Langton Capital – 2018-09-04 – Mobile ordering, WTB, cider sales, meat eating, PMIs etc.:
Mobile ordering, WTB, cider sales, meat eating, PMIs etc.:
A DAY IN THE LIFE:
So, here’s a statement followed by a question for you: I like my food as much as the next man but, left to their own devices, just how long would a dog spend licking an empty bowl?
Or their own nether regions, for that matter, but surely the answer has to be measured in the hours rather than the minutes or the seconds because, if ever any animal was likely to lick the pattern off a piece of crockery, it was the household canine.
And, when they’re not eating rubbish from amid a pile of filth, they’re working on their ‘you haven’t fed me for a month’ expression and hoping for charity, aren’t they?
Well, it seems to work for them and, in an environment where all the old certainties are being thrown out of the window, it could be something that we’ll have to study in more detail going forward. On to the news:
60 SECONDS ON MOBILE BOOKINGS – IS IT TIME TO SAVE TIME?
How did we get here?
• The only constant is change. Mobiles are taking over from laptops
• People are increasingly turning to their phone to order food
• Wetherspoons’ app has paved the way for mobile ordering at pubs. McDonald’s is rolling out tablets
• Ordering ahead will work best in pubs and restaurants where interactions with staff aren’t expected/wanted.
Where are we now?
• Every year is the year that order ahead apps are going to take off
• Apps will essentially work as operational streamlining services, and therefore need to be integrated with EPOS
• This is more easily said than done
• White label apps are branded by individual restaurant chains
• But, once customers get used to using apps, an aggregator (think hotels.com or booking.com) makes sense
• The aggregator market is congested, it’s hard to spot winners
What does it mean?
• Proving incremental sales’ wins can be difficult
o As CRMs, these sites have value
o The customer experience may be improved (which could drive visits)
o And customers may simply demand this service
o Operators could smooth busy periods
o But over-focusing on forward orders can antagonise customers in venue
PUBS & RESTAURANTS:
• Selling assets to the Americans: Whitbread: After a strong start, Whitbread shares finished the day lower yesterday. Concerns that splitting the company may not be easy outweighed hopes that activist shareholders would pressure the company into effectively putting its remaining Premier Inn business up for sale.
• Whitbread reports H1 numbers on 23 October at which time it will be pressured for more detail on the timing of its Costa sale to Coca Cola and on just how much the ‘substantial majority’ of the proceeds is that will be returned to shareholders.
• Whitbread will also be questioned on its plans for Premier Inn, whether it is considering a sale and leaseback of its assets and whether, indeed, the entire business is currently for sale.
• Coca-Cola’s acquisition of Costa from Whitbread could mean the brand is seen ‘everywhere’, including vending machines, hotels, restaurants, pubs and cafes, according to Whitbread CEO Alison Brittain.
• Selling assets to the French: Frosty Jacks maker Aston Manor Cider has been bought by French farming and food cooperative Agrial Group for an undisclosed sum. The UK’s largest independent cider maker said the deal provides ‘a hugely exciting opportunity to create a global force in cider and called the strategic fit between the two companies ‘compelling’. Aston Manor has a portfolio including Kingstone Press, Crumpton Oaks, Knights, Frosty Jacks, Golden Valley, Chardolini and Friels.
• BrewDog is launching its Equity for Punks V on Crowdcube and potential investors have until 30 September to invest in the brewery and bar company. The minimum investment is £95 for 4 shares, with shares available in blocks of 4.
• Mosaic Pub & Dining acquires Edmunds Bar & Brewhouse, the Queens Arms and the Rectory Bar in Birmingham for a combined price of £1.3m. The acquisition takes the pub company to 21 sites across the UK
• Flight Club is set to expand into Manchester next month after receiving planning permission and listed building consent. The darts bar currently operates in London and Chicago with a further site set to open in London at Victoria Nova later this year.
• PureMalt Products will invest £5m to double production after winning Emerging Markets Exporter of the Year and Export Team of the Year at HSBC’s Scottish Export Awards.
• The BRC reports retail sales up 1.3% yoy in August, slowing on July’s 1.6% and putting more pressure on the high street as the heatwave came to an end.
• Over a quarter of meat-eating Brits have reduced their meat consumption in the last six months and sales of meat-free products are forecast to grow by almost 20% from £559m by 2021, per Pragma Consulting.
• The Ncn’ean Whisky Company has just launched its first ever spirit, the Botanical Spirit, a hybrid that features a base of whisky redistilled with a selection of botanicals.
• KP Snacks full-year sales grew 10% to £345.7m thanks in large part to the snack specialist’s recent £57m acquisition of Butterkist popcorn.
HOLIDAYS & LEISURE TRAVEL
• Councillors in Edinburgh have backed calls to introduce a licensing regime for holiday lets through Airbnb, and the leader of the council also plans a ‘visitor levy’ of £1 a night per person.
• HotStats reports hotels in Europe saw 16.9% yoy growth in profit per room in July driven by an 11.3% increase in RevPAR yoy to €143.86. ADR increased to €183.20 with occupancy flat at 78.5%.
• Ryanair claims that NATS, the UK air traffic control provider, is discriminating against the low-cost airline and London Stansted Airport. Figures from the CAA show Stansted Airport suffering 52% of all air traffic control delays in the London area cause by NATS between January and March this year.
• The UN World Tourism Organisation reports global arrivals up 6% yoy in the first four months of 2018. Worldwide receipts from international tourism were up 5% to $1.33bn. Southern Europe, the Mediterranean and Western Europe saw 8% growth.
• Saga report 30% growth in yoy holiday sales and 80% growth in cruise sales in H1. The growth has been driven by increased demand for long-haul tourism, a new long-haul brochure and the launch of the cruise ship Spirit of Discovery.
• Camelot plans to combat falling lottery sales in recent years by promising to make more millionaires each week. Latest figures suggested the company had turned a corner, with ticket sales rising to almost £7bn in the year to March with CEO Nigel Railton saying interim results are ‘likely to be up again’.
• Microsoft announces Skype overhaul to make the video calling platform simpler and easier to use.
FINANCE & ECONOMICS:
• The Manufacturing PMI reported yesterday was below expectations at 52.8 in August versus 53.9 in July. Expectations were for a reading of 53.8. The slowdown could, at this stage, be due to any combination of a series of factors including the weather, timing of holidays (and Brexit). Any number over 50.0 still implies expansion
• Construction PMI due out later this morning with the much larger Services PMI due to be announced at 9.30am tomorrow.
• Sterling down at $1.2862 and €1.1082
• Oil up at $78.13
• UK 10yr gilt yield down 2bps at 1.41%
• World markets mixed. UK up yesterday with Europe down and the US closed. Far East mixed in Tuesday trade.
• Brexit etc.:
o Boris Johnson says Chequers is rubbish. Rees Mogg agrees – and says that Michel Barnier also shares this view.
o Telegraph says majority of voters in Tory marginal seats think Chequers is ‘bad for Britain’. Only 21% thought it was good for the country.
o Brexit supporters fail to agree on what a good Brexit implies. Unsurprising as, whilst remainers had one goal, leavers represented (and represent) a broad church with many conflicting views.
o Tory Justine Greening, who is calling for a second referendum now that the difficulties with regard to Brexit are becoming clear, says that the Chequers proposal is now less popular than the poll tax.
o David Davis has said that he will vote against Chequers in the Commons.
o EU suggests it may endorse any Brexit plan as late as mid-March next year.
PRIOR DAYS LATER TWEETS:
• Later tweets: Whitbread up a tad further on reflection that Costa sale could open the way to a bid for Premier Inn & the end of Whitbread itself
• Gourmet Burger Kitchen reported to have appointed restructuring advisors Deloitte for a CVA. Been a while coming…
• UKHospitality opposes introduction of a tourist tax. Edinburgh could be first city to impose a charge.
• Nationwide says UK house price growth now 2.0% & behind inflation at 2.3%
• Raab: deal ‘clearer & clearer’. Boris: Chequers is a disaster. Barnier: ‘strongly opposes’ some elements. May: no turning back. All clear??
• Manufacturing PMI a bit sluggish. Aug = 52.8 vs July 53.9 and expectations of 53.8. Any number over 50.0 still implies expansion
START THE DAY WITH A SONG:
Yesterday’s song was Reptillia by The Strokes. Today, who sang:
I’ve gotta give it to you,
You give me problems
When you are not in the mood
I’ve gotta give it to you
RETAIL NEWS WITH NICK BUBB:
BRC-KPMG Retail Sales for August (the 4 weeks to Aug 25th): We flagged yesterday that another broadly flat LFL sales outcome was likely last month, despite the end of the heatwave and the outcome was indeed only just over the line, with 0.2% LFL growth (after +2.8% LFL in May, +1.1% LFL in June and +0.5% LFL in July). The exact Food/Non-Food split is, as usual, buried in the 3-month moving average, but the Food Retailers clearly again saw the best of it last month and their overall LFL growth looks to have been at least 2%, although Joanne Denney-Finch, the Chief Executive of the IGD, noted that “As the hot weather faded in August, so did the momentum behind food and grocery sales after a long run of excellent results”. That implies that Non-Food was nearly 1.5% down LFL overall in August, despite a pick-up in sales of Computing and Furniture…With Online Non-Food sales up by 7.9% (+7.5%
Halfords: It has been a while since Halfords updated the market on trading and today’s news covers the extended 20 weeks to 17 August, which is a period of both good and bad weather. The recent heatwave has been helpful to cycling and camping sales, but the cold weather at Easter has not been forgotten. All in all, however, the news is quite solid, with Retail sales up 2.6% LFL.
McColl’s: Yesterday’s FT article about the problems of High Street retailers dragged poor old McColl’s into the mix, querying its financial health in the light of the disruption it has suffered from the collapse of its main wholesale supplier Palmer & Harvey (which has dragged on for far longer than it should have done). So today’s Q3 update from the convenience store chain (for the 13 weeks to Aug 26th) is timely, although it is disappointing that LFL sales were still down, by 0.9%, given the boost from the hot weather. However, Jonathan Miller, the CEO, is able to trumpet that “The accelerated rollout of 1,300 stores to Morrisons supply is now complete, including all 700 stores formerly serviced by P&H. The rapid rate of transition has been a fantastic achievement, being delivered in less than nine months, and in the face of unprecedented disruption in the sector and for our
News Flow This Week: Tomorrow morning we get the John Lewis & Partners Oxford Street store revamp launch, with an analyst’s visit, whilst the latest FTSE quarterly index review outcome is announced in the evening (based on tonight’s closing prices). Thursday brings the Dixons Carphone Q1 update/AGM and the Carpetright AGM.