Langton Capital – 2022-02-02 – Starbucks, Playtech, Duty, the consumer, CO2, business rates etc.:
Starbucks, Playtech, Duty, the consumer, CO2, business rates etc.:A DAY IN THE LIFE: Another disrupted day yesterday and, this time, I can’t blame our current Prime Minister. No, it was a boiler replacement which, though necessary, necessitates shepherding the dog carefully from room to room and is one of those things that, if you’re lucky and it goes well, will leave you without hot water for only the single 48hrs and then will make you a few grand poorer and in exactly the same position as you were prior to the repair. Such is life and, elsewhere, the mini-fridge is going to have to go. Because it only has two temperatures. Frozen solid and lukewarm and, since neither of those two is much good if you leave your milk in it overnight & are gasping for a cup of tea come the morning, another solution will have to be found. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Full stories are in the Premium Email. Reply to this email if you would like to upgrade. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new Mrmat. Prices for the Premium, unchanged for 2yrs, are £295 for one subscription, £495 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE PUBS & RESTAURANTS: Alcohol duty: UK Hospitality has urged the government to raise levels of alcohol duty relief to at least 20%. Currently the discount will only apply to products in 40-litre plus containers and the body is asking that it be expanded so containers of 20-litres plus are brought into scope. • See premium. Reply to this email to upgrade. Affordability: Kantar reports that annual food bills are set to rise by £180 on average as the cost of living squeeze continues to hit household budgets. Annual grocery inflation was 3.8% over the past four weeks, up from 3.5% in December. • See premium. Reply to this email to upgrade. The ONS has reported that over one in five people are cutting back on their use of gas and electricity as prices rise. Whilst this could leave more money available to spend on hospitality goods & services, the ONS says that 53% of people surveyed were spending less on non-essentials and 26% were eating into their savings. Supply issues – CO2: A new deal has been organised with CF Industries in order to secure supplies of CO2. This will come as a relief to the food industry and to retailers of food including the hospitality industry. The UK business department says ‘the carbon dioxide industry has come to an agreement to ensure UK businesses have access to a sustainable supply of CO2 – an essential component of the national economy.’ It says ‘the deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high. It means key sectors, including food processing and nuclear power, are ensured supplies of CO2.’ • See premium. Reply to this email to upgrade. Business rates & The Pub: A parliamentary inquiry has been launched into pubs’ business rates. It has kicked off with a Call for Evidence. The All-party Parliamentary Beer Group reports that it is ‘conducting an inquiry into pubs’ business rates and asks individual licensees, organisations and other interested parties to submit any evidence or ideas for reform that they would like to have considered by Wednesday 17th February 2022.’ The enquiry seeks to ‘understand the impact of business rates on pubs’ operations in England and the efficacy of the valuation process and appeals system, the fairness of business rates on a sectoral basis and the impact of the Government’s current proposals for reform.’ It will further seek to explore the role that hospitality can play ‘as a catalyst for inward investment, high street regeneration and employment and skills growth.’ • See premium. Reply to this email to upgrade. The US market: The National Restaurant Association in the US has suggested in its 2022 State of the Restaurant Industry Report that the US industry will achieve sales of $898m this year, a move that would take it well above pre-pandemic levels. Prices are up but volumes are down. • See premium. Reply to this email to upgrade. More on the consumer, inflation etc. Sky comments on the PM’s levelling up scheme & says that new analysis shared with it ‘concludes that the government’s efforts to level up the most deprived parts of the UK will fail without a shift in focus.’ It says the New Economics Foundation says the current plans, which prioritise place-based funding, fall short – as they don’t put enough emphasis on investing in people. The NEF says ‘if you look at much of the country that’s held back, that remedy just doesn’t work. You need to start with the people, you need to start trying to drive up living standards.’ The BRC meanwhile has said that the outlook on inflation is poor with no end in sight to price rises. It quotes Nielsen figures, which say that shop inflation jumped from 0.8% to 1.5% in shops between December and January alone. Non-food inflation picked up from minus 0.2% in December to 0.9% in January. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: JD Wetherspoon CFO Ben Whitley sold 1000 of the Company’s ordinary shares at a price of £9.06 pence per share on 1st February 2022 on the London Stock Exchange. Grind reported turnover of £2m for the year ended 30 April 2021, compared to £11.4m in the year prior. The company saw an EBITDA loss of £1.2m (2020: £772k loss), which directors said was a satisfying containment of losses given the level of disruption. The company secured £2.3m from the CBIL scheme via HSBC. Starbucks reported Q1 numbers yesterday saying that US LfL sales were up 18% and global same-store sales up 13%. It reported net income growth behind expectations. The company says ‘as we enter the third year of this pandemic, our stores continue to play an important role as a community gathering place that offers safe, familiar and convenient experiences for our customers.’ It adds ‘although demand was strong, this pandemic has not been linear, and the macro environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron and a tight labour market.’ The company reports total revenues up 19% at $8.1 Billion. It says that EPS for the quarter was 69c and adds that new openings in China have taken the total number of stores there to above 5,500. The company says ‘this holiday quarter delivered strong revenue growth highlighted by incredible customer demand for Starbucks.’ It adds ‘we remain focused on actions that drive both top and bottom line growth, including industry-leading investments to attract, train and retain the best talent for our stores as customer occasions increase.’ • See premium. Reply to this email to upgrade. Whitbread is set to take its Bar + Block steakhouse chain to 20 sites across the UK, with two new sites opening in London in Hammersmith and Paddington. Cotswold Distillery is set to become England’s largest whisky producer, with an expanded distillery capable of making 500,000 litres of pure alcohol per year. The company’s Cotswolds Single Malt Whisky grew 122% in the off-trade year on year, according to Nielsen. Windsor & Eton Brewery will brew CASTLE HILL, a beer to celebrate The Queen’s Platinum Jubilee. The official launch is taking place at the Windsor Farm Shop and the brewery on Friday 18th February. Tesco warns that 1,600 jobs are at risk as it ends overnight restocking at some stores and converts some petrol sites to pay-at-pump during the night. It said restocking shelves during the day would mean more staff could be on the shop floor at peak times. Starbucks Workers United is now running union campaigns in 60 Starbucks’ stores in 19 states. LEISURE TRAVEL & HOTELS: Jo Rzymowska, Celebrity Cruises vice president and managing director EMEA, said the recent easing of restrictions has boosted consumer demand for European and Caribbean sailings. Ryzmowska said ‘we’re definitely seeing a difference in demand overall for the summer for Q3 onwards. We’re seeing good demand.’ Merlin Entertainments names Aramark as its food and beverage partner for five locations in the UK and two in the US, including: Alton Towers Resort, Chessington World of Adventures Resort, Thorpe Park Resort, Warwick Castle and LEGOLAND Windsor Resort in the UK, and LEGOLAND California Resort and LEGOLAND Florida Resort in the US. Britannia and Mercure have been ranked the UK’s worst hotel chains for cleanliness, bathrooms and value for money. It is the ninth consecutive year that Britannia has come last, receiving an average customer score of only 49% this year. IHG Hotels & Resorts projects that it will open over 50 hotels in 24 countries this year in destinations from Rome to Riyadh and Melbourne to Mallorca. OTHER LEISURE: Playtech has commented on proposals it has received. It says it may not receive the 75% approval that it needs at its meeting later in order to proceed with the cash offer from Aristocrat (UK) Holdings Limited and says, if that is the case, then ‘the Scheme will lapse and the offer period for the Company will end.’ Playtech says it is ‘undergoing a significant transition, and the Board remains very confident about the positive long term prospects for the Group. This is also evidenced in the recent trading performance across both its core B2B and B2C businesses as further detailed below.’ The company also updates on trading. • See premium. Reply to this email to upgrade. Alphabet has updated on trading saying that it generated revenues of $75.3bn for the last quarter of calendar 2021. Ad revenue was $61.2bn for the quarter, up from $46.2bn the same time last year. The company says ‘our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products.’ Deloitte’s Sports Business Group has said that Premier League clubs spent four times as much money during the January transfer window than in the same period in 2021. It says that some £295m was spent in total, compared with £70m in 2021. • See premium. Reply to this email to upgrade. FINANCE & MARKETS: Markit has reported that the UK manufacturing industry started 2022 strongly, although its index fell slightly to 57.3 in January, down from 57.9 in December. It says ‘the marginal dip in the index level reflected slower growth of new orders and a further easing in the rate of increase in vendor lead times.’ Some contributors mentioned that ‘supply chain stresses, staff shortages and slower growth of new work had stymied efforts to raise production further.’ • See premium. Reply to this email to upgrade. The Nationwide Building Society yesterday reported that ‘house price growth makes a strong start to 2022’. It says that ‘annual house price growth increased to 11.2% in January, from 10.4% in December’ with ‘prices up 0.8% month-on-month.’ It says this is the ‘strongest start to the year since 2005.’ • See premium. Reply to this email to upgrade. Sterling up at $1.3516 and €1.1989. Oil price a shade lower at $89.37. UK 10yr gilt yield up 1bp at 1.31%. World markets better yesterday and London set to open around 39pts higher as at 7am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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