Langton Capital – 2017-08-16 – Revolution, inflation, supermarket prices, Dart & other:
Revolution, inflation, supermarket prices, Dart &A DAY IN THE LIFE: Parts of Langton are on holiday. Back properly after the Bank Holiday but, for the meantime (and rural internet permitting), the email will go out in shortened form. On to the news: PUB, RESTAURANT & DRINK PRODUCERS: • The Board of Revolution Bars Group has rejected the approach from Deltic saying that ‘based on these preliminary interactions, the Board had concerns over both the value and deliverability of the combination and did not see any merit in progressing their proposal as the Board believes that a combination of Revolution and Deltic is not in the best interest of shareholders at this time.’ RBG says ‘the Company continues to engage with Stonegate Pub Company Limited in connection with the possible offer, as announced on 31 July 2017.’ • Visit Britain and Visit England have now placed links on their website to Stay in a Pub, to promote British Pubs. The two bodies have accepted that one of the top three places inbound tourists wish to visit is a British Pub. Paul Nunny, Director of Stay in a Pub, comments ‘Visit Britain has gone even further and promised to use their 22 overseas hubs to promote pub accommodation’. • JDW yesterday bought back 50k shares for cancellation at 1050p. • The CPI remained unchanged at 2.6% in July. Sterling remains around 14% below its pre-Brexit vote levels. • Supermarket promotions are at their lowest levels in 10yrs. Nearly £4bn of discounts are said to have been removed from the UK’s shelves. The IRI says around 25% fewer promotions were offered by UK retailers across 300 different categories since November 2012. • The government intends to move interest rates on student loans to 6.1% this autumn. This may dampen spending across the younger target markets. • Aldi has partnered with Instacart in the US to launch a delivery service. • Kona Grill has opened its first unit outside the US. The unit, in Monterrey, Mexico, opened this week HOLIDAYS, LEISURE TRAVEL & HOTEL: • A BDO Horizon report has suggested that transactions across the leisure sector in the UK fell by 44% in Q2 vs Q1. It says consumer confidence remains fragile. • MAG airports group has recorded record passenger numbers with 27m passengers using Manchester Airport alone in the 12mths to July • Richard Singer has been appointed managing director of Monarch Holidays and Richard Jewsbury has taken the role of chief corporate development officer of the Group as a whole • German carrier Air Berlin yesterday filed for administration. Lufthansa has confirmed it is in talks to take over parts of the group • Dart Group has reported profits down 14% after investment in bases at Birmingham and Stansted. CEO Meeson said ‘in July and September 2016, we were delighted to announce Birmingham and London Stansted airports as our 8th and 9th UK operating bases. Operations at both commenced on March 30 2017, providing customers with a combined 58 new routes to Mediterranean and Canary Island holiday destinations.’ Mr Meeson concludes ‘we believe both bases have great potential for our holiday business, further strengthening our position in the Midlands and enabling us to serve, for the first time, customers in North & East London and the East of England.’ • Regulated rail prices in the UK are to rise by up to 3.6% in the New Year • STR reports that there are 592k hotel rooms (in c4,900 hotels) in the development pipeline in the US. FINANCE & MARKETS: • IMF warns on the “dangerous trajectory” of China’s debt growth • Average home prices in the UK rose by around 1% in June per the ONS. Prices in London are declining. They fell by 0.7% between May and June • Oil $51.10 • Sterling lower at $1.2866 and 1.0954 • UK 10yr gilt up 1bp at 1.08% • World markets: UK up yesterday on lower pound. Europe up but US down. Far East mostly higher in Wednesday trade RETAIL NEWS WITH NICK BUBB: • Lookers: After yesterday’s well-received interims from the Motor retailer Marshalls, its bigger, Manchester-based, rival Lookers has reported its own interims today and, despite the recent focus on waning new car sales, the news is also good. First half sales were up 5% overall and adjusted PBT was up 18%, whilst Lookers report “a healthy order book” for the delivery of new cars in the important September month. CEO Andy Bruce says “the company is well positioned to continue its strong performance and deliver sustainable value to shareholders.” • John Lewis Partnership Sales Watch: The decent start to the second half of the financial year continued at JLP last week, according to yesterday’s figures…At John Lewis sales were up by 5.9% in gross terms (just over 4% up LFL) in w/e Aug 12th and the autumnal weather helped all three Buying departments make progress: Fashion was up 7.5% gross, Home was up 1.0% gross and Electricals were up 9.2% gross. Over the 26 weeks of the first half, John Lewis was up by 1.6% gross (broadly flat LFL). But over at Waitrose the weather in w/e Aug 12th was again not very amenable to selling picnic and barbecue fare and despite a continuing 25% off promotion on the Waitrose 1 premium range total sales were only 0.4% gross (nearly 1.5% down LFL). Over the previous 26 weeks of the first half. Waitrose was up by 1.9% gross (broadly flat LFL). • Laura Ashley: Yesterday’s profit warning from the struggling Laura Ashley hit the screens at the unusual time of 1.30pm and flagged that “as previously disclosed, trading conditions have continued to be demanding. The Board of the Company therefore expect net pre-tax profits for the year ended 30 June 2017 will now be materially below market expectations”. • News Flow This Week: Tomorrow morning brings the Kingfisher Q2 update and the ONS Retail Sales figures for July. And tomorrow afternoon brings the Asda/Wal-Mart Q2 update. |
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