Langton Capital – 2019-01-15 – CAKE, discounts, RBG, Elegant Hotels, Games Workshop, Gym & other:
CAKE, discounts, RBG, Elegant Hotels, Games Workshop, Gym & other:
A DAY IN THE LIFE:
In a world where you can’t use certain passwords because you’ve used them before, how can you be expected to come up with a new one every time because your previous one either expired or, more likely, you got it wrong three times on the trot and then had to think of an (increasingly non-memorable) replacement after which you found yourself in the endless loop here described?
And, as the website will helpfully tell you not to write your passwords down, the problem’s exacerbated and, if the site in question is something harmless like the local chicken breeder’s association or a site for a bunch of flat earth cranks that you enjoy trolling, what are any hackers going to do with your information anyway?
Offer you a black market Rhode Island Red or yet another tape about how the moon landings were faked? Anyway, enough of that. On to the news:
PUBS & RESTAURANTS:
• Patisserie Holdings has announced that James Horler has stepped down from his Non-Executive Director role, in order to focus on his position as CEO at another business. The group’s CEO and CFO left the company last year in the wake of the group’s accounting scandal and ongoing police investigation. The group’s shares remain suspended more than three months after its numbers were revealed to be misleading and the company nearly went bust.
• Discounts into the 50s. Café Rouge, Bella Italia, Zizzi, Frankie & Benny’s, Chiquito all 50% off (or 2-4-1). Carluccio second main for a quid. Prezzo and Pizza Hut lagging at 40% and 41% respectively with Jamies’ 30% off.
• Revolution Bars Group shares down 21% yesterday on the back of a cautious outlook statement for H2. Christmas, however, was pretty good, all things considered.
• Pragma summary of Christmas sales updates suggests leisure LfL sales are on average up by 5.9% whilst grocery sales are +1.6% and with food & beverage sales within that +8.0%.
• Pragma says Loungers’ sales, at +11.0%, top the Christmas list with Greene King at 10.9%, M&B at 9.8%, Majestic Wine at 6.3%, D&D at 6.0% and Gregg’s at 5.2%. The periods measured vary in length.
• Pragma points out that general retail has performed less well than leisure sales with Debenhams down 3.6% LfL (6wk period) and M&S some 2.2% lower (for the Christmas quarter).
• The Synergy Grill has been chosen as the grill of choice for the World Steak Challenge competition, starting today. This year’s event will be held at the Magic Roundabout on Old Street London. Justin Cadbury, Synergy Grill CEO and chairman, said: ‘We see our grill as the perfect partner for the competition. Synergy Grill brings a range of benefits including ease of use, waste efficiency, energy savings of up to 59% and crucially creates well presented, extra juicy and succulently grilled steak’.
• EIG announced that it yesterday bought back 378,515 of its own shares for cancellation at 202.9p.
• Oakman Inns reports LfL sales for the five weeks to 6 January up 8.3%. Total sales for the 40 weeks to 6 January were up 36.1% to £29.7m, with LfL growth of 8.5%. CEO Peter Borg-Neal said ‘Christmas started slowly but gathered pace towards an excellent outcome with key date performance particularly strong.’
• Per Morning Advertiser, the Government is consulting on whether to ban fatty and sugar food promotions, a move that could place pubs under pressure. The move is the second part of the Government’s childhood obesity plan.
• UKHospitality has welcomed the government’s proposal to merge the A1, A2 and A3 building uses classes in order to support businesses to use their space more flexibly. UKHospitality Chief Executive Kate Nicholls said: ‘Hospitality businesses are integral to high streets and will have a significant role to play if they are to prosper. Flexibility is increasingly important for both businesses and customers looking to take advantage of multi-use spaces’.
• The team that brought us DUM Biryani has announced that they will open a new Indian restaurant specialising in Lucknow cuisine, called Lucknow Social.
• JW Lees has stated that the group’s Operations Director for its Hotels and Inns Division, Tony Spencer, is set to retire.
• Lidl UK has reported sales up 8% for the six weeks to 30 December. The group has also pledged to invest a further £1.45bn into expanding its UK operations.
• New Look has announced a rescue plan that will see it hand over control to its lenders in an effort to cut its growing £1.35bn debt pile.
HOLIDAYS & LEISURE TRAVEL:
• Elegant Hotels has reported full year numbers to end-Sept saying revenue rose 5% to $62.9m with REVPAR flat.
• Elegant says adjusted EBITDA was up 10.6% at $19.7m with PAT up 3.5% at $9.5m. Adjusted EPS is up 15.9% at 11.3c.
• Elegant Hotels CEO Sunil Chatrani comments ‘we are pleased to have had a year of good financial and operational progress.’ Mr Chatrani says ‘our trading since the start of the new financial year has remained in line with market expectations, and our bookings are currently tracking ahead of the same period last year. While we are confident in our prospects for FY19, the Board continues to monitor macroeconomic conditions closely, which have the potential to reduce UK consumer discretionary spend.’
• Elegant Hotels also announces that CFO Jeff Singleton is to leave the company. He is to remain with Elegant ‘for a period of time to ensure a smooth transition with his successor.’
• Netflights.com suggests Britons are planning to spend nearly £2bn extra on holidays in 2019. The survey showed 40% of respondents think issues regarding Brexit will work out so that ‘it will all be fine’.
• UKHospitality reports UK hotel occupancy in November rose by just 0.6% while the European average was up by 1.2% while RevPAR was up 1.7% in the UK against 4.5% in Europe.
• Clia UK & Ireland reveals Britons took 1.33m cruises between January and September, up from 1.31m the year prior. Full year figures will be announced in the spring.
• Barrhead Travel reports strong demand for summer holidays in the first week of 2019, with sales up 10% yoy. Spain and Turkey dominate the top five destinations.
• STR reports London hotel occupancy up 5% yoy to 81.9%, ADR up 6.2% to £156.47 and RevPAR up 11.4% to £128.09 for December 2018
• London Luton airport handled 16.6m passengers in 2018, up 5% yoy. During the year LLA marked the official opening of its £160 million redevelopment project, which will increase capacity by 50 per cent to 18m by 2020.
• Games Workshop Group has repored H1 numbers to 2 Dec saying revenue rose to £125.2m from £109.6m with operating profit up at £40.8m (2017: £38.1m) and EPS of 100.8p versus 96.0p last year.
• GAW CEO Kevin Rountree comments ‘our business and the Warhammer Hobby continue to be in great shape. We have remained true to our long-term strategy, and once again delivered on our promise to produce and sell the best fantasy miniatures in the world, while engaging and inspiring our fans. We continue to strive to make the Warhammer hobby ever better. Exciting times.’
• GAW says ‘December trading continued in line with the sales performance in the first half.’ The group concludes ‘we are also announcing that the Board has today declared a dividend of 25 pence per share, in line with the Company’s policy of distributing truly surplus cash.’
• The Gym Group reports revenue growth of 35.6% to £123.9m for the year to 31 December, with total membership up 19.3% to 724,000. The group says ‘as a result of the performance outlined above, and taking into account the later second half weighted 2018 openings programme and one-off impact associated with the Lifestyle conversions, we expect full year Group Adjusted EBITDA for 2018 to be approximately £37m.’
• Goals has announced that Martin Johnson is to join the company as Interim Chief Financial Officer. Goals Soccer’s shares finished down 16% on Monday on the back of yesterday’s profit warning.
• Improbable signs a deal with Epic Games establishing a $25m fund to help developers move towards ‘more open [games design] engines’.
FINANCE & ECONOMICS:
• US President Donald Trump said yesterday that he has never worked for Russia.
• Chinese exports fell in December at the steepest rate in 2yrs.
• Sterling up at $1.2908 and €1.1243. Oil unchanged at $59.79. UK 10yr gilt yield up 1bp at 1.30%. World markets down yesterday but Asia up today. UK forecast to open up around 40pts.
o Today is the big day. Or perhaps one should say it’s one big day. There may be more voting on this proposal or even a People’s Vote. The magnitude of the defeat is important.
o Large defeat for Mrs May’s withdrawal proposals likely. Mrs May must come back with new proposals within three days. Ability to run the clock down much reduced. Vote of confidence may be proposed today or tomorrow.
o With many backing away from various promises made in 2016, Brexit Minister Richard Barclay tells Andrew Marr four times in five minutes that he campaigned for Brexit personally. Not clear which version he favours (borders, economy, immigration, control etc.) as they are not deliverable as a complete package.
PRIOR DAY LATER TWEETS:
• Later tweets: Revs had good Xmas & improving trend but talk of lower margins & caution re H2 sends shares down 18%.
• CAKE in the news as interim CFO Nick Perrin says is ‘unsure’ why failure to pay creditors was not spotted earlier
• Worth pointing out that Vouchercodes.co.uk is running an unusually high number of offers for travel & hotel brands.
• Goals Soccer warns on profits as slow trading bites. Shares down 12% at 63p. Says 2018 was ‘disappointing’.
START THE DAY WITH A SONG:
Yesterday’s song was Proud Mary by Tina Turner. Today, who sang:
Sleep with one eye open
Gripping your pillow tight,
RETAIL NEWS WITH NICK BUBB:
Boohoo: Today’s update for the 4 months to Dec 31st is headlined “Strong growth across all brands in all regions” and the 43% constant currency sales growth of 43% is certainly impressive (with no less than 33% in the UK), particularly as the gross margin was up by 170bps, despite the fears about increased discounting. The only slight disappointment is that operational gearing is not what it might have been, as the group says that it expect adjusted EBITDA margins for y/e Feb to be between 9.25% and 9.75%, narrowing the range from the 9% to 10% previously guided. There is a conf call for analysts at 9.30am.
Games Workshop: Today’s interims from Games Workshop (for the six months to Dec 2nd) are strong, despite strong comps, and the company has flagged that December was also strong.
Dignity: There has been a buzz that a “hard Brexit” would do wonders for Dignity, which now calls itself “the UK’s only listed provider of funeral related services”, but the upgrade to full-year profits it has announced today is down to good old-fashioned operational outperformance in Q4: market share, average funeral income and cost control. The final results are on March 13th, by which time the outlook for Brexit might be a bit clearer…
News Flow This Week: This week is dominated by the key Brexit vote in the House of Commons this evening, as the political chaos/uncertainty continues…but there is still plenty of Retail company news to distract us. Tomorrow brings the interims from the stationery chain The Works. Thursday brings the ABF (Primark) update, the N Brown Q3 update, the Game Digital AGM update and the Signet update in the US. Then Friday brings the ONS Retail Sales figures for December.