City Pub Group, WFH, footfall, Nichols, Chipotle, Pepsi & other:

A DAY IN THE LIFE:

Well, it’s Wednesday and, as it’s got five working days in it this time, the week already feels rather long. And, wouldn’t you know it, we’ve run out of time. On to the news:

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CITY PUB GROUP – FULL YEAR NUMBERS:

City Pub Group has this morning reported full year numbers and our comments thereon are set out below:

Headline numbers:

• CPC reports revenues for the 52 weeks of £35.4m (2020: £25.8m) with adjusted EBITDA of £3.8m on a pre-IFRS16 basis (2020: £0.8m loss).

• The company reports an adjusted PBT of £1.0m vs a loss of £5.1m last year. CPC reports a loss per share of 2.76p vs a loss of 7.15p in FY20. The company intends to recommence dividend payments in September at its H1 numbers.

• City Pub Group reports that ‘since the last statement in September 2021, the business has emerged fully from the COVID-19 lockdowns in 2021 and Omicron over the 2021 festive season and into 2022. All our 40 pubs have reopened and most of the estate is now trading normally.’

• It says ‘by November last year, following the lifting of restrictions, we were trading ahead of 2019’s level demonstrating demand and the recovery of our business but that growing momentum reversed with the outbreak of Omicron in December 2021.’

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PUBS & RESTAURANTS:

WFH

New research from the Chartered Institute for Personnel & Development has commented on the move towards a hybrid model of working, saying that a ‘growing number of employers report increased productivity as they embrace home and hybrid working.’ Opinions are very divided on this issue.

The CIPD says ‘when asked in December 2020, a third (33%) of employers said homeworking had increased their organisation’s productivity or efficiency. However, when asked about increased home/hybrid working in October/November 2021, over two-fifths (41%) said these new ways of working had increased this.’

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Footfall:

Springboard has updated on footfall saying that, last week, numbers were up 12.7% year on year, but they were down 12.8% compared with the same week in 2019.

Food prices.

Kantar suggests that the average food bill could rise by £271 this year. It suggests that discount retailers may be expected to perform relatively strongly. Kantar says much of the rise in costs will be down to ‘non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies.’

More generally, the World Bank has warned that the war in Ukraine is set to cause the “largest commodity shock” since the 1970s.

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Other news:

UK Hospitality has backed calls for a Government support package to help counter shortages in night-time sector door staff, including assistance in recruitment and training of additional security staff, especially women.

Mobility comments – Bloomberg Pret Index:

The index shows a fall in sales at Pret’s airport units as a part of a wider fall across many other clusters of shops. Airport sales were down 11pps to 112% of their pre-pandemic numbers. Bloomberg says ‘flight cancellations over the Easter holidays ended a three-month streak of gains in coffee and sandwich sales.’ Delays can lead to increases in sales in the short term but, over time, they tend to dissuade would-be travellers from making the effort.

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UK Hospitality Cymru has warned that the industry needs more ‘TLC’ and less taxes, according to Executive Director David Chapman. Chapman contested that the Visitor Levy is ‘the wrong tax at the wrong time’.

The Scotch Whisky Association (SWA) claims that cutting tax on Scotch exports to India could open up as many as 1,300 Scottish jobs as well as generating an additional £1.2 billion in Scotch sales.

New licensing hours for the Queen’s Platinum Jubilee will see pubs, bars and nightclubs open until 1am, instead of the usual 11pm, from Thursday 2 June to Saturday 4 June. BBPC CEO Emma McClarkin said the announcement of extended opening hours would be a “further boost” to an already joyous occasion. 

COMPANY NEWS:

Nichols plc has updated on trading in a statement to be read at its AGM later today. The company says that ‘group revenue for the period continued to demonstrate strong growth, increasing 28.9% year-on-year to £39.6m.’ it says ‘the Vimto brand has outperformed the wider UK soft drinks market, achieving growth of 10.8% in value terms in the year to date, versus 9.8% value growth across the wider UK soft drinks market.’

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Chipotle Mexican Grill has reported Q1 sales, saying that revenues rose by 9% on a same-store basis to $2bn with total sales up by 16%. The group says that operating margin was 20.7%, down from 22.3% in the first quarter last year on the back of higher wages and food costs.

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PepsiCo yesterday beat Wall Street’s estimates for its Q1 earnings and revenue. The company reported revenue of $16.2 billion vs estimates of $15.56 billion and raised its full-year forecast for revenue growth. Net income was $4.26 billion, or $3.06 per share, up from $1.71 billion, or $1.24 per share, in the prior year.

The MCA reports that Black Sheep Coffee has 51 sites in the pipeline which were agreed pre-pandemic which it expects to open in the next 12 months. The coffee chain currently operates 49 sites and said of these new shops, around half would go to franchisees.

Boston Beer reports that ‘first quarter performance suffered by comparison’ top last year as shipment volumes were 25% lower. The company’s shares are currently trading at $350 compared to a share price of $1200 this time last year. Conversely, CEO Dave Burwick’s remuneration nearly tripled to $15 million last year. Truly – its hard seltzer brand – declined by 15% in volume and 10% in dollar sales in measured off-trade channels and lost market share in Q1.

The Inn Hospitality Group has added three pubs in Northumberland to its estate. .

HOLIDAYS & LEISURE TRAVEL:

The Times reports that  there has been an ‘unprecedented’ surge in demand for passport applications after Covid travel restrictions were relaxed. It reported that MPs told the Commons on Monday that a 10-week target for processing applications was being ‘repeatedly breached’.

Cirium reports that the number of scheduled flight departures from the UK over the forthcoming early May bank holiday weekend is six times that seen during the same holiday period last year. There are 7,068 scheduled departures from April 30-May 2, equating to more than 1.2 million seats, up 521% YoY.

Carnival Corporation’s president and CEO Arnold Donald will step down in August, assuming the role of vice-chair and retaining a board seat. Chief operating officer Josh Weinstein will be taking over as president and chief executive from 1 August.

STR reports that Marriott International CEO Anthony Capuano is optimistic about the return of corporate travel to Europe. Capuano said ‘Leisure remains the hare, group the tortoise, but the signs are pretty encouraging. Whereas there was pent-up demand for leisure, there now is for business.

Heathrow forecasts that it will cater for 52.8m passengers in 2022 – up from a previous forecast of 45.5m. This new figure would represent 65% of Heathrow’s pre-Covid annual passenger traffic. Passenger numbers rose to 9.7m at Heathrow during Q1 which was ‘in line with forecasts’.

OTHER LEISURE:

Sportech has announces a distribution of 7.0 pence per share in cash amounting to, in aggregate, £7,000,000. It says it is conducting this ‘following the successful sale of the terrestrial lottery business, ‘Dominican Republic Lottery contract’, announced in January 2022 for £9.25 million gross.

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At least 17 million homes in Europe are estimated to be password sharing their Netflix accounts. Netflix announced plans to crack down on the practice as one of a number of strategic moves designed to stem investor panic after it had more than $60bn wiped off its market value last week when it reported its first loss of subscribers in a decade.

Elon Musk’s acquisition has drawn warnings from Boris Johnson’s spokesman as well as the European Commission, calling for responsibility and protection of users. Musk has vowed to relax content restrictions, but how to do this while also clamping down on misinformation will be the key challenge.

Alphabet (formerly Google) yesterday reported q1 numbers saying that Q1 sales were a mammoth $68.0bn, up 23% on last year and pretty much in line with estimates of $68.1bn. The group reported a slight undershoot on Q1 profits at $16.436bn, or $24.62 per share. Estimates were around $25.76 per share.

FINANCE & MARKETS:

The CBI reported yesterday that ‘optimism fell sharply in April, as growth in manufacturing output and new orders slowed and costs and selling prices grew at their fastest paces in over 40 years. Investment intentions weakened notably, but employment growth improved and is expected to pick up further next quarter.’

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Public sector net borrowing was £151.8bn in the full financial year ending March 2022, the third-highest financial year borrowing since records began.

The BCC Director General, Shevaun Haviland, has commented on UK / US trade moves saying ‘the BCC has been calling for practical actions to boost UK-US trade’ and adds the Chamber Network looks forward to engaging with both Governments’ teams in the coming weeks to turn these optimistic steps into concrete actions to boost UK-US trade by the end of this year.’

Sterling weaker at $1.2584 and €1.1816. Oil price up at $105.36. UK 10yr gilt yield down a further 5bps at 1.79%. World markets heading lower yesterday on China lockdown fears. London set to open up around 4pts as at 7am.

RETAIL WITH NICK BUBB:

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