Langton Capital – 2018-08-14 – Discounting, easyHotel, over-tourism, gin, trading etc:
Discounting, easyHotel, over-tourism, gin, trading etc:
A DAY IN THE LIFE:
Shorts were for the brave yesterday as rain in central Germany pushed the temperature down to around 20 degrees but, as an English family, we’re no strangers to traipsing around tourist sites shivering, with goosepimples on our lily white knees and rain dripping from our noses.
Early reports: Coastal Netherlands, very pretty. A bit twee but very good overall. Magdeburg. A bit Soviet & post-industrial in parts but retains an urban charm. Berlin & Prague. Well covered in the guidebooks. Worth the trip. Dresden. Much more charming than anticipated. Nuremberg. Ditto. Heidelberg. Perhaps a bit overrated? It was raining, though. Trier, Koblenz, Metz, Maastricht to come.
Mosquitoes tying with wasps as the most detestable insect. Sterling weak. Prague cheap. Surliness, rudeness rubbing shoulders with charm & random acts of kindness because people are people, after all. On to the news:
PUBS & RESTAURANTS:
• Dog days of August & slack demand see restaurateurs up their offers. Prezzo, Belgo & Bella Italia offering 30% off, Pizza Express & Lock Fyne 25% off, Toby & Harvester offering kids for a quid & Café Rouge offering a second meal for a pound (about 40% to 45% off).
• Getting back to full price may be hard.
• Robin Rowland has been formally appointed a director of Rosa’s Thai restaurants.
• Exports of British gin have hit new records reaching £279m for the H1 this year. In 2017 some £530m worth of British gin was sold abroad.
• USA remains largest importer of British gin, with sales to worth £93m. WSTA boss Miles Beale comments ‘the global thirst for British gin continues to grow and there is no doubt that those overseas are drawn to the quality of gin made here in the UK. Gin is a quintessentially British spirit, and perfect for anyone looking to tap into Brand Britain overseas.’
• UK Hospitality has called for the scrapping of personal licence renewal in Scotland saying ‘removing the requirement for a renewal process in England and Wales has eliminated a significant administrative burden that wastes valuable time for both licence holders and councils. The deregulation has been effective in England and Wales without any adverse consequences. We are urging the Scottish Government to do the same.’
• Imbiba has confirmed press reports that it has invested in wine business Vagabond. Imbiba’s John Connell says ‘we are delighted to be working with Vagabond. Within the UK hospitality market, Vagabond is seen as a differentiated and focused business model that provides consumers with a high-quality, superior range at an accessible price point. It’s a highly scalable business with industry leading site performance metrics’.
• Carlsberg has launched its first ‘Carlsberg Cabin’ pub which uses hydro and solar power technology and has been built using only sustainable materials. Carlsberg says ‘we wanted to build an off the grid pub that allowed people in the UK to live the Danish Way and escape the busyness of daily life.’
• Alcoholic tea firm NOVELTEA has raised £306k from more than 370 investors via a crowd funding campaign.
• Sainsbury is to trial its first “till-free” store.
• Metro Bank has given oriental takeaway brand, Chopstix, a £2m debt facility that allows the 66-strong group to add a further 10 locations over the next year.
• Diageo is increasing its stake in Sichuan Shuijingfang (SJF) from 39.71% to 60%.
• The British Beer & Pub Association (BBPA) has praised a recent CBI report into the UK’s future immigration policy for its call to reform the Tier 2 visa system should it be extended to covering EU as well as non-EU nationals. BBPA CEO Brigid Simmonds added: ‘We also welcome the CBI’s call to simplify the whole immigration and visa process, so it is easier for businesses to manage in the coming years. Most pubs operate as small businesses and have a high level of staff turnover, making the current process of becoming a licensed sponsor prohibitively expensive and time consuming.’
• The Villandry ‘grand cafe’ has closed all of its sites and BDO is now acting as administrator.
• The uptake of new technology in the dairy industry has revolutionised farms, giving the sector a much needed boost. Dairy farms have begun to use technologies such as Internet of Things and robotics that have resulted in enhanced productivity.
HOLIDAYS & LEISURE TRAVEL
• EasyHotel has appointed Gary Burton as its new chief financial officer, while current CFO Marc Vieilledent takes up the role of group development director. EasyHotel has said that it will concentrate more on growing its European portfolio going forward.
• Visitors to Turkey are finding that their pounds are going further as the Turkish lira has depreciated sharply against Sterling and other mainline currencies.
• Barcelona Mayor Ada Colau has been hit with a “multitude of complaints” regarding over-tourism in the city.
• Millions of commuters will be hit with a 3.5% rise in rail fares from January. Which? Magazine has found rail firms to be the second least-trusted industry in the UK.
• Amadeus acquires Travelclick, a global hospitality solutions provider, for $1.52bn.
• The European Aviation Safety Agency (Easa) warns a contingency plan is needed in case of a no-deal Brexit to prevent flights from being grounded. The agency is currently banned from holding emergency talks with the UK.
• Manchester Airports Group reports July passenger figures up 3% on the back of the World Cup, to 59.7m passengers. Stansted saw highest growth of 7.4% to a record 2.8m passengers, with plans to invest £600m to improve the passenger experience in the airport.
• Virgin Atlantic CEO Craig Kreeger claims ‘only the border force’ can take action to resolve Heathrow passenger queue times, with the government deploying 200 extra staff to the airport this summer.
• Amadeus is to acquire TravelClick from PE firm Thoma Bravo for US$1.52 billion. Amadeus says ‘TravelClick has a great team, great technology and a broad customer base, and we are looking forward to welcoming such a successful business into Amadeus.’
FINANCE & ECONOMICS:
• Sterling level vs dollar at $1.2759 and down vs Euro at €1.1192
• Oil up a fraction at $72.80
• UK 10yr gilt yield little changed at 1.26%
START THE DAY WITH A SONG:
• Back tomorrow
RETAIL NEWS WITH NICK BUBB:
• Today’s Press and News: The row about the Sports Direct takeover of the bankrupt House of Fraser carries on in today’s papers, with the Times flagging that Mike Ashley is playing hard-ball with the embattled concession owners and suppliers (who are said to be owed £70m by the business) and is merely promising to pay them for stock sold since the takeover on Friday…And City AM and the Evening Standard, inter alia, highlight that the consultants CBRE have been brought in to review the HoF property portfolio and that landlords will learn their fate over the next few days
• Shopping Centre Watch: Poor old Intu Properties had another bad day yesterday, with the shares slumping by c6% to another new low of 160p, apparently on the back of the weal BRC-Springboard footfall figures for July (see below) and the lead story in the Times’ market report is headlined “Intu’s annus horribilis gets worse as shoppers cool off”. So we were interested to see that its downmarket peer Capital & Regional (which owns seven “community” shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green) has reported resilient first half results this morning and increased its interim dividend by 5%…
• Footfall Watch: We didn’t have time yesterday to flag up the latest monthly BRC-Springboard footfall figures that were published first thing. Helen Dickinson, the CEO of the BRC, flagged in the survey that “The hot, dry weather in July turned consumers’ attentions to eating, drinking and enjoying the outdoors. That provided a small 0.3% lift for High Street footfall as shoppers popped out to grab food, drink and fans to keep cool”. And Diane Wehrle, the Insights Director at Springboard, highlighted that “the convenience of retail parks supported their footfall in July, with summer led purchases of garden furniture and BBQ’s helping to offset poor furniture sales, helped by the increasing presence of food and beverage on parks”, with Retail Park footfall only -0.5%. But Shopping Centre footfall slumped by 3.4% in July, with centres anchored by House of Fraser and Debenhams doing
• News Flow This Week: Things are relatively quiet this week, although the Sports Direct/House of Fraser situation and the Homebase store closure plans remain a big focus. Tomorrow brings the interims from the Motor dealer Lookers, whilst on Thursday we get the Kingfisher Q2 update, the Asda Wal-Mart Q2 results and the ONS Retail Sales figures for July.