Langton Capital – 2017-08-21 – Punch, JDW, Gfinity, credit, exports, Brexit & other:
Punch, JDW, Gfinity, credit, exports, Brexit & other: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: • JD Wetherspoon has announced that it bought back 210k of its own shares at 1050p per share for cancellation on Friday • McDonald’s is facing its first strikes in the UK since it began operating in the country. Two of its UK outlets have voted to take industrial action in protest against the use of zero hours contracts and claims of workplace bullying. The Dartford & Cambridge units were balloted in a move that could see workers walk out. McDonald’s reports ‘a small number of our employees representing less than 0.01pc of our workforce are intending to strike in two of our restaurant.’ It says ‘as per the terms of the ballot, the dispute is solely related to our internal grievance procedures.’ • Wasabi has blamed rising salmon prices as the reason for a fall in its pre-tax profits tumbling from £2m to £769,598 last year. The operator says ‘unlike many businesses, Wasabi decided not to pass on the increased costs of salmon to our customers, preferring instead to absorb the additional costs ourselves’. The operator says ‘the salmon wholesale market is notoriously volatile but we are very confident that Wasabi is in excellent shape to ride out any future price fluctuations during the remainder of 2017.’ • Punch reported on Friday that, post the announcement by the UK Competition and Markets Authority that it has accepted undertakings offered by Heineken UK, the merger control Condition to the Scheme has now been satisfied. Punch expects to see its shares delisted on 25 August with cheques sent to disposing shareholders by 7 September. • YouGov has reported that 15% of Brits predominantly stay in when having a drink. The over-55s as the most likely to avoid drinking out. • The Sunday Times has suggested that a boom in cheap loans provided by the Bank of England to retail banks is fuelling Britain’s consumer debt bubble. The cash has funded a surge in credit card lending and in unsecured personal loans. • The ALMR has commented on the first anniversary of the launch of the night tube in London saying ‘the launch of the night tube not only gave confidence to the sector that London was serious about helping the night time economy, it also provided a welcome boon for customers, employers and employees working in late night venues. When business rates, employment costs and foodservice inflation are increasing pressures on eating and drinking out venues, the night tube has provided a positive chance for growth.’ • The ALMR continues ‘the importance of strong trading around the clock cannot be understated – day time and night time licensed venues support each other and the surrounding retail outlets as well. These all add up to being massive drivers in the capital’s economy.’ • SIBA has named Brew York and Rooster’s as the best independent craft brewers in the North East • Exports of UK alcohol saw strong growth in the first half of 2017 per the HMRC. Beer and whisky sales have been particularly strong. • Exports of Cognac have risen for the third year running reports the Bureau National Interprofessionnel du Cognac • The Grocer reports ‘water takes lead over cola as sugary soft drinks shunned’. It says British shoppers bought 1.77 billion litres of plain water in the 52 weeks to 15 July 2017 – passing cola at 1.72 billion litres HOLIDAYS, LEISURE TRAVEL & HOTEL: • Florida has reported a surge in tourist visitors in H1 this year reports Visit Florida. The US state recorded 60.7 million visitors in the first six months this year. • The UK government intends to retain visa-free travel to the UK for EU visitors post-Brexit reports the BBC. • American tourists are said by The Daily Mail to be ‘pouring into Britain on an historic spending spree as a result of the pound’s slump since June last year’. Spending by Americans is said to be up 70% in H1 this year. OTHER LEISURE: • Esports company Gfinity has announces a partnership with Formula 1 saying that ‘it has been appointed as esports partner for Formula 1 to deliver the Formula 1 ESports Series commencing in September 2017.’ The operator says ‘the competition will see gamers across the world compete to become the best virtual Formula 1 driver. The series marks the first year of the annual competition highlighting the sport’s long-term investment in esports and gaming.’ • Gfinity reports its partnership ‘brings an opportunity for Formula 1 to reach the core esports fan base, further enhancing its growing popularity within this demographic. It also highlights Gfinity’s ability to deliver on one arm of its pre-stated strategy, to leverage its esports expertise and market leading technology to support prestigious organisations in delivering their global esports programmes. This complements the delivery of Gfinity’s own competitions, including the Elite Series which successfully launched in UK in July 2017.’ • CEO of Gfinity Neville Upton comments ‘Formula 1 entering esports is a powerful endorsement to how vital it is for cutting edge organisations to consider esports in their digital offering in order to reach the elusive and lucrative millennial fanbase. Gfinity has developed a unique & proprietary technical platform, which coupled with our in depth experience enable us to deliver a world-class turn key solution for our global partners. We’re very much looking forward to working with Formula 1® on this exciting project.’ • Alibaba’s Q2 profits have risen by 96% to $2.07bn. FINANCE & MARKETS: • A group formerly called Economists for Brexit has said that leaving Europe could add £135bn a year to Britain’s economy. Import prices should fall. Whether UK industry could cope with such competition is another matter. The economists say ‘Hard Brexit is good for the UK economically while soft Brexit leaves us as badly off as before…hard is economically much superior to soft.’ Open Britain has said that the comments are ‘absurd’. • Dublin and Frankfurt are reported by Reuters to be continuing the push to migrate finance jobs from the UK to Europe • Rightmove has said that hous prices fell by 0.9% in August on a month-on-month basis. • Oil up to $52.64 • Sterling down vs dollar at $1.2876 • Pound down versus Euro at Euro 1.0956 • UK 10yr gilt yield down 1bp at 1.09% • World markets: UK, Europe & US down on Friday with Asia mostly down in Monday trade RETAIL NEWS WITH NICK BUBB:
• Saturday Press: The Retail cupboard was fairly bare in Saturday’s papers, although the FT had an interesting article about the troubled Motor Retail sector, focusing on the support from new car finance deals (“Car dealers pin hopes on credit contracts as sales go into reverse”). And the News pages of the Daily Mail flagged that a new study has shown that 20% of all shoppers will mistakenly pick up a lookalike own-brand when it is on the same shelf as the branded product…The FT market report highlighted some big trades going through in Debenhams on Friday, as the share price hit yet another new low, whilst the market report page in the Times picked up on the very disappointing Q2 results from Footlocker in the US on Friday (which seemed to hit JD Sports in sympathy…): “Investors give Foot Locker a kicking as sales slump”. And we noticed the widely followed Tyler Brûlé “Fast Lane”
• Sunday Press: Plenty of Retail stuff in today’s papers, with the most interesting revelation the Sunday Telegraph story that the boss of ASOS, Nick Beighton, has joined forces with Anders Kristiansen of New Look to speak out against the poor working conditions in UK clothing manufacturing, particularly in Leicester (“a ticking time bomb”). On a different tack, the Sunday Times flagged that vulture funds are trying to buy up the debt of the struggling New Look, gambling that the South African parent will have to inject more equity into the business. On a happier note, the News pages of the Observer had a feature on the arrival in London of H&M’s 2 new fashion brands, Weekday and Arket (“It’s fashion without a capital F”). In terms of feature interviews, the Sunday Telegraph profiled Dominic Paul, the new boss of Costa Coffee (he wants the chain to be “famous for innovating”) and • The Grocer Watch: The widely followed Grocer “33” weekly supermarket pricing survey in Saturday’s The Grocer magazine saw a narrow win for Tesco, as their £58.49 basket came in 56p cheaper than Morrisons. Asda was only third, on £60.25, with Sainsbury just behind on £60.38. Poor old Waitrose was a long way off the pace, yet again, on £65.06. The separate regular Grocer “Mystery Shopper” weekly survey on Store Service and Availability was won by Morrisons, as its 35,000 sq ft store in Shrewsbury came top, scoring 84 out of 100. The Asda store in Sutton, in south London, came bottom of the survey, scoring only 50 overall (with zero for stock availability). The Grocer also had a preview of this year’s “Grocer Cup” (which is voted for by their readers), with profiles of the 10 industry leaders on the short list (including a bearded Dave Lewis of Tesco). • Restaurant Watch: On the back of the July survey of pub and restaurant sales, the Coffer Peach Tracker, on Friday we flagged that LFL sales are pretty flat, notwithstanding the pace of new openings. And on the back of that, we noticed that the Gadfly column on Bloomberg thundered that “Britain has too many restaurants”, noting that “while Brits haven’t stopped heading out to eat yet, the industry’s problem is that there are too many destinations to choose from” and “this is an industry with a lot on its plate”. • News Flow This Week: As we head towards the Bank Holiday weekend, things are quiet this week, but we get the latest Kantar/Nielsen grocery sales data tomorrow (for the 4/12 weeks to Aug 14th/15th) and the Laura Ashley finals on Wednesday, whilst the CBI Distributive Trades survey for “August” will be published on Thursday. And out in the US the GameStop Q2 results will be worth a look on Thursday afternoon. |
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