Langton Capital – 2022-02-03 – Compass Group, Starbucks, mortgage rates, energy costs, spending etc.:
Compass Group, Starbucks, mortgage rates, energy costs, spending etc.:A DAY IN THE LIFE: If only money grew on trees. Though maybe it does because yesterday, we received a letter from Funding Circle offering us £50,000 and another from Iwoca (who they?) offering us a ‘bridging loan’ of anything between £1,000 and £200,000 with potentially instant access. We then got a phone call from PayPal offering us money, business loans, invoice discounting and the rest, so what’s going on? Emails, which are cheap to send, probably go to spam and I never even know I’ve had them and the letters are similarly easy to ignore. But they cost a few seconds to open and bin-chuck and, for the ‘bank’, they’re expensive to send and paying some numpty to ring up ‘potential clients’ is even more so. And it’s easy to block you realise they’ve got your mobile number somehow so heaven knows what the ‘customer acquisition’ costs of these companies are. Hence, once you factor in acquisition costs, adverse selection (only people you don’t want to lend money to will say yes to a loan) and the fact that the rates have to be jaw-dropping because the good customers will end up paying the costs of the bad, this just doesn’t look like a particularly clever business model. But what would we know. Maybe they’re all making a roaring success of it. 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 GENERAL THOUGHTS: THE CONSUMER… The Consumer Squeeze Client copy PUBS & RESTAURANTS: The consumer: The government is planning to reduce energy bills for all households by about £200, to ease the impact of a dramatic rise in the cost of gas, according to bosses from two energy companies. The Treasury is putting the finishing touches to a £5-6bn loan package for firms, enabling them to reduce bills. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Compass Group has updated on its first three months trading (to end 31 December 2021) saying that it has had an ‘encouraging start to the year driven by continued improvement across all sectors.’ It says that group organic revenue ‘grew by 38.6% in the first quarter, with revenues reaching 97% of their pre-COVID level.’ • See premium. Reply to this email to upgrade. Referring to the impact of price rises (it has put through two in a quarter), Starbucks says that in ‘terms of elasticity, we have not seen any meaningful impact to customer demand.’ The CEO says ‘to the contrary, our customer demand continues to grow. We’re coming off a very strong quarter in terms of transaction growth at 12% for the quarter in the U.S., the highest since pre-pandemic levels, and our ticket is also very strong as well.’ Pret A Manger sales of cappuccinos and tuna baguettes grew faster in London’s financial districts last week than in any other UK areas, as staff are called back into offices. Bloomberg’s Pret Index shows transactions are now 68% of pre-pandemic levels in the cluster that includes the City and Canary Wharf. • See premium. Reply to this email to upgrade. Pret has increased the price of its coffee subscription by £5 to £25 on the back of significant cost headwinds. The company says that the increase will take effect for new subscribers from today but it will not impact existing subscribers until 16 March. Pret says ‘since we launched The Pret Coffee Subscription in 2020, prices for ingredients such as coffee beans and milk have gone up, VAT is increasing to 20%, and we’ve invested in additional pay for Pret team members.’ The MCA points out that, last month, the business announced would be investing over £9m in increased staff pay. Pret has told Bloomberg that the price Pret has paid for Arabica coffee beans has gone up by 40% between 2020 and today. is set to reach +40%. A ransomware attack on KP Snacks may lead to a shortage of the operators’ goods on shelves in coming weeks. KP told Sky ‘as soon as we became aware of the incident, we enacted our cybersecurity response plan and engaged a leading forensic information technology firm and legal counsel to assist us in our investigation.’ The Times reports that Merlin Entertainments is to take over Cadbury World under a 50-year deal that ‘adds the attraction in Bournville to a portfolio that includes Legoland, Sea Life and Madame Tussauds.’ • See premium. Reply to this email to upgrade. Fuller’s has tweeted extolling the virtues of its winterised gardens. It says ‘a winterised garden seems like a contradiction but since the summer, a number of Fuller’s pub gardens have been undergoing major makeovers to ensure their outdoor spaces will see customers through the winter with weatherproof rooftops, heated terraces and blankets aplenty.’ • See premium. Reply to this email to upgrade. Brakspear has acquired a new site for Honeycomb Houses. The purchase of Ghyll Manor, a historic hotel with a wedding and functions business near Horsham, West Sussex, will take the division up to 10 pubs. Joe & the Juice’s parent company received a £34.7m cash injection last year, paving the way for the Danish juice and healthy food concept’s expansion. Joe & the Juice currently has more than 50 stores in the UK. Amazon announces that it will create 1,500 new apprenticeships in the UK this year as it revealed its workforce in the country grew to 70,000 in 2021. The company will offer new places on 40 different schemes – including 200 degree-level places. LEISURE TRAVEL & HOTELS: HotStats has updated on the global hotel market saying that ‘in a year full of abnormality, 2021 ended on a more settled note.’ It says ‘the global hotel industry’s climb back to profitability has not been easy, but it trudged back and, despite a dearth lack of corporate and group travel, ended 2021 almost back to 2019 levels—the recognized baseline of recovery.’ • See premium. Reply to this email to upgrade. The World Travel & Tourism Council forecasts that travel & tourism’s contribution to the global economy could reach $8.6 trillion this year, compared to $9.2 trillion in 2019. If the vaccine and booster rollout continue at pace this year, and restrictions to international travel are eased around the world throughout the year, the contribution would be just 6.4% down on pre-pandemic levels. Hays Travel reports sales at January 2020 levels for the first time since the start of the pandemic. A company spokesperson credited the government’s relaxation of travel restrictions for arrivals to the UK from February 11 for boosting holiday sales. Research from Accor suggests that almost four in five UK residents intend to travel in 2022, with respondents planning to spend 39% more on travel this year compared with 2019 and take an average of three trips throughout 2022. Travel Wright is set to close after 96 years in business, with the great-grandchildren of the founder looking to retire. Dalata Hotel Group has agreed contracts with Art-Invest Real Estate to acquire a new operating leasehold interest in Hotel Nikko Düsseldorf. The 4-star hotel is centrally located in Düsseldorf, in close proximity to the Central Business District. OTHER LEISURE: Playtech says this morning that ‘further to the recent media speculation [it] confirms that on the afternoon of 2 February 2022 it was contacted by TTB Partners Limited on behalf of an investor group…requesting that Playtech consent to release TTB from its restrictions under Rule 2.8 of the Code. This release was requested to allow a possible offer for the Company to be considered. The Board confirms that it has given the requested consent to TTB. There can be no certainty as to whether this will result in an offer for the Company, nor as to the terms on which any offer might be made. However, any offer, if made, is likely to be in cash.’ Facebook yesterday reported Q4 numbers and announced that the number of ‘daily active users’ fell for the first time in its 18-year history. Meta said that DAUs fell to 1.929bn in the three months to the end of December, compared to 1.930bn in the previous quarter. The shares dropped by around a fifth. Facebook, an icon of the naughties, said that it was facing more competition from the likes of TikTok and YouTube. • See premium. Reply to this email to upgrade. Spotify has said it is “too early to know” if the row over Joe Rogan’s podcast will hit the company. Sony upgrades its profit forecasts for the year after reporting a strong Q3, propelled by the success of ‘Spider-Man: No Way Home’. Operating profit at its pictures business jumped by more than seven-fold to 149.4 billion yen ($1.30 billion). It now expects the business to post a profit of 205 billion yen in the current fiscal year. FINANCE & MARKETS: Inflation in the eurozone hit a record 5.1 per cent in the year to January. Energy prices were up some 28.6 per cent over the year. The rate of inflation had been expected to fall. German inflation fell to 5.1 per cent in January, down from 5.7 per cent in December. Inflation in Spain was 6.1 per cent. Interest rate expectations: Markit reports that ‘UK households are bracing for an imminent rate hike.’ It surveyed 1,500 UK households and says 49% expect interest rates to rise in the next three months. Only 6% expect a cut. The net balance of +43 is up from +36 in December and is the highest on record. The Bank of England’s MPC will opine at 12.00 today. Markit says ‘UK households have grown increasingly certain of the Bank of England hiking interest rates for a second meeting in succession, with expectations of tighter policy having spiked higher since last October as inflation worries took hold.’ Sterling mixed to better at $1.3547 and €1.1988. Oil price lower at $89.00 and UK 10yr gilt yield down 5bps at 1.26%. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
|