Langton Capital – 2019-05-21 – Restaurant capacity, debt, discounts, Saga, TCG etc.:
Restaurant capacity, debt, discounts, Saga, TCG etc.:
A DAY IN THE LIFE:
In praise of tea.
I would posit that it’s possible to look genteel when drinking coffee but the only way to drink tea to gulp it down like a sucking drain?
Because, though it’s not a very pleasant site (or sound), when you’re thirsty and need a drink, don’t you just find that a mug of tea hits the spot in a way that coffee singularly fails to do?
And you can stack away cup after cup which, if you did it with coffee, would have you talking at 300wds per minute and climbing the walls to get away from the spiders. Horses for courses, maybe. 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 NUMBERS. GROWTH MONITOR SHOWS REAL CONTRACTION: Is it too little, too late? See also Pubs & Restaurants below. 21 May 2019:
FROM THE ARCHIVE. WRITING IN APRIL 2007, WE COMMENTED THAT IT WAS ODD THAT WE HADN’T HAD A RECESSION FOR 16 YEARS. 20 May 2019:
HOLIDAYS & LEISURE TRAVEL:
• Thomas Cook shares down another 13% yesterday at 10.5p. Were in single figures at one stage. Saga down 4%, Merlin off 7% at 350p.
• Saga shares remain weak, down another 4% or so yesterday after a similar 4% drop on Friday. The shares IPO’d at 185p in 2014. They went to a discount almost immediately before recovering to spend most of 2017 at or around 200p. The shares then went on to lose 75% of their value over the last 18mths or so.
• An unfortunate coincidence of events (highly priced & ambitious IPO price, tougher market in holidays given Brexit and potential regulation re financial products) has perhaps conspired to deprive IPO supporters of three quarters of their money.
• Thomas Cook has been reassuring customers that holiday trips will go ahead, the firm said ‘We have the support of our lending banks and major shareholders, and just this week we agreed additional funding for our coming winter cash low period.’ Shares in the company dropped a further 16% to 10p on Monday.
• STR reports US hotel occupancy up 0.3% to 68%, ADR up 0.9% to $131.85 and RevPAR up 1.2% to $89.67 in April 2019.
• STR’s HOST Almanac show 2018 US hotel industry wide profit of $80bn from revenues of $218bn. Labour costs grew by 3.2% for the year, higher than revenue growth for the second straight year.
• Gleneagles Hotel reports revenues up by £4m to £55.3m, with operating profit up 40% to £3.5m. However, the luxury hotel reported pre-tax profits down to £55,000, compared to £505,000 the year prior.
• Goldman Sachs is in discussions to acquire B&B Hotels for €2bn, according to Bloomberg. The deal is set to close in H2 2019.
• Eurostar offered vegetarian menus for the first time from 13-19 May.
• Fortune reports some popular European destinations are actively trying to encourage tourists to visit elsewhere. Places such as Amsterdam, Venice and Barcelona fear that over tourism will affect city livability.
• A leaked European Commission report suggests a jet fuel tax would cut emissions by 11% with no impact on jobs or the economy.
• Arsenal MD Vinai Venkatesham told the FT’s Business of Football summit that ‘the Premier League is the thing that really draws the commercial partners in. Of course, all our commercial partners want us to be in the Champions League as well, but I think that the Premier League piece is just as, if not more, important than that.’
• Financial advisors Duff & Phelps claim Premier League football teams are missing out on millions of pounds in stadium naming rights. Only 30% of top flight teams have a stadium sponsor, compared with more than 80% in American football’s NFL.
• Huawei has been granted a temporary US general licence enabling it to maintain its networks and provide software updates to existing handsets. The license is for 90dys only.
FINANCE & ECONOMICS:
• Sterling is at 4mth lows vs both the US dollar and the Euro. This is not helpful for the overseas tour operators who often have to price beds in Euros and flight costs in dollars.
• Morgan Stanley has opined that a collapse of Sino-US trade talks and tit-for-tat rise in tariffs on goods traded between the two countries would push the world economy towards recession.
• Jaguar Land Rover has reported a record annual loss of £3.6bn on the back of a £3.1bn Q1 shortfall.
• Ford is to cut 7,000 jobs globally with up to 550 positions going in the UK.
• Sterling down a shade at $1.2723 and €1.14. Oil down at $72.23. UK 10yr gilt yield up 2bps at 1.06%. World markets down yesterday with Far East mixed in Tuesday trade.
• Brexit, politics etc.:
o A ‘new and improved’ offer on Brexit is to be forthcoming from the PM insists no10. Only 35mths after the Brexit vote and 26mths after Article 50 was invoked, Mrs May is to solicit other people’s views.
o Former Brexit minister David Davis told the Today Programme yesterday that Mrs May’s proposals were doomed to failure.
o Lord Heseltine has lost the Tory whip in the House of Lords as a result of saying that he would rather vote Lib Dem than Tory in the upcoming EU elections.
o Chancellor Philip Hammond will tell the CBI today that no prospective Conservative leadership contender should ‘hijack’ Brexit & while ‘knowingly inflicting’ damage on the UK via a no-deal exit from the EU. Mr Hammond, known as ‘spreadsheet Phil’ and for his dour presentation, may not survive any post-leadership change reshuffle.
o The ‘One Nation’ group of Tory MPs met yesterday evening to attempt to block any leadership candidates pushing a ‘no-deal’ Brexit.
o Bank of England deputy governor Ben Broadbent said yesterday that British companies are likely to cancel investment projects that they have put on hold because of Brexit uncertainty in the case of a Hard Brexit.
START THE DAY WITH A SONG:
Yesterday’s song was Pretender by Foo Fighters. Today, who sang:
When I was just a baby
My Mama told me, “Son
Always be a good boy
Don’t ever play with guns”
RETAIL NEWS WITH NICK BUBB:
Sports Direct: If, like us, you were wondering why the share price of the Australian-based website MySale collapsed last week to little more than 6p (capitalising the struggling group at only £10m), the answer came at 4.55pm yesterday afternoon, when Sports Direct announced that it had dumped its entire 4.8% stake, for reasons unknown. It surely can’t need the money…so the assumption must be that it has lost faith with the business model, despite having a joint venture with MySale to clear seasonal stock “down under”. On that basis, no doubt the beleaguered Philip Green would like to be out of his ill-fated MySale shareholding as well, but he clearly has much bigger problems on his mind, as he fights to avoid the collapse of his Arcadia fashion empire…
Ocado: If you’re wondering whether Ocado shareholders approved the lucrative M&S deal at yesterday’s EGM, the answer is, of course they did. The turnout was as high as 76% and basically 100% of the votes were in favour of the deal. It remains to be seen whether M&S shareholders will be asked to approve the deal to pay £750m for half the business, but the more pressing issue is that M&S will have to say after tomorrow’s finals how they intend to pursue the planned rights issue to finance the hefty purchase price, with £563m cash to be paid upfront (c13% of M&S’s market cap).
WH Smith: As WH Smith is so linked with the previous CEO Kate Swann, it is a bit of a shock to see that the current CEO Stephen Clarke has been in charge for six years now. It is even more of a shock to find out that he is stepping down on Oct 31st, in an announcement on the back of today’s scheduled trading update. Fortunately, it looks like a planned move, as his No 2, Carl Cowling, the current MD of the High Street Division, is being promoted to the top role, with the veteran FD Robert Moorhead continuing to provide his support. So life goes on and the trading update is fine, ahead of the key summer season in Travel, with LFL sales over the last 11 weeks up 1% (up 3% in Travel and down 1% in the High Street). Given the usual exemplary gross margin and operating cost management, Stephen Clarke says “We remain confident in the outcome for the full year” (the year-end is
Halfords: Today’s finals from Halfords for y/e March makes less happy reading, with underlying PBT of £59m down 18% and multiple references to the adverse impact of the “extremely mild winter” on Motoring sales. However, the outcome is said to have been in line with guidance and although profits are still expected to be broadly flat in the new-year, long-suffering shareholders will be pleased to see that the dividend has been edged up.
News Flow This Week: The Greggs AGM is being held today at 11.30am in sunny Newcastle, but the trading update was brought forward to last week. Tomorrow brings 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 B&M finals, the Mothercare finals, the Inchcape Q1/AGM, the Hotel Chocolat Capital Markets Day and…the EU Elections. The ONS Retail Sales figures for April have been delayed until Friday (the same day as the CBI Distributive Trades survey for “May”).