Fever Tree, conviviality, interest rates, Red Flags etc.:

A DAY IN THE LIFE:

Have you ever stopped to think, as you spiral out of a multi-storey car park, that every green, blue and red paint scrape on the wall tells a story?

Each one tells of a day ruined, an embarrassing conversation with the spouse, employer or garage and a degree of hassle out of all proportion to the simple task with which the episode started, namely trying to find somewhere to put your stationary car for a few hours.

Of course, you could ignore the problem caused by bumps and scrapes simply by driving around in a car covered in bumps and scrapes. It certainly works for me. On to the news:

PUB, RESTAURANT & DRINK PRODUCERS:

• Fever-Tree announces that co-founding shareholder Charles Rolls has sold 3m of his c13m shares in the company to raise in the region of £82m. An accelerated book-building exercise took place yesterday evening and this morning. After the disposal, Mr Rolls will still have around 8.6% of the company (some 9.9m shares).

•  Fever Tree said yesterday ‘the final number of Placing Shares to be placed [it was to have been 1.5m] and the price at which the Placing Shares are to be placed will be agreed by Investec and the Selling Shareholder at the close of the bookbuild process’. It announced this morning that ‘due to significant institutional demand, the Selling Shareholder has, subject to completion, sold 3,000,000 ordinary shares in the Company (the “Placing Shares”), representing approximately 2.6 per cent. of the issued share capital of Fever-Tree. The Placing Shares were placed at a price of 2,750 pence per share and were sold to institutional investors in a placing managed by Investec.’

• Fever Tree’s Mr Rolls will not be free to sell further shares for 3mths without the consent of Investec. The company itself will receive no proceeds.

• Begbies Red Flag Alert data reports a significant increase in financial distress in the restaurant industry over the past year due to subdued consumer spending and fierce promotional activity. The £5.9bn industry saw an increase of 8% yoy in the number of UK restaurants experiencing ‘Significant’ financial distress ahead of the sector’s Quarter day, bringing the total to 11,091 restaurants.

• The Red Flag Report says CVAs from companies such as Jamie’s Italian, Byron and Prezzo show that the sector has been feeling the pinch. Julie Palmer, Partner at Begbies Traynor, said ‘The UK restaurant sector is facing a perfect storm of pressures ahead of this week’s quarterly rent day, with growing labour costs from the National Living Wage, subdued consumer spending and fierce competition from established high street chains, coming together to cause a spike in financial distress across the industry.’

• Admiral Taverns appoints Ian Ronayne as managing director and David Wigham as interim commercial director. Ronayne succeeds Andy Hodgson and has experience at Molson Coors, Punch and Ei Group. Admiral says ‘David Wigham joins the Group as Interim Commercial Director, leading the Group’s commercial, sales and marketing activities. An experienced sales and operations director, David’s career spans over 17 years in the sector with his most recent roles including the posts of Operations Director and Sales, Marketing and Development Director at Punch Taverns.’ Admiral CEO Kevin Georgel says of the new hires ‘they bring with them a wealth of industry experience that will be invaluable as we continue to accelerate our ambitious growth plans, developing our position as the UK’s leading operator of community pubs.’

• Mintel reports £129bn is expected to be spent on experiential leisure activities in the UK in 2018, with activities ranging from trampolining to outdoor assault courses. Firms such as Oxygen Freejumping are expanding rapidly, currently at 10 sites but aiming to be at 20 by the end of this year. 

• EI Group yesterday bought back for cancellation another 77,896 of its own shares at 118.2p per share

• Starbucks have stated at their AGM that company has to expand its digital relationship with its customers and add more stores in China. Roz Brewer, COO of the group stated: ‘The growth of mobile order and pay has transformed how we run our stores. We want to serve the customers in the many ways that they want to interact with us’.

• Pizza Express has begun trialing sharing dishes in more than 30 of its outlets, as the group experiment with the food trend of ‘deregulated eating’. The group’s managing director of the UK and Ireland, Zoe Bowley said: ‘We have just launched what we are calling our ‘Piattini’ trial — you will still come in for your favourite pizza but you will be able to share small dishes that are in the spirit of Italian pizzerias, but actually just allow people to eat in a different way’.

• The US burger chain, Jack in the Box, has completed the sale of Qdoba (fast-casual Mexican brand) to Apollo Global Management for $305m.

• Taco Bell is to begin selling tortilla crisps in retail stores in the US.

• Retail sales rose in February by 0.8% compared to January, according to data from the ONS. This growth beat analysts expectations of 0.4%.

• Evening Standard reports that fund-raising at Conviviality may have to be done as low as 10p per share. Such a move would virtually wipe out investors who did not follow their money. The group has been talking about a modest offer to existing shareholders in addition to the placing and at the same price.

• Community butcher Crawshaw has announced that both its CEO and its CFO are to leave the company. CEO Noel Collett will ‘remain in his role until a replacement CEO is appointed to ensure an orderly hand over.’ Chairman Jim McCarthy says ‘we anticipate being in a position to announce a new CEO and CFO in the near term who will help drive the business forward.’

HOLIDAYS & LEISURE TRAVEL:

• More British people are choosing to staycations over traveling abroad, with travel and tourism growing by more than four times the rate of the wider UK economy last year, according to annual research by the World Travel & Tourism Council (WTTC). The UK’s travel and tourism sector contribution to GDP grow by 6.2% in 2017 —  higher than the global average (4.6%) and more than four times faster than the UK’s economy as a whole, which grew by 1.5%. The growth translated into £214bn contribution to GDP, four million jobs, and £29bn in exports.

• WTTC president and CEO Gloria Guevara, speaking at the publication of the report in New York, said: ‘The strong growth in UK tourism is great news not just for the sector but for the country’s economy as a whole. However, this success cannot be taken for granted. While the weak pound is certainly improving competitiveness in the short term, and driving visitor arrivals and spending, there are significant challenges in the longer-term which will need to be addressed. Most critical will be ensuring the country has a workforce which is sufficient in number and skills to support this growth.’

• Jet2holidays.com has been ranked as the highest performing tourism organisation in the latest UK Customer Satisfaction Index (UKCSI). Premier Inn, Haven Holidays, booking.com and P&O Cruises also received a score of 82 or more alongside The Trainline.com, P&O Ferries, Britanny Ferries and Jet2 in the transport sector.

• UKinbound will work with US travel agencies to bring more American tourists to the UK in a new collaboration with American Society of Travel Agents (Asta). The US is a key growth market for the UK, with over 3.45 million Americans visiting the UK in 2016, spending more than £3.354bn. Collectively they spend more than any other inbound market and are only succeeded by France in terms of visitor numbers.

• Marriott International has reported its most successful year for signing development contracts in Europe after adding 35 hotels and signing 12,000 rooms in 2017. The group now operates or franchises more than 547 properties and over 110,000 rooms in 40 countries and territories in Europe, representing nine per cent of Marriott’s global room distribution, across 23 of the company’s 30 brands.

• Hotel Indigo’s year-long conversion of the Grade II Old Shire Hall in Durham has been completed, with the hotel set to open this month. 

• STR reports Europe hotel occupancy up 2.1% to 65.5%, ADR up 2.5% to €99.87 and RevPAR up 4.7% to €65.43 for February 2018.

• STR reports US hotel occupancy up 1% to 70.7%, ADR up 2.8% to $133.76 and RevPAR up 3.9% to $94.55 for the week ending 17 March.

• UKHospitality welcomes the APPG report from a group of MPs which investigates the impacts of the sharing economy. Kate Nicholls, CEO at UKHospitality, said ‘Many online platforms are headquartered abroad and pay comparatively little UK Corporation Tax as a result.’

OTHER LEISURE:

• Per MCA, All Star Lanes is making progress on a potential site in Leeds while also preparing to close its Bayswater site. Christian Rose, Managing Director, said the group has a pipeline of six or seven sites, with three or four more in London.

• Dropbox plans to raise $7.85bn from its IPO after upping its expected price range to $18-20 per share.

FINANCE & MARKETS:

• BoE yesterday MPC voted 7-2 to hold interest rates at 0.5%. The vote had been unanimous in February.

• MPC ‘voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion.’

• The Bank has left the door open to a rate increase in May.

• BoE warns a further escalation in tariffs post President Trump’s imposition of taxes on foreign steel and aluminium could mean that its economic forecasts would need rethinking.

• A senior US official has apparently said that the EU and a number of other countries would be exempted, perhaps temporarily, from President Trump’s metals tariffs.

• Sterling down a shade at $1.411 and €1.1439

• Oil up a fraction at $69.57

• UK 10yr gilt yield down 10bps at 1.43%

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

• Brexit:

o Attention deflected to Russia. The issue, though tragic for those concerned, may have helped Putin in recent election & could be helping Mrs May in Europe currently.

o New UK blue passport to be made in France. Brexiters likely to tip more fish in the Thames in protest. Lots of blue-faced spluttering going on. Unlikely, but may have Fabrique en France stamped on it somewhere.

PRIOR DAY LATER TWEETS:

• Later tweets: Conviviality aims to raise £125m. Customers etc. ‘supportive’. Profit est. lowered. Debt to fall but w/cap. to normalise & HMRC needs paying

• What price customers expecting a rebate from Conviviality. They’re unsecured creditors but, as customers, should (repeat should) be OK

• Nielsen says meal kits growing (albeit in US). Some 9% of consumers tried them. But are they green? Delivery, plastic, waste etc.

• Meal Kits. I mean get out of the house why dontcha? Is ‘time poverty’ just the lazy man’s excuse? Watch Pixar’s Wall E for the way forward

• Brexiters tip dead fish in Thames to show they like a good day out on the river. Rees Mogg pitched up when the cameras arrived

• The Long Game. Kremlin plan? Promote Brexit, get Trump elected, discredit democracy, split the West, separate UK from herd & pick a fight?

• UK 10yr gilt yield settling down after big rise (in yield) yesterday. Rate rise likely May. Normalising the situation sounds painless, right?

START THE DAY WITH A SONG:

Yesterday’s song was Bold by Liam Gallagher. Today, who sang:

I’m moving, I’m coming

Can you hear what I hear

It’s calling you, my dear

Out of reach

RETAIL NEWS WITH NICK BUBB:

• “The Daily Retailer” is going to be on holiday now until after Easter. Nick will be back, bright and early, on Tuesday April 3rd.