Langton Capital – 2018-08-15 – Deltic, City Pub Co, Brakspeare, Coke, jobs, Turkey etc.:
Deltic, City Pub Co, Brakspeare, Coke, jobs, Turkey etc.:
A DAY IN THE LIFE:
I’d never looked the word up previously, but I’d always thought that ‘defenestration’ was a sophisticated way of implying something like ‘ruination’ or ‘the sacking / razing of’, at least when applied to a city.
But no, it apparently means ‘chucking people out of high windows’ and we’ve come across it in Prague (several occasions, most died, the lucky ones landed in dung heaps) and in Valletta (Napoleon’s men, hard stone floors & surrounding mob with pitchforks, no survivors).
Fortunately, these were historic events and we’ve been assured that nobody’s been encouraged to fly from a high ledge for some time now but, looking around at times, it certainly discouraged us from doing a runner from any of the local restaurants (other than those on the ground floor, that is).
Anyway, we were in Metz yesterday. Nice in a way but we wouldn’t rush back and we’re in Luxemburg today and Trier as well if we get a burst of energy before having to face the wave pool and water slides in the place we’re staying. On to the news:
PUBS & RESTAURANTS:
• Deltic, which owns 57 nightclubs and late-night bars across the UK, has reported numbers for the year to 24 February to Companies’ House saying that turnover rose from £102.2m to £106.5m.
• Deltic’s underlying EBITDA rose from £13.3m to £14.6m and underlying PBT was up from £6.7m to £7.7m. Reported PBT rose from a loss of £1.5m last year to a profit of £3.2m and shareholders’ funds rose from £8.9m to £9.7m.
• Deltic comments ‘the board is actively looking to grow the business through strategic acquisitions’. It adds ‘to facilitate this, we doubled the size of our property team during the period’. The group made an approach to buy Revolution Bar Group last year.
• Regarding the future, Deltic says ‘as demonstrated by the CGA Peach industry tracker, the wet-led leisure business is outperforming other sectors of the leisure industry, against a backdrop of pressures being felt by our customers’. Deltic concludes ‘the directors will maintain their focus on strategic acquisitions, targeted investments and proactive management through the year and believe that this will allow the business to continue to grow from strength to strength’.
• City Pub Co has acquired the Milkmaid Pavilion on Brighton’s promenade for an undisclosed sum. Clive Watson, Chairman of City Pub Co comments ‘Alfresco is a landmark site on Brighton’s seafront, which superbly complements our two existing pubs within Brighton. We are delighted to have acquired such a well-known and prominent site, as we continue the expansion of City Pub Group’.
• Papa John’s is to offer financial help to franchisees impacted by the row over the resignation of the group’s founder. It will cut food costs, royalties and online fees for some operators and provide marketing funds to help franchisees get their stories across to would-be customers.
• Brakspear owner J T Davies & Sons increased its turnover in the year to 31 December 2017 by 11% to £28.3m, although EBITDA fell 7% to £7.7m as a result of higher business rates and increasing labour costs. Chief executive Tom Davies said: ‘Our managed estate is developing in line with expectations, despite cost pressures impacting the 2017 result. We have recently invested in our managed operations teams and I am confident that this will lead to further improved service, sales and profitability.’
• Coca-Cola has agreed to buy a minority stake in BodyArmor, the sports drink maker backed by US basketball star Kobe Bryant, as it looks to better compete with PepsiCo’s Gatorade. Coca-Cola said BodyArmor’s sales had been doubling each year for four years. It was that growth rate that prompted Wells Fargo analysts recently to describe BodyArmor as the ‘worst nightmare’ for Gatorade and Coca-Cola’s Powerade, which together have dominated the multibillion-dollar market for sports beverages.
• The Institute of Economic Affairs has criticized any potential ‘Amazon Tax’ as a ‘tax on progress’ and believes that top-down attempts to rebalance the economy often fail. Philip Hammond and Ruth Davidson have both lent their support to an ‘Amazon tax’ — a special levy on online sales, to ‘save the British high street’. The IEA, however, says the UK has a ‘national tendency to regard the high street with a wistful, and often unmerited, affection.’
• Dallas-based Brinker International will look closer at delivery for its Chili’s Grill & Bar concept over the next year, according to company executives.
• MCA writes that Deliveroo’s Editions in Salford will come with a new virtual brand called Headless Chicken, from celebrity chef Simon Rimmer, alongside Tampopo’s East Street, Proove Neapolitan pizza and Chilli Banana.
• Carlsberg has acquired a further 25% stake in its Cambodian JV Cambrew Limited, taking its total share to 75%.
• Order-ahead app Ordoo has gone live for Epos Now’s customers to purchase and says the new integration ‘significantly enhances the experience for venue owners’. With JD Wetherspoons’ app currently leading the way, ordering ahead in pubs and bars could be a growth area.
• Peach Pubs reports LfL sales up 2.4% in 2017 with turnover of £25.6m. The company appointed BDO to assess its options earlier.
• Friends of Ham is acquired out of administration by Glentrool, a local firm in Leeds and Ilkley.
• Homebase is set to close 42 of its 241 stores via a CVA at the end of this year and early next, putting 1,500 jobs at risk.
• Mike Ashley promises to save most of House of Fraser after acquiring the department chain from administrators for £90m on Friday. ‘In a year’s time you can hold my feet to the fire on that’ the founder of Sports Direct told the Sun newspaper.
HOLIDAYS & LEISURE TRAVEL
• The fall of the Turkish lira catches out Tui, Thomas Cook and On the Beach with Tui shares losing 39p, Thomas Cook shares losing 2p and On the Beach shares down 4.1%.
• A British pensioner has complained that her holiday to Benidorm was ruined because her hotel had ‘ too many Spaniards in it’. Freda Jackson, 81, stated that Spanish people should go somewhere else for their holidays.
• Radisson Hotel Group has been acquired by a consortium led by Jin Jiang International, in a deal estimated to reach at least $2bn.
• STR data shows hotels in the US reported 190,260 rooms in construction at 1,449 properties in July 2018, up 0.8% year-on-year. In the final planning stage, the U.S. reported 1,925 properties with 223,774 rooms, a 2.1% year-over-year increase. There were 194,475 rooms at 1,809 properties in planning, a 5.8% year-over-year increase. New York once again led the way.
• Facebook has acquired video tech group Vidpresso, as the social media giant looks to develop its video offerings on its platform.
• JPJ Group has reported revenue up 10% but EBITDA down 4% y-o-y in line with expectations in the six months ended 30 June 2018. Neil Goulden, Executive Chairman, commented: ‘The first half of the year has seen a continuation of the strong momentum that JPJ Group plc has reported since listing in the UK in January 2017. Group revenue grew 10% with Average Active Customers per Month also increasing 7%, driven by good growth across our global footprint, in particular in Spain and a number of relatively new markets’.
FINANCE & ECONOMICS:
• UK unemployment fell by 65k to 1.36m in the three months to June, the lowest level in more than 49yrs.
• UK wages excluding bonuses rose by 2.7% in the year to June, down on the previous month’s number but ahead of inflation.
• ONS stats suggest EU worker numbers declined whilst workers from non-EU countries coming to the UK increased by 74k.
• Sterling down vs dollar at $1.27 but up vs Euro at €1.1213.
• Oil down at $72.31
• UK 10yr gilt yield up 1bp at 1.27%.
• World markets. UK down yesterday, Europe mixed, US up. Far East down in Wednesday trade.
o Foreign Secretary says EU needs to ‘change its approach’ if it is to avoid the UK crashing out of the organisation without a deal. Grayling says ‘the risk of no Brexit deal has been increasing recently. The British government is doing everything it can to avoid that outcome.’
o Seen in Berlin where Brexit is pretty much invisible: ‘Goodbye UK and thank you for the music.’
START THE DAY WITH A SONG:
Monday’s song was Boulevard of Broken Dreams by Green Day. Today, who sang:
His palms are sweaty, knees weak, arms are heavy,
There’s vomit on his sweater already, mom’s spaghetti,
He’s nervous, but on the surface he looks calm and ready
RETAIL NEWS WITH NICK BUBB:
• Lookers; After the solid interims from its rival Marshall Motors yesterday, the interims from the Manchester-based car dealer Lookers today are headlined “Gaining share in a challenging market and in line with market expectations for the full year”. First half profits were down by 14%, as expected, to £43m PBT ex-property, on the back of a 5% rise in group sales to £2.58bn, but CEO Andy Bruce says “we have an encouraging level of new car orders for the important month of September”.
• John Lewis Watch: The heatwave broke in the middle of last week, but w/e Aug 11th still saw gross sales at John Lewis dip by 1.9% (nearly 4% down on a LFL basis, on our calculations), with Home sales down by 7.0% gross, although Electricals were up by 0.7% gross and Fashion sales were up by 0.9% gross. That continued the weak start to the second half of the financial year, with gross sales down by 1.9% over the last 2 weeks combined (in the previous 26 weeks, John Lewis was up cumulatively by 0.3% gross or c1.5% down LFL).
• Waitrose Watch: The weather was less helpful overall last week to sales of picnic and barbecue fare at Waitrose and yesterday’s weekly sales overview from JLP flagged that gross sales at Waitrose were only 1.6% up in w/e Aug 11th (c1.5% up LFL). The last 2 weeks overall have been up by 2.7% gross. After a strong end to the first half, the cumulative sales picture for the previous 26 weeks was +2.3% gross for Waitrose (c2.2% up LFL).
• 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 more supplier concerns, although the company has pledged to keep c80% of the stores open. The other big story though is the launch of the Homebase CVA plan by Hilco, with 42 store closures planned, for a loss of 1500 jobs. The Telegraph market report leads with the news that “bidding war speculation swirling around Debenhams forced short-sellers to rush out of the bets they have placed on the embattled High Street stalwart” (the Debenhams share price spiked as much as 15% in intraday trade before pulling back to close 4% up) and it also flags that Card Factory sunk to a fresh all-time low yesterday after Berenberg warned that the retailer could miss its earnings guidance if Christmas trading stays weak.
• News Flow This Week: Tomorrow brings the Kingfisher Q2 update, the Asda Wal-Mart Q2 results and the ONS Retail Sales figures for July.