Langton Capital – 2018-02-13 – Heineken, UK F&D Exports, TUI and Others:
Heineken, UK F&D Exports, TUI and Others:
A DAY IN THE LIFE:
I think it’s more than a coincidence that we’ve been getting lots of offers on new cars ‘at cost’ and clearance sale details on furniture through the post recently.
Because furniture is tough and car sales have been under pressure for a year or more but, if Toyota, Land Rover and others have finally got around to ‘Brumby’ on their list of potential customers (i.e. they’re now targeting a family of known tightwads, even by Yorkshire standards) then things must be dire.
Of course, it gives me the opportunity to reopen discussions on the size of previous repair and MOT bills but that’s water under the bridge and some operators will be finding themselves in a tight spot before too long and that’s for sure. On to the news:
PUB, RESTAURANT & DRINK PRODUCERS:
• Heineken maintained the mid-single-digit increase in sales recorded in its first half and has reported a 5% rise in sales for 2017. In value terms, Africa, Middle East & Eastern Europe reporting region stood out, posting a 13.5% leap in sales. Asia Pacific was up 6.2% in the year, with The Americas just behind on +6%. Europe inched up 1.4%. The Asia Pacific region also led the pack in terms of volume (+8.9%), followed by EMEA (+4.8%). The Americas posted a 3.3% volumes lift, while Europe came in flat.
• Convenience store ‘grab and go’ sections and sandwich/bakery retailers are expected to lead growth in the food to go market over the next three years, per MCA’s Food to Go Market Report. According to the study, the food to go market is set to expand by 2.8% to a value of £20.7bn in 2018, compared to 1.5% growth in eating out overall, and is expected to grow at around 3.5% a year for the next three years.
• Shoppers are expected to shell out some £650m on gifts this Valentine’s Day (14 February), according to figures from Mintel — up 5% on last year.
• Last week’s Super Bowl boosted ETM’s bar, Greenwood, LfL sales by 48%, serving nearly 3000 pints and over 1000 burgers.
• 2 Sisters Food Group is restructuring its scandal-hit poultry business, with three factories and nine hundred jobs facing the axe. The Ranjit Singh-owned business says it will create up to 1,000 new roles in its supply chain following the cuts.
• Defra has announced that UK food and drink exports have hit record highs of £22bn in 2017, an increase of more than £2bn.
• Scotch whisky exports grew in both volume (+1.6%) and value (+8.9%) in 2017 to a record-breaking total of £4.36bn, accounting for over 20% of all UK food and drink exports for the year. Single malt remains in demand and it grew in value by 14.2% to £1.17bn. Karen Betts, CEO of the Scotch Whisky Association, said: ‘Already a strong export, loved for its sophistication, diversity and provenance, it’s great to see Scotch continuing to grow in established and new markets. Scotch Whisky is not just a core part of Scotland’s national identity and heritage, it is also a fundamental part of our export economy.’
• British gin exports have increased 12% in value to £530m meaning exports have more than doubled since 2008. The USA is the largest importer of British gin, however by region the EU leads the way accounting for 16% of UK gin exports.
• Leon has stated that it intends to open a further 20 stores in Europe and the Middle East through its partnership with HMSHost International, the MCA has reported. The group has already opened nine sites with the American highway and airport food-service company.
• Vianet has launched a new and improved app for its iDraught beer quality and waste management system. The new app offers an improved user experience and features push notifications and alerts alongside simple, visual reporting of issues that allows operators to act in real time and minimise business disruption.
• The MCA has reported that Abokado were the contemporary fast-food chain to have increased prices of same-line dishes by the most over the last year. The Asian grab and go chain upped prices at an average of 17%, though this is from relatively low initial price points.
• The MCA also found that the restaurant chain to have raised prices the most was Thai Square, increasing its same-line dishes by an average of 13%.
• The casual dinner that was found to have lowered prices by the most over the last year was Strada, with an average price reduction of 7%. Frankie and Benny’s has been revealed to have reduced prices by an average of 4% since the same time last year.
• Red’s True Barbecue is closing down its London site in Shoreditch, which it opened in July 2015 after investing some £1.4m, so that it might ‘consolidate efforts in the regions’.
• Brewhouse & Kitchen has opened its 18th brewpub and its first in Wales near Cardiff city centre.
HOLIDAYS & LEISURE TRAVEL:
• TUI has reported a Q1 turnover increase of 9% to €3581m stating that current trading is in line with expectations and the group is well positioned to deliver at least 10% underlying EBITA growth in FY18.
• Spectrum of the Seas, Royal Caribbean’s new Quantum Plus-class ship, will not be taken to the UK as was expected next year, but instead is ‘still looking at options to increase ex-UK deployment in 2019’. CEO Michael Bayley cited the UK’s decision to leave the EU as the reason for the change of heart.
• Heathrow reported passengers numbers up 1.1% for January to 5.8m, making it the airport’s busiest-ever January and 15th consecutive record month.
• An inquiry into the decision to end the East Coast Mainline rail franchise early has been announced by the House of Commons transport committee. Last week, transport secretary Chris Grayling said Stagecoach and Virgin would have to withdraw from the franchise agreement ‘within months’ after the companies revealed that operating the line would cost them ‘hundreds of millions of pounds’.
• CEO of Ryanair, Michael O’Leary, said British shareholders may be forced to sell to avoid the airline being grounded post Brexit. Under EU rules, Ryanair must show regulators that the majority of investors at the Irish airline are EU citizens. The Sunday Times says that 56% of shareholders are European, but that 20% are from the UK.
• The removal of a 500kg WW2 bomb in George V Dock which closed London City Airport was underway last night. If the attempt to remove the device is successful all flights will run as normal on Tuesday, the airport said.
• London hotels have reported a 15th consecutive month of ADR growth in January with an increase of 1.3% to £29.23. Occupancy levels fell 0.9% to 69.8% and RevPAR rose 0.3% to £90.21.
• Preliminary US lodging data for January 2018 shows RevPAR growth of 2-4%, ADR growth of 1-3% and a 0-2% growth in occupancy.
• Gfinity, the esports entertainment group, has announced that UNILAD Esports is to take up a place in the group’s third season of the Gfinity Elite Series in March and April 2018.
• Langton is between offices. There is some light at the end of the tunnel but, for the moment, please communicate via email. MIFID II is now in operation.
START THE DAY WITH A SONG:
Yesterday’s song was Waterfall by The Stone Roses. But today who sang:
Don’t play him cheap ’cause you know he ain’t shy,
RETAIL NEWS WITH NICK BUBB:
• Footasylum: This afternoon Footasylum are holding an analyst’s “teach-in”, ahead of its year end at the end of the month, but, in that deathless phrase, “no material new information will be disclosed”. Despite a decent Christmas trading update, the shares have been as flat as a pancake since the IPO at the beginning of November, so the company will be hoping it can turn a few heads today
• Pendragon; We were expecting the Pendragon finals tomorrow, but the motor dealer has lifted the suspense and come out with its results today and this is another management team that could do with giving its shares a boost, as the price has slumped recently to c20p. Fortunately, Trevor Finn, the veteran Chief Executive, is able to say “The Group has a clear focus and direction to transform the business and double used car revenue by 2021…We anticipate our performance in 2018 to be in line with expectations” and the sale of the US business appears to be on track.