Langton Capital – 2018-06-12 – Domino’s, Poundworld, tips, delivery, bogus claims etc.:
Domino’s, Poundworld, tips, delivery, bogus claims etc.:
A DAY IN THE LIFE:
I’ve decided that buying cutlery for a dog is just one more example of hope having the capacity, however unreasonably, to overcome experience from time to time.
Because you know that the beast in question will either ignore any knives and forks presented to it or, if they smell of beef, eat them and let his guts deal with the consequences.
And, if that has happened a million times before, then no-one should arguably be surprised about the outcome.
Hence, it seems somewhat odd to waste time appealing to the reasonable side of some people’s nature because, like the caveman looking for a smartphone, he may simply not have one.
But enough of Mr Trump, let’s move onto the news:
PUB, RESTAURANT & DRINK PRODUCERS:
• Domino’s Pizza Group has announced that CFO Rachel Osborne is leaving her post as of yesterday. The group says ‘we will now commence a search for her successor and make an announcement in due course.’
• DOM chairman Stephen Hemsley says ‘we are grateful for Rachel’s hard work and commitment in helping Domino’s to continue its strong growth. We wish her every success for the future.’ DOM says ‘the Board reiterates the outlook it gave at the time of its full year results in March, and the confidence in the Company’s performance in 2018 and beyond.’
• The Restaurant Group has begun a roll out of a delivery-only concept, Burger Burger, the MCA has reported. The concept was launched from the Joe’s Kitchen under TRG’s head office in Marshalsea Road, Borough.
• England fans are expected to drink an extra 14m pints during the world cup group stages, the BBPA has announced. BBPA Chief Executive Brigid Simmonds comments: ‘When it comes to watching England at the World Cup, only being at the game itself can compare with being in the pub. Millions of England fans will be going to the pub to cheer on the team with their friends, which is both great for the local pub and great for the England team. Let’s hope the England team do us proud!’
• Poundworld is to continue operating as a potential buyer for the distressed retailer is searched for. Clare Boardman, joint administrator of Poundworld, said ‘We still believe a buyer can be found for the business or at least part of it and we are keeping staff appraised of developments as they happen. We thank all employees for their support at this difficult time’.
• Labour leader Jeremy Corbyn has been invited to meet with UKHospitality to discuss employment in the hospitality sector. If elected, Labour would seek to introduce a £10 ‘Real Living Wage’ as well as legislation to improve transparency in tipping practices.
• The BBPA responds to the House of Commons Environment, Food and Rural Affairs Select Committee inquiry on Brand Britain: Promoting and Marketing British food and drink. CEO Brigid SImmonds said ‘British beer is an export success story, but with the right support it could achieve our stated aim of increasing exports by £100 million over the next five years…British brewing is a world class industry which already exports to 120 countries around the world.’
• In the US, Starbucks raises price on brewed coffee bringing the price of a tall brewed coffee to $2.15, up from $1.95. However, the company said ‘In 97 percent of our stores, majority of the beverages such as Latte, Mocha, Tea Latte, Iced Coffee, Frappuccino, Iced Tea, Cold Brew and Nitro remain untouched’.
• Warren Geraghty has been appointed Culinary Director of rhubarb and will oversee the launch of VIVI this summer in London’s Centre Point tower as well as the group’s first international restaurant at Hudson Yards, New York.
• QCE LLC, parent of Denver-based Quinzos toasted sandwich chain, has been acquired by private equity house High Bluff Capital.
• AB InBev has pulled funding for a controversial $100m study into whether there are any health benefits associated with moderate drinking. The ten-year long clinical study, announced last year, was reported to have had the backing of five global drinks companies including Diageo, Pernod Ricard, Heineken, Carlsberg and AB InBev.
• PE house Foresight Group has invested £2.5m in Newcastle-based The Naked Deli. Leon MD John Upton will join the fledgling group as chairman.
• Property company Shaftesbury has announced that Chinatown London is to launch its first ever National Dim Sum Week. Celebrations will run from 30 June to 6 July and will raise awareness of Dumpling Legends.
HOLIDAYS & LEISURE TRAVEL:
• A holidaymaker has been found to be ‘fundamentally dishonest’ in making a false sickness claim against Tui and has been ordered to pay £10,000 with additional costs.
• American Express Global Business Travel’s takeover of Hogg Robinson Group for up to £410m has been pushed back due to the need to win formal regulatory approval. HRG yesterday issued an offer update to the London Stock Exchange saying that the deal was now expected to be completed in the third quarter of 2018.
• The UK is being outpaced by rivals with regards to tourist spending, ranked behind France and Holland. Tourist spending represented just 1.6% of the economy compared to the latter countries’ 1.7% and 1.8% respectively. The UK ranked last out of all 34 countries studied for the percentage change in tourist expenditure over the years studied, with a 9% fall from $45.5 billion to $41.5 billion.
• Hostelworld AGM sees a final dividend for the year ended 31 December 2017 of 12 eurocent per share to be paid on 14 June. Total dividend for the year will be 17.1 eurocent per share. Chairman Michael Crawley said ‘Hostelworld’s customer first focus has been enhanced by the introduction in March of a new free cancellation product which significantly improves our product offering and has resulted in growth in both volume and average value of bookings.’
• Microsoft acquires a raft of gaming studios, including Ninja Theory, Playground Games, Undead Labs and Compulsion Games. The company wants to strengthen its in-house content creation.
• Fitbit shares jumped over 12% higher in the US yesterday as observers said the co could be a takeover target.
FINANCE & MARKETS:
• The ONS has reported that manufacturing production declined by 1.4% in April, the largest fall in almost six years. The drop weakened the Pound and was seen to have postponed the chance of an interest rate rise, perhaps into next year.
• ONS data points to widespread weakness across manufacturing. It says ‘international demand continued to slow and the domestic market remained subdued.’ The ONS has reported that the UK economy grew by only 0.1% in Q1.
• The NIESR has suggested that the UK economy remains stuck in low gear with growth of only 0.2% in the 3mths to end-May. The NIESR says ‘we estimate that output expanded by just 0.2 per cent in the three months to May 2018, which is around half the potential growth rate of the economy.’
• NIESR reports ‘economic growth has slowed materially since the start of this year and it continues to remain weak.’ The NIESR points to the weather amongst other things including Brexit.
• The NIESR is looking for growth of 1.4% for the year as a whole but, with slow growth in the first 5mths of the year, this is now looking quite a stretch.
• President Trump has said that the US could end all trade with its allies. He has called tariffs on US goods ‘ridiculous and unfair’. President Trump said ‘we’re the piggy bank that everybody is robbing, and that ends.’
• Trump tweets escalate trade war. He says ‘fair trade is now to be called fool trade if it is not reciprocal.’ Mr Trump says ‘sorry, we cannot let our friends, or enemies, take advantage of us on trade anymore. We must put the American worker first!’
• The IFS has suggested that consumers aged 70 to 90 will spend only a third of their wealth and leave two thirds to their children.
• HMRC has reported that the exports of VAT registered businesses rose by 4.1% in Q1 this year compared to last.
• Sterling down at $1.3365 and €1.1354
• Oil up a little at $76.48
• UK 10yr gilt yield up 2bps at 1.41%
• World markets: UK, Europe & US up yesterday with Far East up in Tuesday trade.
• Brexit etc.:
o Mrs May attempting to head off Tory rebellion. Appealing to deep-seated feelings of loyalty to party.
o Some rebels still intending to vote against government but worried that they may bring about a General Election.
o Government starts today to attempt to overturn 14 amendments added to Bill in House of Lords aimed at softening Brexit
o Jaguar Landrover to move all Discovery production to Slovakia.
START THE DAY WITH A SONG:
Yesterday’s song was Get Lucky by Daft Punk. Today, who sang:
Yes, it was childish,
And you got aggressive
And I must admit that I was a bit scared,
But it gives me thrills to wind you up
RETAIL NEWS WITH NICK BUBB:
Boohoo: Today’s Q1 update from the fast-growing Online fashion retailer Boohoo.com (for the 13 weeks to 31 May), looks very strong, with constant currency sales up by as much as 52% (including UK growth of 49%) and gross margin up 100bps. Some may grumble that the growth is heavily skewed to the recently acquired Pretty Little Thing subsidiary (with core Boohoo only 10% up in sales) and that the company hasn’t raised its full-year guidance of 35%-40% sales growth, but Mahmud Kamani and Carol Kane, the joint CEO’s, seem upbeat: “We remain highly encouraged by our performance in the first quarter and confident of our expectations for the remainder of the year and beyond as we continue to execute on our winning strategy”.
Ted Baker: Ahead of today’s AGM, Ted Baker has issued a trading update for the 19 weeks to 9 June which makes less happy reading, even though we are told that “the group remains focused on delivering the Board’s expectations for the full year”. Retail sales were only up by 0.7%, despite 33.6% Online growth and a 5.7% increase in selling space, and Wholesale sales growth of 18.9% (in constant currency) reflected timing benefits.
News Flow This Week: The Kingfisher AGM is being held today at the Hotel Novotel in Paddington at 2pm, but no statement is expected. Tomorrow morning we get the Mulberry finals and the Marks & Spencer Autumn/Winter range preview is in the evening. Thursday then brings the Majestic Wine finals, the Morrisons AGM, the N Brown Q1 update and the ONS Retail Sales figures for May. And on Friday we get the Tesco Q1/AGM and the JD Sports EGM on its US deal. In Euroland, tomorrow brings the Inditex Q1 results and Friday brings the H&M Q2 sales update.