Langton Capital – 2019-05-17 – Restaurant Group, TCG, Pret, Amazon/Deliveroo etc.:
Restaurant Group, TCG, Pret, Amazon/Deliveroo etc.:A DAY IN THE LIFE: So, I was helping to do our daughter’s maths homework yesterday, which reminded me very pointedly that I cannot and never could ‘speak maths’. It’s a skill, I’m sure but, with the exception of the fact that I had to do an A level equivalent test in the first year of university to assess my competence, I’ve carved a career out of arithmetic, spreadsheets and chatter rather than anything too intimidatingly heavy. But I can tell the time & know how many pennies make a pound and, as our printer is still telling us to replace our printer cartridge some four months after I first wrote about it begging us to spend more of our hard-earned funds on ink in this email, that comes in useful. The weekend’s upon us, let’s move on to the news: LANGTON PREMIUM EMAIL: For less than the price of a coffee and a newspaper per week, Langton is to produce a premium email. This is priced at just £295 (plus VAT) for a single subscriber or £495 (plus VAT) for multiple subscribers. The free email will be largely unchanged. Drop us a line to get involved. RESTAURANT GROUP AGM TRADING UPDATE: The Restaurant Group has updated on trading to its week 19 saying that this remains in line with expectations. 17 May 2019: The Restaurant group has today released a trading update covering the first 19wks of the current year. Overview: Restaurant Group says ‘current trading is in line with our expectations with Group like-for-like sales for the 19 weeks ended 12 May 2019 up 2.8%.’ They were also up 2.8% at week 10. The Beast from the East was end-Feb and early March last year but the latter nine weeks will benefited from The Avengers film, the fastest selling film ever. More in Premium Email. GENERAL NEWS – PUBS & RESTAURANTS: • Pret a Manger has been linked with an offer to buy rival Eat with the aim to turn the 94 stores into vegetarian outlets. Vegetarianism has hit the mainstream. • Amazon has announced its intentions to invest in Deliveroo. The food courier, Deliveroo has raised $575m in total from investors, with Amazon providing a substantial proportion of this. This will sharpen competition in delivery. It could put pressure on Uber. The temptation for Deliveroo & others to move into bricks & mortar will • The BBPA has asked the Southwark and Redbridge councils to reconsider its proposals to introduce a Late-Night-Levy. Brigid Simmonds, Cheif Executive of the BBPA commented: ‘Introducing a Late-Night Levy is a backward step for any local authority. The current Late-Night Levy framework does not work effectively in addressing local late-night alcohol-related issues. It is a tax and unfair to well-run and responsible businesses such as pubs – many of which are SMEs already struggling to get by’. • The American owners of ASDA, Walmart have warned of an ‘incredibly challenging backdrop’ after reported a fall in quarterly sales and the failure of its merger plans with Sainsbury’s. • A new report by Diageo’s Distill Ventures suggests that customers are still being ‘underserved’ when it comes to the choice of drinks that they are offered. The report suggested that 61% of Brits would like a better choice when it comes to non-alcoholic drinks. • Despite the desire for even more choice, the range of non-alcoholic drinks in the UK has risen rapidly over the last year or so. Diageo suggests that, as of October 2018, there were 42 non-alcoholic ‘spirits’ available in the UK, up from just four products in April. • The Sunday roast has been named Britian’s favourite pub food according to research from Nisbets, with 17% of repondents saying they would choose it over any other dish. Coming in at second place was fish and chips with 13% of the vote and steak and chips was third with 12%. • Mintel has stated that the UK leisure industry is set to grow 16.7% by 2023 to a value of £126bn, with experiential leisure leading the way. Mintel commented: ‘The UK Leisure industry is flourishing. This is driven by consumers’ desire to go outside their comfort zone and try new things. Disposable income that was once spent on tangle items is being redirected to the pursuit of creating wonderful, intangible memories’. • CBRE has reported on ONS data that shows the UK consumer spends 13.3% of their weekly household spend on recreation and culture, up from 10% in 2001. • HSBC UK grants Berkmann Wine Cellars £14m of funding to support its global expansion plans. • Wine Paris and Vinexpo merge to create a mega-show on 10-12 February 2020. The event has been created to cater to the needs of the global wine and spirits industry at a key time in the drinks-buying calendar. • The Inn Collection Group pledges its support to the Refill campaign by registering each of its inns as refill stations where people can replenish their water bottles for free. HOLIDAYS & LEISURE TRAVEL: • Thomas Cook shares were down by 15% yesterday to around 19.6p on the back of record H1 losses driven by intangible asset write-downs. TCG said that Brexit was impacting booking patterns, that discounting had picked up and that the outlook was challenging. • TCG warned on profits twice towards the end of last year and, if yesterday’s update was not a profit warning, then it was very close to being one. Indeed the only reason that the company may not have warned on profits is that the situation is so unclear that it is uncertain what they will be at all. • TCG debt has been marked down in debt markets. The group is past the low point in terms of cash flow but it is attempting to secure more funds in order to deal with the autumn and winter outflow of funds. • TCG says any new financing arrangement will be ‘principally dependent on progress in executing the strategic review of the group airline’. It says that it has had multiple bids for bits and for all of its airline. • The FT points out that TCG’s auditors, EY, yesterday ‘flagged uncertainty over the group’s sale of its airline, on which a new £300m bank facility depends.’ • US hotels have seen occupancy decrease 0.3% to 68.3% during the week of 5-11 May 2019. The sector also saw ADR increase by 1.2% to $131.72 and RevPAR up 0.9% to $89.94. OTHER LEISURE: • UEFA has launched a probe into Man City regarding possible breaches of financial fair play. The Premier League champions could face a possible Champions League ban. FINANCE & ECONOMICS: • Sterling weaker at $1.2791 and €1.1443. Oil up at $72.81. UK 10yr gilt yield up 1bp at 1.07%. World markets up yesterday, Far East mixed on Friday. • Politics, Brexit etc.: o Mrs May has said she will resign as Tory leader if her Brexit bill does not achieve a Commons majority in early June. She has also said she will resign if it does pass. Bottom line, she will resign. o Boris, who was denounced by friend and rival Michael Gove in 2016 as being not competent enough to lead the party, has thrown his hat in the ring. o 1922 Committee Chair and Brexiteer Sir Graham Brady said that there had been a ‘very frank exchange’. o Mrs May’s former right hand man, Nick Timothy, described as Theresa’s ‘brain’ until he was sacked in the aftermath of the 2017 General Election debacle, has said that Mrs May should resign in order to stop the current ongoing ‘national humiliation’. Mr Timothy, not that he’s upset, of course, tells the Daily Telegraph ‘her premiership has failed, and her authority is shot. Every day wasted from here makes life harder for whoever leads Britain into the future.’ o Current transport secretary Chris Grayling, known as ‘failing’ to his political enemies, has overseen the waste of £500m of taxpayers’ money at the justice department according to reports re the renationalisation of parts of the probation service. START THE DAY WITH A SONG: Yesterday’s song was When Doves Cry by Prince, today who sang: Four a.m. We ran a miracle mile, We’re flat broke, But hey we do it in style RETAIL NEWS WITH NICK BUBB:
• Asda Watch: After all the press speculation about a potential Asda IPO, Walmart confirmed the plan in yesterday’s Q1 update, while playing down the timing: “We’re focused on continuing to execute the strategy to strengthen Asda’s long-term success, including the potential of an IPO at some point in the future. We’ll be thoughtful and measured in our approach”. As for the Asda Q1, the calendar quarter was down 1.1% LFL (ex-petrol), but on an Easter-adjusted basis the outcome was said to be up 0.5% LFL. Asda CEO Roger Burnley said, in somewhat convoluted terms: “We have maintained our focus and momentum, against an increasingly challenging backdrop and we remain entirely focused on delivering our strategy, without the benefits the proposed merger with Sainsbury’s would have delivered. Our strategy remains as it always has been – winning on price for customers, whilst delivering a • BDO High Street Sales Tracker: We flagged on Wednesday that sales at John Lewis were given a net boost last week by the cooler weather, given the household goods weighting of the sales mix. The BDO High Street Sales Tracker for medium-sized Non-Food chains is more Fashion weighted, however, and last week, w/e Sunday May 12th, was subdued. BDO Fashion sales were down by 4.0% LFL (down 11.6% ex-Online), not helped by another tough comp. Total BDO LFL sales (including Homewares and Lifestyle sales) were down by 1.3% last week (down by 7.7% in Store sales, but up by 18.4% Online). • News Flow Next Week: Another busy week kicks off on Monday with the Ocado EGM to approve the M&S deal. Tuesday then brings the Halfords finals, the Topps Tiles interims and the Shoe Zone interims, as well as the Greggs AGM. On Wednesday we get the much-awaited Marks & Spencer finals, the Pets at Home finals, the French Connection AGM and the publication of the Watches of Switzerland IPO prospectus. Then Thursday brings the Mothercare finals, the Inchcape Q1/AGM, the Hotel Chocolat Capital Markets Day, the ONS Retail Sales for Apriland…the EU Elections. |
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