor John Flanagan told the broadcaster ‘businesses within the inner cordon were impacted most acutely, and we have been in conversation since the attack to support them, including business rate relief, and the Manchester Business Continuity Forum has been updating and reviewing their continuity plans.’

• Constellation Brands Inc. has announced it will acquire the Florida-based Funky Buddha Brewery, as the group aim to lead the high-end beer segment in the US. Ryan Sentz the CEO of Funky Buddha, the fastest growing craft brewery in Florida, stated ‘We chose to partner with Constellation because we saw an alignment in vision and felt they gave us the greatest opportunity for growth and development’.

• The Wendy’s Company has brought the longstanding dispute with former franchisee DavCo Restaurants LLC to a close, by purchasing 140 Wendy’s locations and selling them to another franchisee, NPC International Inc. Wendy’s stated that ‘due to the unique nature of the transactions, the Company incurred a total pre-tax loss of $43.1m and a net cash outflow, exclusive of franchise fees received, of $17.8m,’ for Q2 ended July 2, 2017.

• Chief Executive of the BBPA, Brigid Simmonds, has condemned councils’ failure to deliver rates relief, saying ‘It is deplorable that much-needed rates relief is simply not yet reaching those small businesses most in need, as the Government intends’.


• Though somewhat historic, Monarch has commented (via lodgings at Companies House) on the UK outbound leisure market.

• Monarch Airlines reports FY numbers to end-Oct 2016. The group says that it generated a pre-exceptional profit of £12.9m for the year (versus £39.3m)

• Monarch announces post exceptional costs loss of £291.1, (2015: profit £26.9m) as a result of costs including £198m for ‘onerous contracts’ and £103m for aircraft impairments. The group now has negative shareholders’ funds of £313m (2015: negative £118m).

• Monarch says less-good trading ‘reflects the pressures from terrorism’. It quotes a number of ‘trading headwinds’ such as the closure of Sharm as a destination & terrorist incidents in Turkey.

• Monarch saw ‘depressed bookings in the run up and immediately after the result for Britain to leave the EU’. Monarch says ‘increased capacity given the headwinds…have driven average seat yields year on year down’.

• Re current trading, Monarch says it has implemented a turnaround plan but it says that it operates in a ‘highly competitive UK outbound leisure market’. It says ‘yield pressure has continued through 2017’. The group has hired consultants to advise it on the best size for its fleet.

• Travel agents are being urged to inform potential tourists about laws in Thailand that prohibit e-cigs being brought into the country. Advice from the Foreign Office website states ‘These items are likely to be confiscated and you could be fined or sent to prison for up to 10 years if convicted’.

• Despite the UK Foreign Office lifting its advice against all travel to Tunisia, Tui Group has stated that it has no immediate plans to return to the country. Chief Executive for the group, Fritz Joussen said that a return to Tunisia ‘depends heavily on demand, if people want to go and the Foreign Office thinks it is safe. We have made no decisions on this yet. Whether we put up a programme is not decided’.

• AirBnB is expected to refer new laws in Spain’s Balearic Islands limiting flat rentals to the European Union

• The Hotel Bulletin has reported that rooms are being added in the UK at the fastest rate in 5yrs.

• Bed bank Betabeds is to cease trading after 19mths in business. The company reports ‘following the purchase and takeover of Alpharooms last year by Truly Travel ltd. the decision has been taken to close down the B2B trade arm of the business known as Betabeds in order to focus on our direct b2c strategy.’

• A Thomas Cook holidaymaker has had her case thrown out of court for being ‘neither plausible nor credible.’ The customer claimed she fell ill after eating undercooked chicken in Sharm el-Sheik but her social media posts showed her enjoying herself at the time. The customer was ordered to pay £2,812 and is unable to appeal the decision.

• Passenger traffic growth in the airline industry was the highest in 12 years for the first half of the year. Global air traffic increased by 7.9% up to the end of June with a record load factor of 80.7%, according to IATA. The increases have been attributed to improved global economic conditions and lower airfares driven by competition. IATA’s director general, Alexandre de Juniac, said ‘we still expect 2017 to see above-trend growth.’


• Snap shares fell 14% on Thursday as the group reported a quarterly loss of $400m and fewer than expected sign ups. The social media firm has 173m daily users, an increase of 4% quarterly.

• Charrington Bowl has been renovated into Hollywood Bowl Tolworth this month, with £500,000 invested into the refurbishment. The 32,000 sq ft site has been completed just in time for Hollywood Bowl’s key operating period.

• Bali Padda, CEO of Lego, has been replaced after just 8 months in the job with both parties accepting it had been a temporary role due to his age. 51 year old Niels Christiansen, former boss of Danoss, will become the new CEO.


• UK industrial production fell in Q2 per the ONS. Industrial production overall fell by 0.4% with manufacturing down by 0.6%. Despite the drop in Sterling, this was largely as a result of a decline in car production.

• ONS reports car production down 6.7% from May to June, the sharpest drop in four years.

• Construction output down in Q2 by 1.3% reports the ONS.

• GDP targets under threat. ONS had used a 1.8% increase in construction output in order to build its case. The June figure was minus 0.1%.

• UK trade deficit worsened in June to £12.7bn (from £11.3bn in May). The EY Item Club reports ‘with sterling’s deprecation and a healthy world economy supporting exporters, one would hope that the gap between the two will narrow in a favourable direction. That said, there was little sign of this in June’s trade numbers.’ EY goes on to say ‘a fall in exports and rise in imports caused the monthly trade deficit to nearly double.’ It says ‘evidence of rebalancing, at least in the ‘hard’ data, remains absent.’

• UK shares suffer worst day in four months on back of weak house builders, North Korea fears & ex-dividends.

• Oil down to $51.44

• Sterling a shade stronger vs dollar at $1.2991

• Pound down vs Euro at €1.1033

• UK 10yr gilt yields down on low / no growth concerns to 1.08%

• World markets: UK, Europe & US markets down yesterday. Far East down in Friday trading


• Later tweets: Adnams reports ‘the future is never certain, but businesses benefit from calm conditions’. Calls for Brexit clarity

• Former David Davis Chief of Staff James Chapman has said that Brexit ‘is the biggest calamity for our country since WW2’.

• House price slowdown extends other regions within the S East reports RICS. Fewer moving house, list prices being challenged.

• DFS updates on ‘a very challenging market’ as big ticket continues to take the brunt of the consumer slowdown.

• LfL sales said to be strongly negative at some London casual dining units. Is this a) untrue, b) tough comps, c) something worse?

• Sharply negative casual dining LfLs in London? Actions >> words. Look at no. of sites becoming available. Reverse premiums now a real thing


• BDO High Street Sales Tracker: We flagged on Wednesday that John Lewis had a good start to August/H2 in Fashion last week, thanks to the autumnal weather, and today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains flags that the High Street returned to form somewhat in w/e Aug 6th, with Fashion Store LFL sales up by 1.3%. Including Homewares and Lifestyle chains, total Store LFL sales were up by 1.7% last week, but overall Online sales smashed it out of the park, up by as much as 31.5% (against very strong 32% growth a year ago).

• Trade Press: The front cover of Retail Week magazine today flags up a feature on “Why Heron could be a flyer for B&M” and “The £152m deal that will kick-start the value giant’s assault on convenience”. RW’s Retail tour of the UK continues to the North-East, via a feature on the City of Culture, aka Hull, and there is also a feature on whether American Eagle will be the last US retailer to leave UK shores and a column by ex-Asda boss Andy Clarke on why “Regulation hasn’t kept up with grocery”. In terms of News stories, RW focuses on the news that New Look has reported further steep falls in Q1 sales and profits (which boss Anders Kristiansen attributed to difficult conditions in the UK) and Sainsbury’s is expected to axe more than 1,000 central office jobs (but has separately unveiled plans to hike pay for 135,000 shop floor staff). And in his column about the 2007 Financial
crisis, the Editor notes that “Ten years on, credit crunch lessons still apply” and thunders that “although retailers continue to confront uncertainty, the testing years of recession and its aftermath meant that, because it really had to show its mettle, the industry emerged stronger”.

• News Flow Next Week: As we move even further into the “dog days” of August, next week is relatively quiet, but there are a few things going on: the main focus in Food Retailing will be on what the beleaguered Asda has to say for itself on Thursday, on the back of the Q2 update from Wal-Mart. In General Retailing the recent focus on “big ticket” retailers will continue, via the interims from two of the Motor retailers, Marshalls and Lookers, on Tuesday and Wednesday respectively, followed by the Kingfisher Q2 on Thursday. And after last week’s encouraging BRC-KPMG Retail Sales figures for July, the embattled ONS will put its spin on the state of the High Street on Thursday.



Trading Statements, etc.


Upcoming results are set out below:

• 16 Aug 17  Carlsberg H1 numbers

• 17 Aug 17  Rank FY numbers

• 22 Aug 17  Hostelworld H1 numbers

• 24 Aug 17  Sportech H1 numbers

• Est. 25 Aug 17  Fulham Shore AGM

• 30 Aug 17  Gym Group H1 numbers

• 31 Aug 17  Ladbroke Coral H1 numbers

• 31 Aug 17  Restaurant Group H1 numbers

• Est. 31 Aug 17  888 Holdings H1 numbers

• 6 Sep 17  Everyman H1 results

• 8 Sep 17  Greene King AGM

• 12 Sep 17  Goals Soccer H1 numbers

• 12 Sep 17  Tasty H1 numbers

• 13 Sep 17  Gaming Realms H1 numbers

• 14 Sep 17  Bank of England MPC interest rates decision

• 15 Sep 17  JD Wetherspoon FY numbers

• 18 Sep 17  DPP H1 numbers

• 19 Sep 17  Ocado Q3

• 19-20 Sep 17  Fed interest rates’ meeting

• 20 Sep 17  Diageo AGM

• 22 Sep 17  Saga H1 numbers

• 26 Sep 17  Thomas Cook FY update

• 27 Sep 17  Hotel Chocolat FY numbers

• 27 Sep 17  Crawshaw H1 numbers

• 28 Sep 17  TUI Q4 & FY update

• 3 Oct 17  Revolution Bar Group FY numbers

• 5 Oct 17  Merlin Q3 trading update

• 10 Oct 17  Marston’s FY trading update

• 11 Oct 17  Pub Goers’ Conference, Royal Garden Hotel

• 12 Oct 17  Bank of England MPC interest rates decision

• 12 Oct 17  Carlsberg capital markets day

• 20 Oct 17  Intercon. Q3 numbers

• 31 Oct 17  Just Eat Q3 orders

• 31 Oct 17  Fed interest rates’ meeting

• 2 Nov 17  Bank of England MPC interest rates decision

• 2 Nov 17  Carlsberg Q3 numbers

• 14 Nov 17  Premier Foods H1 numbers

• 21 Nov 17  Compass Group FY numbers

• 22 Nov 17  SSP Group FY numbers

• 22 Nov 17  Thomas Cook FY numbers

• 24 Nov 17  Fuller’s H1 numbers

• 28 Nov 17  Cranswick H1

• 29 Nov 17  Britvic FY numbers

• Est. 29 Nov 17  Patisserie Valerie FY numbers

• Est. 29 Nov 17  EasyHotel FY numbers

• 30 Nov 17  Greene King H1 numbers

• 30 Nov 17  Marston’s FY numbers

• 12-13 Dec 17  Fed interest rates’ meeting

• 14 Dec 17  Bank of England MPC interest rates decision

• 14 Dec 17  Ocado Q4

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