Langton Capital – 2022-06-08 – City Pub, Fulham Shore, discounts, cost of living, flight cancellations etc.:
City Pub, Fulham Shore, discounts, cost of living, flight cancellations etc.:A DAY IN THE LIFE: Visiting a pub the other day, beer £4.20 a pint, very good for London, my mind was wandering and I considered cover versions of songs. So, here’s a couple of questions, one factual, the other subjective: • Which are the most covered songs of all time? • And which covers are demonstrably, if subjectively, better than the original? Bit pushed for time so on to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many 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 format. Prices for the Premium are £345 for one subscription, £595 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE QUESTION OF THE WEEK? Question of this week: What will happen to the delivery market now that restaurants are open again, times are getting hard and there may be some discounting? This is a vitally important, real-world question, the answer to which may determine whether delivery – or more specifically some of the companies within it – have much of a future. FULHAM SHORE – TRADING UPDATE: The Fulham Shore has today updated on trading for the first two months of its current financial year and our comments are set out below: Headline trading: • Fulham Shore says that it ‘has continued to trade well and in line with management expectations during April and May 2022.’ • It adds ‘we are now serving over 100,000 customers per week in Franco Manca and over 40,000 customers per week in The Real Greek, reflecting the popularity of the two businesses as well as their reputation for quality and value.’ • FUL says ‘tourists seem to have returned to London’s West End and many cities around the UK.’ • Re working from home, it says ‘the small number of Franco Manca and The Real Greek restaurants that are located in areas with a high proportion of offices still have a way to go to return to pre-pandemic levels but are showing continued improvement.’ • Re costs, the company says ‘industry-wide cost pressures have been mitigated by some menu inflation, successful negotiations on rent reviews and by the strong trading across the Group’s restaurants located in suburban areas and shopping centres.’ New sites: • FUL says ‘the Group grew by 10 new restaurants in the financial year ended 27 March 2022 and has opened three more since the year end.’ • It adds that ‘eight further Franco Manca are being fitted out throughout the UK’, suggesting that the rate of new openings has accelerated markedly. FUL says ‘overall, 11 new restaurants are on track to open in the first half of this financial year to March 2023 with two further locations already contracted. This will go some way to reach our total target of 18 sites for the whole year.’ Cash & debt: • Fulham shore says it has net cash before lease liabilities of £3.6m. It adds ‘the Group has undrawn bank facilities of £15.9m, providing substantial financial headroom of over £19m.’ Outlook • Strong trading, lower rents, more new-opening opportunities. • FUL is able to say that ‘trading has rebounded positively from the various Covid-19 interruptions and new openings in both of the businesses are performing strongly.’ • It says ‘our customer numbers continue to grow and we have an expansion programme targeting prime new locations benefitting from historically low rental levels, the likes of which have not been seen for many years.’ • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: Tied tenants: The state of the tenancy market in the UK may have been out of the news for a while, but a couple of surveys recently have updated on the situation facing the UK’s tenants. KAM Media reports that 70% of operators who received support from a pub company during the pandemic felt satisfied with the help provided. • See premium. Reply to this email to upgrade. A survey has shown that Admiral had the most satisfied tenants (80% with 13% dissatisfied), while Punch had the least satisfied (47% with 29% dissatisfied). Some 62% of tied tenants covered by the pubs code are ‘satisfied’ with the relationship with their pub company. Inflation & the cost of living crisis: Simon Williams, spokesperson for the RAC, has said ‘The cost of filling a 55-litre family car with petrol has now topped £98 for the first time in history…With analysts predicting that oil will average $135 a barrel for the rest of this year drivers need to brace themselves for average fuel prices rocketing to £2 a litre which would mean a fill-up would rise to…£110’. Startups.co.uk reports that ‘as the cost of living crisis continues to squeeze UK households, small businesses could bear the brunt as consumers will be making fewer purchases.’ When it asked 1,150 people which areas of spending they have already cut back on, or plan to cut back on, it says ‘spending less on ‘going out’ – defined as visiting bars, restaurants, cinemas, and theatres – was the most common answer amongst those consumers looking to reduce their 2022 household spending.’ • See premium. Reply to this email to upgrade. The Food Standards Agency has reported that food costs are a major worry for 76% of UK consumers. It says 22% of those surveyed in March said they skipped a meal or cut meal sizes because of affordability issues. Discounts: In the hope that the sun may shine at some point and the BBQ’s will come out, the Co-op is advertising a four plus four for four deal on TV. The off-trade retailer is offering four quarter pound burgers and four 330ml bottles of Stella for £4. Or, get this, for £3.60 for students. • See premium. Reply to this email to upgrade. Other news: Foodservice analyst Services sector PMI: S&P’s Service Sector PMI for the UK in May fell to 53.4 in May, down from 58.9 in April. • The flash number, which was released around 24th of the month, had been 51.8, suggesting that momentum may have picked up towards the end of the month.Fourth has launched its next-generation forecasting engine using machine-learning and AI-driven algorithms to build forecasting models for multi-site operators, claiming to be 25% more accurate than traditional models. At the London Wine Fair, WSTA CEO Miles Beales warned of a ‘tough autumn and winter’ and that ‘more than ever we need government to listen to because recovery is not a given’. CGA has written to clients and analysts saying that the company has been acquired by NielsenIQ, ‘bringing together specialist On and Off Trade services under one ownership structure’. CGA says ‘the logic for this union is clear, NielsenIQ are the global market leader for Off Premise data and insights and we know our combined client base has a thirst for a global On Premise read’. COMPANY NEWS: The City Pub Group has updated on trading saying that sales have continued to strengthen faster than predicted, with May 2022 some 5% ahead of May 2019. CPC says ‘last week’s trade – which included the Jubilee Bank Holiday Celebrations – was particularly strong, with LFL sales up in excess of 20% versus 2019. Whilst this is clearly a one-off event, it was great to see customers coming back to our pubs in force.’ • See premium. Reply to this email to upgrade. Liberation Group has reported full year numbers to January saying that turnover to £99.7m from £68.3m last year. The wider group reports underlying EBITDA of £9.5m (compared with an underlying EBITDA loss of £795k in the prior year). The group reports an operating profit of £2.5m (2021: loss £9.4m) and a loss after interest charges of £234k compared with an after-tax loss of £9.4m in the prior year. The Drinks Business reports that Coca-Cola has signed deals with both Molson Coors and Constellation Brands over the last couple of years, marking the company’s exploration into the alcoholic beverage industry. The soft drinks giant has a range of spirits-based ready-to-drink canned cocktails in the works with Constellation Brands, which is set to launch later this year. Cracker Barrel Old Country Store in the US has reported Q3 numbers saying that consumer confidence has been negatively impacted by inflation and higher petrol prices. It says ‘we anticipate the near-term pressures we faced on both our top and bottom lines in the third quarter to persist.’ Food chain solution company Fresho has raised some £8m in Series A financing. The company says that over 38,000 foodservice venues have used its software solution. The company employs around 60 people. PepsiCo India has announced a planned $24m expansion of its manufacturing facility in Kosi Kalan, Mathura. The facility currently produces PepsiCo’s Lay’s potato chip brand. The investment will increase capacity at the plant, by introducing a new manufacturing line to produce snacks under its Doritos brand. HOLIDAYS & LEISURE TRAVEL: The BBC reports that hundreds of flight cancellations have left thousands of people stranded abroad, with some passengers paying as much as £700 for alternative flights. • See premium. Reply to this email to upgrade. Haven will roll out Slim Chickens to three of its holiday parks this summer, with Food and Beverage Operations Director Cain Savazzi saying ‘We are constantly looking at ways to improve our guest food and beverage experience’. The largest rail strike in around forty years is currently on the cards for 21, 23 and 25 June after talks over pay fell through. Up to 40,000 staff from Network Rail and 13 train operators are likely to strike. London Underground RMT workers also plan to strike on 21 June. The strikes will coincide with the Glastonbury Festival. There are hopes this morning that talks will be resumed. HVS Market Pulse shows that demand in the Paris hotel sector continues to grow due to strong support from the French government combined with the continued worldwide appeal of Paris. Mathilde De Bona, an analyst with HVS London, said ‘The pandemic has proved the resilience of the market, with no significant, if any, distressed sales. Performance recorded in the second half of 2021 suggests that the hotel market could recover even earlier than expected’. Bespoke Hotels has acquired McMillan Hotels, adding three Scottish venues to its estate. The new additions are North West Castle (Stranraer), Cally Palace Hotel & Golf Course (Gatehouse of Fleet) and Fernhill Hotel (Portpatrick) OTHER LEISURE: Apple is planning a buy now pay later (BNPL) service, at least in the US. It is to allow users in the US to spread the cost of a purchase over six weeks, without interest or fees. FINANCE & MARKETS: Service sector PMI, see pubs & restaurants above. The World Bank has warned that many countries are facing recessions as the Ukraine war has continued to impact economies. The World Bank says ‘the war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid.’ Cazoo, online car retailer and candidate for the prize for least financially rewarding – at least for investors – IPO of 2021, has said it will cut around 750 jobs in order to reduce costs. Sterling higher at $1.2556 and €1.1759. Oil price up at $121.18. UK 10yr gilt yield down 4bps at 2.21%. World markets mixed yesterday. London set to open up around 20pts as at 6.30am. FORTHCOMING NEWS: A quiet week. City Pub Group and DP Eurasia are holding their AGMs today and Fuller’s full year numbers will be reported on Thursday. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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