Langton Capital – 2017-10-04 – Seedrs, Flight Club, JW Lees, discounts, Monarch & other:
Vianet, Seedrs, Flight Club, discounts, Monarch & other:
A DAY IN THE LIFE:
I know MS Word on my laptop and the predictive text genie on my phone are trying to be helpful but I find it somewhat annoying that they both take it upon themselves to change some of my words or add letters where they shouldn’t be added.
And, though MS Word has been changing IHS Markit to HIS market over the last couple of days, it’s my phone that’s driving me mad because it adds whole words onto others and I don’t know why it’s doing it.
I mean I was asking whether I should bring a mozzie plug down to London (we’ve have the odd mozzie knocking around, presumably drunk on fumes but still somehow managing to survive in central London) and it came out as mozzarella, which sounded a bit odd.
I mean who needs more mozzarella to help them sleep at night and it spots words at the end of other words so spin might become spinto, bribe might become bribecause etc. which all adds to the confusion and it’s not as though I don’t find it difficult enough to communicate at the best of times. On to the news:
LANGTON RESEARCH, GET IT WHILE IT’S HOT @ £200 + VAT:
Headings include Why the Increase in Supply, evidence of oversupply, consequences of oversupply with a case study comprising a City of London walk.
It’s an easy (if at times queasy) read & if you’d like a copy at £200 + VAT (in money, beer or pizza subject to negotiation), then please drop us a line.
PUB, RESTAURANT & DRINK PRODUCERS:
• Vianet has announced the purchase of Vendman Systems ‘a leading Enterprise Resource Planning & mobile software provider for unattended retailing, for a total consideration (including an earn out), of up to £4.25 million, payable in cash.’
• Vianet reports that ‘Vendman…develops, manages, and supports integrated software and mobile applications for the unattended retailing industry.’ That’s vending machines.
• Vianet is paying £2m up front with an earn-out of up to another £2.25m. Vianet reports ‘Vendman is a highly complementary fit with Vianet’s existing business and has successfully partnered with Vianet’s Smart Machines division, where we have introduced our IOT (internet of things) connectivity and contactless payment solutions to Vendman customers.’
• Vianet CEO Stewart Darling comments ‘we are delighted to announce this significant strategic acquisition of a valued existing partner, and we look forward to accelerating business growth.’ Chairman James Dickson says ‘this is an important acquisition which greatly advances our strategy for growth and is a hugely complementary fit for our business on several fronts and takes it to the next level.’
• Flight Club Darts, co-founded by Adam Breeden, has delivered accounts to Companies House for the year to 1 Jan 2017.
• Flight Club need only lodge balance sheets but its shareholders’ funds have fallen by £166k suggesting that the group made a loss in the year. The group has reported £589k of losses since incorporation.
• Flight Club had cash at hand of £897k on 1 Jan 2017. In addition, the directors report that ‘the initial losses shown within these financial statements were fully expected as the company established itself and were allowed for within the equity raise stages and agreed debt facilities. The company has traded profitably in the post balance sheet period and the directors are confident that there are sufficient liquid assets available to continue to meet all liabilities as they fall due.’
• Seedrs, the loss-making disruptive funding operator, has closed a £6m funding round. The group raised £4m from Woodford Investment last month. The fund raise values Seedrs at £50m. Some 2,000 existing shareholders and new customers, from 35 countries, invested during the 5dy campaign.
• Seedrs CEO Jeff Kelisky comments ‘we are delighted to have received over £6m investment from over 2,000 of our customers and community. It was highly important to us that we could open up as much as possible for our existing investor base, and this sum, combined with Woodford’s investment of £4m earlier this month takes us to £10m.’
• Seedrs’ Mr Kelisky continues ‘this round is yet more evidence of the market’s conviction that Seedrs is on the right path to delivering shareholder value by opening venture capital opportunities to retail investors for fast growth companies – and without Seedrs having pioneered regulated equity investment, these opportunities would have remained closed to them.’
• Seedrs’ high profile shareholder Andy Murray has followed his money in this latest round of funding.
• Per MCA, the CEO of Jamie Oliver’s restaurant empire, Simon Blagden, has stepped down. Jon Knight, MD of Jamie’s Italian International, will take on Blagden’s responsibilities.
• Just Drinks reports that coffee’s recent growth rates suggests coffee’s threat to soft drinks and bottled water appears to be receding. Volumes have grown just 3% in Western Europe over the last 10 years. Just Drinks claims Western European’s now demand higher quality coffee, not higher volumes.
• The ALMR has supported Hartlepool’s decision not to introduce an Early Morning Restriction Order
• Brewery, JW Lees has recorded a 5.6% increase in turnover reaching £67.7m, for the year ending March 31st 2017. The group purchased six new freehold pubs and hotels, and refurbished 72 sites, resulting in the group reporting an operating profit decline of 13.2% to £869,000.
• The BBPA has launched an infographic campaign on social media, in order to garner support to cut beer duty in the budget on 22nd November. Chief Executive of the organisation, Brigid Simmonds said: ‘Government plans for further beer tax rises are unsustainable, and showing MPs the scale of concern in their own constituencies is essential if we are to persuade them to make this issue a priority.’
• Foodstars, a commercial kitchen rental company has opened its fourth site in shoreditch, were caterers can test recipes, food delivery and menu development.
• Chief Executive of Prezzo, Jon Hendry-Pickup, has told the MCA that the group will be ‘extremely selective’ with site selection for future sites. The group plans to open another 6-10 sites this year compared to 21 last year.
• KKR’s Selecta Group has announced that it will acquire the Italian vending and coffee service provider from Motion Equity Partners.
• Coca-Cola has announced that it will acquire the Mexican bottled water brand, Topo Chico.
• Pret A Manger has announced that it will open a third Veggie store in Exmouth Market, London.
• US diner chain Denny’s will attempt another UK launch after signing a franchise deal with former Pizza Hut franchisee Leon Esfahani to open sites in Wales, per MCA. The 2,100-strong group is also advertising for area licensee managers across the UK.
• The old pound coins will cease to be legal tender on 15 October and businesses will be under no obligation to accept them from customers.
HOLIDAYS, LEISURE TRAVEL & HOTEL:
• CEO of dnata Travel B2C, Andy Washington, has hit out at airlines profiteering off the back of Monarch’s collapse. Washington said half term prices were ‘£1,300 pounds more than what customers would have paid for their Monarch flights’ and continued ‘Whilst I understand supply and demand, cashing in on customers’ misfortune is disappointing to see from an industry which usually comes together in times of crisis.’ Travel Weekly reported another operator saying ‘EasyJet and Ryanair quadrupled their prices in space of four hours between 6am and 10am and they are continuing to rise.’
• The UK government is set to pay £60m to repatriate 110,000 stranded Monarch passengers left overseas. The CAA will charter more than 30 aircraft to complete the job.
• TravelClick’s latest North American Hospitality Review has said that heading into Q4, US hotel trading is showing healthy gains despite small falls in average daily rate and booking volumes. ADR is down 0.5% in Q3 with volume down 0.2%.
• TravelClick says ‘over the past 60 days, there has been a noticeable increase in advance reservation pace, lasting well into 2018.’ It says ‘this uptick is welcomed news for hoteliers who have endured inconsistency throughout most of 2017. With ADR up 1.0 percent and bookings up 3.8 percent in the fourth quarter across all travel segments – in fact, bookings are up 6.2 percent for transient leisure travel in particular that quarter – this is encouraging data to round out the year.’
• Ryanair saw traffic growth of 10% yoy in September despite being embroiled in rounds of cancellations.
• At the International Astronautical Congress, Elon Musk announced his vision of using rockets to transport anyone around the world in under an hour for the same cost as a traditional flight. Travelling from New York to London would take 29 minutes, and London to Sydney 51 minutes.
• Accorhotels has agreed to acquire Gekko, a travel hotel reservation platform. The platform is connected to more than 500,000 hotels worldwide and currently operates in France, Belgium, Spain & Portugal.
• Wyndham has completed its acquisition of AmericInn, adding 200 hotels and nearly 12,000 rooms to its North American portfolio of 8,100 hotels. Nasir Raja was appointed to SVP to oversee AmericInn’s daily operations, according to the company’s release.
• RMT union members at Southern, Merseyrail, Arriva Rail North and Greater Anglia have begun strikes across England, causing widespread disruption. The strike is over the axing of guards on trains and Aslef are due to join the strike on Thursday, disrupting the London underground.
• The EU commission may charge online giant Amazon a bill for hundreds of millions of euros for a ‘sweetheart’ tax deal it did with Luxembourg.
FINANCE & MARKETS:
• UK construction activity declines in Sept per IHS Markit PMI. First fall in 13mths. Index comes in at 48.1 vs 51.1 in August.
• UK construction PMI of 48.1 for Sept undershot estimates of 50.8. Numbers below 50.0 imply contraction.
• UK construction sees “steep” fall in civil engineering work. Markit reports ‘fragile client confidence and reduced tender opportunities meant that growth expectations across the UK construction sector are… among the weakest for four-and-a-half years.’
• UK construction facing cost pressures ‘driven by supply bottlenecks and rising prices for imported materials’ reports Markit.
• EY Item Club comments ‘there is the particular concern that potential clients will be cautious over committing to major projects if economic, political and Brexit uncertainties remain elevated over the coming months.’ It continues ‘construction companies will be hoping that recent government measures aimed at boosting infrastructure and housebuilding have a material beneficial impact.’
• Oil down 15c or so at $55.74
• Sterling a shade higher vs dollar at $1.3261
• Pound down vs Euro at €1.1269
• UK 10yr gilt yield 1.36%, up 3bps on yesterday
• World markets: UK, Europe & US up yesterday & Asia mostly higher in Wednesday trade
o Mrs May tells cabinet colleagues to stop squabbling and follow her
o Brexit Sec David Davis has said that the UK is ready to walk away from talks with no trade deal
o Bank of England FPC minutes suggest Brexit poses a “substantial risk” to the ability of British companies to borrow from European banks and to some clearing activity which might have to relocate from London once Brexit takes place. Further, the central bank added that the committee judged the risk of disruption to wholesale UK banking services could be larger than previously estimated.
YESTERDAY’S LATER TWEETS:
• Later tweets: RBG. September trade is ‘disappointing’. Last year LfLs +1.5%. Outlines bid options. Deltic to put up or shut up by 10 Oct.
• Gregg’s Q3 update. Group says it is seeing ‘continued good trading’. Total sales +8.6% in Q3 with LfL sales +5.0%.
• Eurozone manufacturing PMI at 79mth high. UK positive but a little below expectations.
• UK construction sector now in decline. Reading of 48.1 for Sept (51.1 in Aug) suggests contraction. Services PMI tomorrow
START THE DAY WITH A SONG:
Yesterday’s song was New Zealander Lorde with ‘Royals’. Today’s who sang:
Extreme places I didn’t know,
I broke everything new again,
Everything that I’d owned
RETAIL NEWS WITH NICK BUBB:
• Tesco: The interims from Tesco today are headlined “Turnaround firmly on track: Another half year of strong performance”, with group operating profit before exceptional items up 27% to £759m (UK up 21% to £471m) and an interim dividend of 1.0p per share (as expected) to reflect the improved performance and Board confidence. UK LFL sales growth was 2.1% in Q2 and Tesco highlight the 1.6% LFL sales growth in the UK Extra hypermarket format in the first half. CEO Dave Lewis says “All of this is possible because of the focus we have placed on serving shoppers a little better every day. Our offer is more competitive and more customers are shopping at Tesco”.
• Topps Tiles : After the surprisingly upbeat trading update from ScS yesterday comes a downbeat pre-close update from Topps Tiles, even though you’d have thought that selling tiles would be easier in the current climate for “big ticket” spending than selling sofas…LFL revenues in the 13 weeks ended 30 September fell by 3.0% and the company says “Whilst we have seen a moderate improvement in trading in our final quarter, market conditions remain challenging and the Group expects adjusted pre-tax profits for the 52 week period ended 30 September 2017 will be at the lower end of the current range of market expectations”. CEO Matt Williams says “we are taking a prudent view on market conditions for the year ahead” and about the only good news is that Topps is making some progress with its push into the commercial tile market and promises an update with the finals on Nov 28th.
• McColl’s Retail Group: The convenience store retailer McColl’s has announced today that the veteran James Lancaster, the co-founder and non-executive Director, has stepped down from the Board with immediate effect. There is no mention of it in the statement, but he has been rumoured to be fronting up the rescue bid for the struggling wholesaler Palmer & Harvey and so has presumably stepped down to avoid any conflict of interest.
• John Lewis Partnership Sales Watch: Yesterday’s sales figures for last week for JLP revealed that, after a good run, John Lewis found the going a bit tougher, with sales 1.9% down in gross terms (c4% down LFL) in w/e Sept 30th, against a much tougher comp. Fashion sales were down by 1.8% gross (despite a 7% rise in Beauty sales) and Home was down by 5.1% gross, but Electricals were up 1.4% gross (thanks to good Apple sales). Over the last 9 weeks John Lewis sales have been cumulatively up by nearly 2% LFL (up 4.1% gross). Apart from the tougher comps in October, it is also worth noting that the new Chelmsford store went LFL from Sept 29th, which will hold back total sales for John Lewis in Q4. Over at Waitrose sales were only up by 2.4% gross last week (c0.5% up LFL), but the business was very promotional…Over the last 9 weeks Waitrose sales have cumulatively been broadly flat LFL (up
• News Flow This Week: Tomorrow we get the DFS Furniture finals, the SMMT new car sales figures for September and the JD Sports EGM on its Sports Zone joint venture deal in Spain/Portugal. And there is then a Motorpoint trading update on Friday
• Chelmsford Watch: We flagged yesterday that the next ScS store opening will be in Chelmsford, on Boxing Day and it turns out that it will be on the new Clock Tower retail park opening at Christmas on the old Britvic drinks factory site (which closed in March 2014). As well as the usual suspects like DFS, Dunelm and Furniture Village, the 90,000 sq ft retail park will also have a Costa Coffee, an M&S Simply Food and an Aldi, so it will have something for everyone!