Langton Capital – 2019-04-15 – March Tracker, returnable bottles, Brew Dog, Thos Cook etc.:
March Tracker, returnable bottles, Brew Dog, Thos Cook etc.:
A DAY IN THE LIFE:
Why is it that you never put two holes in one pullover, but rather always put one hole each in two different garments because it would be more efficient and less hassle all around if you could have a raggedy old jumper full of tears and rips and covered in grass and bramble juice stains.
Whereas having an equally spread number of blemishes and imperfections across a number of garments just makes you look shabby or suggests that you’re a politician who’s read a book on how to look human ahead of giving a fireside speech on emergency measures, the censuring of the Press and the like.
But anyway that, apparently, is the look that I’m going for. On to the news:
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MARCH SALES TRACKER: Sales up against snow-impacted trade last year. 15th April 2019: See Premium Email.
THOMAS COOK’S BANKING LIMITS: Actions speak louder than words. The company wants to waive limits this year. 15th April 2019: See Premium Email.
GENERAL NEWS – PUBS & RESTAURANTS:
• The CGA Peach Sales Tracker for March reports pubs & restaurants increased LfL sales by 3.8%. LfL sales in March 18 were down 3.1%. See Premium Email.
• Non-alcoholic drinks company Seedlip has reported full year numbers (somewhat overdue) for the year to 31 May 2018 to Companies House. The group, which does not have to make public its P&L account, reports that retained losses have increased by £3.15m on the year. The company now has retained losses of £4.07m and shareholders’ funds of £2.26m.
• Seedlip’s accounts have been prepared under the Going Concern convention. The company says ‘the directors have considered the foreseeable future…and believe that there is ample secured funding to allow it to continue to prepare the accounts on a going concern basis’. The accounts are unaudited. Seedlip issued shares in July and September last year.
• The Institute of Economic Affairs has said ‘the running costs of the government’s proposed deposit return scheme (DRS) for drinks cans and bottles is a very expensive way of achieving very little.’
• IEA says the DRS will cost £1bn to set up and will collect recyclables worth just £37m. The IEA says ‘the benefits of the policy are outweighed by its costs.’ It says the DRS ‘would be a loss-making inconvenience for consumers and retailers alike.’
• Brew Dog’s latest Equity for Punks crowdfunding cash raise has passed £1m at £1.2m raised from 5,179 investors. The group has raised over £68m from over 100k investors to date. The latest raise has a short term target of £7m and a stretch target of £50m. It is due to remain open for another 81 days.
• Brew Dog’s share prospectus, a decidedly unpunk 89-page tome full of legal small print and risk factors, suggests that the group made a loss before tax of £576k last year on revenues of £172m. In the year to Dec 2017 the group made a profit of £1.4m. After Brew Dog’s various fund raises, it has shareholders’ funds of £165m and retained profits of £18.1m.
• CGA has reported that the number of group-owned restaurants fell by 0.1% in 2018, the first drop since the financial crisis.
• CGA says that 48% of consumers eat out at least once a week. This may include sandwiches.
• Diageo has announced that it will remove plastic from its multipacks of Guinness, in part of a £16m initiative.
• The Telegraph has reported that proxy share advisers at Domino’s Pizza have recommended reducing earning figures that trigger share wards to bosses.
• The British Retail Consortium and Springboard have found footfall to UK highstreets increased 1.4% in March on last year. However, Springboard highlighted that these findings were on soft comparisons of negative 6% in March last year. Helen Dickinson, chief executive of the BRC, said: ‘Retailers will be relieved to see footfall up from last year though this is was heavily influenced by the weather: while shoppers in 2018 were contending with the ‘Beast from the East’, this March has been mild by comparison’.
• The BBPA has requested an extension to pubs hours for Victory in Europe Day 75, celebrating 75 years since World War Two ended in Europe.
• SIBA has awarded Palmers Brewery and Yeovil Ales top spots at the South West Independent Beer Awards 2019.
• LVMH Moët Hennessy Louis Vuitton has announced that its revenue has increased 16% to 12.5bn euros, with LfL sales up 11%.
HOLIDAYS & LEISURE TRAVEL:
• Thomas Cook has called a General Meeting to waive its borrowing limits in a move that some suggest means it is about to breach, or has already breached, them. See Premium Email.
• Cautious comments from EasyHotel last week will have some read-across for Whitbread’s Premier Inn subsidiary.
• The comments from Uber that it may never ‘achieve profitability’ are still sinking in. See our comments in prior emails on existential risks. These can come completely out of the blue (e.g. fraud) but, more often, they’re linked to regulatory action, legal action or the taxman. Unlucky (or incompetent) companies can face all three at once.
• Uber is looking for a stock market valuation of perhaps $100bn. The group lost $3bn last year.
• The top-10 Atol-holders in the UK have increased their authorised capacity for this summer by nearly 15% despite uncertainty surrounding Brexit.
• Abta has reassured customers that they should have no worries about booking holidays this summer, with the group commenting: ‘There are plans in place if the UK leaves the EU without a deal at the end of October, meaning flights will still be able to operate and a visa won’t be required for short-trips to the EU’.
• Tui UK has discounted ‘hundreds of thousands’ of its holiday packages booked before the end of today. Tui UK managing director Andrew Flintham said: ‘We’re giving people the reason to break free and stay in Europe this summer with some great deals with £100 off every 14 night holiday’.
• Air passenger traffic in Europe has increased by nearly 5% in the first two months of this year, according to data from the European airport association ACI Europe.
• Iata CEO Alexandre de Juniac says ‘Temporary measures, however, are no substitute for a comprehensive Brexit package that will ensure that [aviation] is able to play its vital role in contributing to the well-being of the region.’
• STR reports London hotel occupancy up 2.1% to 81.6% in March, with ADR up 1.7% to £138.13 and RevPAR up 3.8% to £112.68.
• STR reports US hotel occupancy is forecast to fall between -2% to 0% in March 2019. ADR will increase between 0-2% and RevPAR will be flat between -1% to 1%.
• GuestReady acquires France-based BnbLord through an undisclosed deal. GuestReady is a service that helps shared-economy hosts manage their business on Airbnb and other rental sites and has raised $3.7 million from investors to date.
• US airlines are struggling to meet demand after the grounding of Boeing 737 MAX airplanes.
• Disney launches its own streaming service called Disney Plus. The company intends to make any new film releases exclusive to its platform, and has already begun the process of pulling its content from other services like Netflix.
• Bettingmetrics has raised £150k in an investment round led by RLC Ventures. Bettingmetrics is a platform where betting activities are collated into a single place, connecting punters and bookmakers.
• The Italian media group Mediaset and its German ProSiebenSat1 have denied rumours that they are about to merge. Max Conze, ProSiebenSat1 CEO said: ‘I see no industrial logic in combining’.
FINANCE & ECONOMICS:
• It will be interesting to see whether manufacturing begins to wind down the stockpiles that were put in place before the first two Brexit deadlines. End-Oct seems, at the moment, yonks away.
• The ECB’s President Mario Draghi has expressed concern that political interference with the US Federal Reserve could damage its independence.
• The Conference Board has suggested that the UK will be the only large economy to see a decline in productivity this year.
• Sterling up a fraction at $1.3094 and €1.1577. Oil up at $71.35. UK 10yr gilt yield up 13bps at 1.22%. World markets up Friday, Far East up in Monday trade. UK set to open up maybe 10pts.
• Brexit, politics etc.:
o Brexit delay arguably not long enough to allow radical change & not short enough to discourage MPs etc from clearing off on a long Easter holiday.
o Nigel Farage has unveiled the Brexit Party. It could split the far right but, on aggregate, it could take more votes from the Tory Party.
o Telegraph says Labour is strong poll lead over Tories. The latter could lose 60 seats if an election were held tomorrow.
o Chancellor Philip Hammond has said that the UK parliament could vote again on whether to hold a second referendum. Labour leader Jeremy Corbyn is coming under pressure from his MPs to demand a people’s vote as the price of collaboration with the government.
o Chancellor Philip Hammond has told Sky that the government has been right to spend £4bn so far on preparing for Brexit.
o British Steel is asking the government for a £100m loan in order to meet EU emission rules as it is no longer able to use EU carbon credits to settle its bill.
o Deputy PM David Lidington has said that his party does not wish to be seen as the Brexit party. Reuters says Mrs ‘May’s authority has been shattered by her three-time failure to get an exit deal approved by parliament and a pledge to quit once Brexit is delivered.’
START THE DAY WITH A SONG:
Last Friday’s song was Apache by the Sugarhill Gang, today who sang:
She’s posing for consumer products now and then,
For every camera she gives the best she can
I saw her on the cover of a magazine
RETAIL NEWS WITH NICK BUBB:
Nick is on his way back from the US.