Langton Capital – 2019-09-06 – Greene King, beer price, US restaurants etc.:
Greene King, beer price, US restaurants etc.:
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A DAY IN THE LIFE:
Why, if you’re going to both add a grease stain to a shirt and poke a little hole in one, it has always to happen to two different garments?
And if you’re going to slightly burn one in a bonfire and partially tear the cuff off one when it gets caught in a tree, you’ll inevitably have ruined four shirts rather than have just comprehensively trashed the one article of clothing.
Because having a tattered rag on your back from time to time, which attracts all disasters until it falls to pieces, would be much more efficient and significantly less costly than is ruining your clothing sequentially, but life doesn’t work that way, does it.
Indeed there’s something to be said for paper garments akin to those worn by hospital patients and so speaks a man who is heading into a weekend that will feature woodland walks, messy dogs, a grass-cutting outing and a humungous bonfire.
So, I’ll be in the market for three or more likely four new shirts next week. On to the news:
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BOOK REVIEW: THINKING FAST & SLOW. DANIEL KAHNEMAN. Daniel Kahneman is a psychologist famous for his work on decision making. He won the Nobel prize for economics in 2002. We’re just scratching the surface here & will run a bit more on Monday. 6 Sept 2019:
Setting the scene:
• We are what we are. Education, even civilisation, only goes so far. We are, ultimately, a prisoner to our DNA. We have been educated and somewhat civilised (in Langton’s case) for perhaps 200yrs. In other instances, perhaps for 2,000yrs. We scurried around the Savannah eating berries and avoiding snakes, however, for perhaps 100 times that long. See Premium Email.
GREENE KING: GNK has updated on its first 18w trading. 6 Sept 2019:
Greene King, which has agreed to be acquired by Chinese investor CKA, has updated on trading for the first 18 weeks of its current financial year. Our comments are set out below:
• Greene King reports that LfL managed sales were down 1.8% in the first 18w of its financial year
Tenanted & Leased Pubs:
• Greene King reports ‘LfL net income in Pub Partners was down 4.2% for the first 16 weeks, driven by softer LFL beer sales following last year’s comparatives.’ See Premium Email.
GENERAL NEWS – PUBS & RESTAURANTS:
• The Good Pub Guide has reported that the cost of a pint of beer has increased in the past year by 10p to £3.79. Whilst this is a national average, the price ranges between around £3.46 in Shropshire up to £4.57 in London. Beer in Yorkshire costs £3.53 on average.
• Coffee chain Grind, which reported numbers to Companies’ House showing that it has lost £4.5m since incorporation, is said to be planning more than triple its number of sites after securing £4.6m funding from HSBC. Grind has 11 units at present. Grind CEO David Abrahamovitch says ‘with HSBC’s support, plus our recent £3.4m crowdfunding equity campaign, we are stronger than ever, with the funding we need to execute our plan and keep growing across London and beyond.’
• In the US, Bellwether Coffee has raised $40m in Series B funding. The company produces hardware and software for coffee roasting.
• Britvic has announced that, further to its announcement on 11 March 2019, Ms Joanne Wilson is now confirmed as joining the company as Chief Financial Officer of on 9 September 2019.
• Campari has completed the acquisition of French rhum agricole brands Trois Rivières and La Mauny for €60 million. Campari says ‘with this acquisition Campari Group will add prestigious agricole rum brands to its offering and enhance its exposure to rum, a premiumising category currently at the heart of the mixology trend and growing cocktail culture.’ It adds ‘moreover, Campari Group will add significant critical mass in France, poised to become one of the Group’s strategic markets.’
• Pernod Ricard has announced that it plans to build a malt whisky distillery in Sichuan, China, at a cost of some $150m. Pernod says ‘the ground-breaking of the distillery signifies the beginning of a journey of innovation, expertise and dedication to craft a new, iconic malt whisky that embraces whisky history and heritage with a character unique to Chinese culture.’
• US restaurant sales fell by 0.7% on a LfL basis in August reports TDn2K. This is the second consecutive month of decline. Journal NRN reports ‘the latest disappointing results could not be attributed to any external factors, thus raising questions about the current health of the industry.’
• TDn2K reports ‘August’s same-store sales growth compared with the same month two years ago is actually an encouraging 1.2%.’
• Brinker International has completed the acquisition of 116 Chili’s Grill & Bar restaurants from its 14-year franchisee, ERJ Dining.
• McDonald’s has added DoorDash in the US as a delivery partner. DoorDash joins long-time partner Uber Eats.
• Patisserie Holdings is likely to move from that administrator’s hands to those of a liquidator later this month.
• The British Medical Journal suggests that increasing the cost of sugary snacks could be more effective at tackling obesity than the tax on sugary drinks has been. The BMJ maintains that, whilst sugary drinks are high-profile, high sugar snacks including biscuits, cakes, chocolates and sweets are responsible for a greater proportion of the nation’s sugar and energy intake.
• The Meatless Farm Co has secured a listing with Brakes. The demand for vegan products is said to have risen by up to 300% this year.
• Propel has reported that Russia-based Dodo Pizza intends to become the second largest pizza delivery company in the UK over the next 10yrs.
HOLIDAYS & LEISURE TRAVEL:
• Dart Group’s shares fell sharply yesterday but recovered to close little-changed on its cautious trading update at 738.5p (down 1.5p).
• Visit England is seeking to persuade young Brits to take a short break in the UK with a series of new short films. Observers have recently suggested that the move towards more staycations has negative implications for the overseas tour operators.
• Visit Britain says ‘we want more young Brits to get out and experience the amazing destinations and activities on our doorstep whether learning how to paddle-board in London, switching off in a log cabin in the Cairngorms in Scotland or tackling cliff camping in Anglesey.’
• PPHE yesterday reported H1 numbers saying LfL EBITDA had grown by 5.7% with the group’s performance ‘supported by recent investments in the hospitality real estate portfolio and RevPAR outperformance in London.’
• PPHE’s CEO Boris Ivesha says ‘we are pleased to report a good first half performance, with continued revenue growth and Group like-for-like EBITDA up 5.7%. This reflects an increase in all of our key operating metrics, with good growth in occupancy and average room rate both contributing to strong RevPAR growth, as well as to the strength of our portfolio. This performance has been driven by a solid operating performance from our UK hotel portfolio.’
• PPHE implies that what some observers have suggested was a slowdown in recent months has had little impact & says ‘we continue to expect PPHE’s full year performance to be in line with previous expectations.’
• The European aviation safety watchdog will not simply take the word of its US peers when it comes to the safety or otherwise of Boeing’s troubled 737 Max reports the European Aviation Safety Agency. The European body will run its own tests on the plane before approving a return to commercial flying.
• UK-based airlines will be able to fly to EU destinations until at least October 2020, irrespective of what happens with Brexit, due to ‘unilateral contingency’ legislation. Transport minister Grant Shapps has welcomed the news saying ‘connectivity is at the forefront of this government’s vision for a global, outward-facing Britain.’
• Tour operators will be pleased though there could still be issues re queues in airports and the like as a degree of uncertainty remains as to just what legislation will be in place in time for next summer.
• ABTA says it ‘has been pushing hard for this extension, which is to the mutual benefit of UK customers and the EU, and we are encouraged that the European Commission has responded today by extending the deadline.’
• BA pilots have confirmed two days of strikes next week.
FINANCE & ECONOMICS:
• Telegraph reports that Sajid Javid has found the Magic Money Tree. Lower bond yields have made debt servicing cheaper – but there is no guarantee that that will last.
• Sterling up again on Brexit delay or cancellation hopes at $1.2326 and €1.1167. Oil up a little at $60.97. UK 10yr gilt yield up sharply by 12bps at 0.60%. World markets up yesterday except the UK with the Far East up in Friday trade.
• Brexit & politics:
o Boris Johnson has taken a hatchet to the Cabinet that he inherited, lost his first four votes in the Commons, has excommunicated 21 of his own MPs, lost one via desertion to the Lib Dems and now his own brother has stood down citing irreconcilable conflicts and a desire to spend less time with his family.
o Mr Johnson’s former boss at the Telegraph, Max Hastings, has told BBC Politics Live that Mr Johnson thinks about himself, himself, himself, his party and his country in that order.
o Mr Johnson has lost his wife, some friends, 20-odd colleagues and now his brother. He has added a girlfriend little-more than half his age, and incontinent puppy and Dominic Cummings. He now says he would rather be ‘dead in a ditch’ than delay Brexit. Some may question his judgement & he appears to be somewhat boxed in.
o EU said to believe that, if Mr Johnson had a plan, they would have heard about it by now.
o The CBI has welcomed moves to head off a no-deal Brexit.
o The PM is to try to get Commons approval for an election again next week. He was in Yorkshire yesterday giving speeches that he would like to see kick-start an election campaign.
o FT suggesting that the Labour leader Jeremy Corbyn looks increasingly likely to reject any snap election.
START THE DAY WITH A SONG:
• The song is taking a short break due to exam commitments.
RETAIL WITH NICK BUBB:
• BDO High Street Sales Tracker: We flagged on Wednesday that the John Lewis sales figures for last week were bad, because of the impact of the Bank Holiday heatwave, and today’s BDO High Street Sales Tracker for medium-sized Non-Food chains (which has been reporting suspiciously good progress in recent weeks) is also bad. In w/e Sunday Sept 1sth, BDO Fashion sales were down by 4.6% LFL (including Online), breaking an improbable fifteen week run of growth…And total BDO LFL sales (including Homewares and Lifestyle sales) were down by 4.1% last week (down by 6.5% in Store sales and up by only 5.7% in Online sales).
• News Flow Next Week: The political drama will continue in Westminster next week, as the increasingly hapless and beleaguered Prime Minister tries to force a General Election in mid-October, but there is plenty going on in Retailing to distract is, kicking off on Monday, with the ABF (Primark) pre-close trading update. On Tuesday we then get the JD Sports interims, whilst the embattled Sports Direct and Superdry both hold their AGM’s on Wednesday. Thursday then brings the Morrisons interims and the John Lewis Partnership interims.