Langton House – 2019-07-30 – Greggs, Byron, Ryanair & others
Greggs, Byron, Ryanair & others
A DAY IN THE LIFE:
So, after once again feeling the need to spend £30 plus on burgers, coffee and water for three in a blood-sucking airport concession, we’ve managed to get away on hols and, threats from baggage handlers and the rest notwithstanding, we’ve made it to Italy.
And first impressions (albeit initially just of Venice Airport) were very good.
Classy atmosphere, more marble than Formica and inbound flights from Seoul, San Francisco and Durban rather than Leeds Bradford, Doncaster Robin Hood & Durham Tees Valley but all of that fell to pieces when we got to the car hire because, a sweaty one and a quarter hours later, we still hadn’t got our car.
And when we did get to the front of the queue, they tried to upsell us a different model, an insurance waiver, car seat, sat nav and heaven knows what else totalling (for you Mark, because I like you, and my boss he like you too) €60 a day (down from €100+) which was a bit irritating because it’s what had caused the queue in the first place and it would have added 150% to the cost of the car hire.
Still, we survived the drive over to Lake Garda and can report that it’s stunning. It’s been 37 degrees with thunder storms fit to shake your fillings out but it’s cooling down and we can just about cope.
Anyway, elements of Langton are on holiday this week and next. The email could be a little bit shorter. On to the news:
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GENERAL NEWS – PUBS & RESTAURANTS:
Greggs reports H1 sales up 14.7% to £546m with company-managed shop like-for-like sales up 10.5%. The results were driven by ‘exceptionally strong trading built on the successful end to 2018, and helped by the popularity of the new vegan-friendly sausage roll.’
Greggs was trading from 1,984 stores by the end of H1, with 54 openings and 23 closures during the period. The company expects to open around 100 net new shops for the year as a whole.
Roger Whiteside, Greggs CEO, said ‘Given the strength of our year to date and the outlook, we have decided to increase investment in strategic initiatives in the second half of the year to help to deliver an even stronger customer proposition and further growth in the years ahead. Our expectations for underlying profits for the year as a whole remain unchanged.’
Deloitte reports the UK leisure consumer continues to be resilient in its Q2 2019 Leisure Consumer report. The report claims leisure spending grew by 1% in Q2 despite consumer confidence being down by four points.
Deliveroo launches a helicopter dining experience, allowing customers to eat their Deliveroo while flying 1,000ft in the air. Diners will depart from Battersea heliport on RooCopter One having had their chosen food delivered to the spot.
Just Eat has seen its shares surge (+25% to 785p) on the back of the group’s announcement that it has agreed to merge with its Dutch rival. The new joint group would be valued at £8.2bn.
A survey conducted by Punchy Drinks has found that 66% of millennials have felt peer pressure to drink alcohol, five times more prominent than for older generations. The survey found that men are more likely to succumb to peer, with 37% say would cave compared to 27% of women.
The MCA has reported that over half a billion pounds have been invested into UK pubs by Star Pubs and Bars, Ei Group and Greene King in the past 24 months.
Byron Hamburgers reports a loss of £47.2m for the year to 24 June 2018, compared to a £54.7m loss the year prior. The company said increases in labour costs and rates ‘added to the headwinds facing EBITDA generation across the estate’. The company also said LfL performance was impacted by ‘increasing intensity of competition, increased focus on convenient at-home dining and difficult economic conditions facing the casual dining sector.’
The Lunar Pub Company plans to open its first venue in September, located on Chelsea’s Fulham Road. The pub will be called the Hunter’s Moon and is the first of three planned launches in the next two years.
HOLIDAYS & LEISURE TRAVEL:
Ryanair reports profit down 21% to €243m for the three months to the end of June, as the average ticket price fell 6%. CEO Michael O’Leary said in Germany budget airline Air Berlin was ‘selling excess capacity at below cost prices’, while in the UK, ‘Brexit concerns weigh negatively on consumer confidence and spending’.
The BBC’s Panorama programme has been told by a former Boeing engineer that the production line of the 737 Max plane was not adequately funded. He said they were under constant pressure to keep costs down.
A man and woman arrested over a fight which broke out on a P&O Cruises ship have been released from custody but remain under investigation.
The Bicycle Association claims cycling as a whole contributes £5.4bn to the UK economy, expecting the figure to rise to £10bn if the government achieves its aim to double cycle usage by 2025. Currently, Mintel estimates the UK bicycle retail market is worth £1.5bn.
START THE DAY WITH A SONG:
Yesterday’s song was She’s Lost Control by Joy Division. Today, who sang:
“I tell myself too many times,
Why don’t you ever learn to keep your big mouth shut
That’s why it hurts so bad to hear the words
That keep on falling from your mouth”
RETAIL WITH NICK BUBB:
Games Workshop: As we’ve noted before, Games Workshop is a fantastically successful and highly profitable business, which is now capitalised at as much £1.5bn. And today’s finals build on the success in 2017/18, with the 52 weeks to June 2nd seeing PBT up from £74m to £81m. There is no current trading or outlook statement, but the CEO, Kevin Rountree, sounds confident: “An amazing set of results – the best year in Games Workshop’s history, so far. You can once again see from these results that our business and the Warhammer Hobby are in good shape. The Board and I continue to believe that the prospects for the business are good”.
Greggs: If Games Workshop is on roll, then so is mighty Greggs (market cap £2.4bn) and today’s interims (for the 26 weeks to June 23rd) are headlined “Exceptional trading performance”. LFL sales were up by 10.5% and, on the back of that, underlying PBT was up from £26m to nearly £41m and there is a chunky special dividend. But there is no further full-year profit upgrade, as CEO Roger Whiteside says “Given the strength of our year to date and the outlook, we have decided to increase investment in strategic initiatives in the second half of the year to help to deliver an even stronger customer proposition and further growth in the years ahead. Our expectations for underlying profits for the year as a whole remain unchanged.”
Sports Direct: We noted yesterday that in early trading the Sports Direct share price was already c15% down, after Friday night’s results bombshell, but if you had managed to buy then at c190p (with the company capitalised at only c£1bn) you could have made a useful profit, as the shares closed only 6.5% down at c215p. And recovery punters will have been encouraged by the 6.29pm announcement last night that the company still doesn’t think that it needs to make any provision for the huge Belgian tax demand. But the bears will, contrarily, be encouraged by the fact that the new £30m share buyback programme starts today, as the company has been a singularly poor judge of its share price on the way down in recent months…
Next: Back on May 1st, with the Q1 update, Next said that, despite better than expected 4.5% full price sales growth in Q1, the market should be braced for something like -0.5% in Q2, given the strength of the comps, after last year’s summer heatwave. A few weeks ago even that was looking like a tall order, given how much cooler the weather had been, but the recent mini-heatwave has given the City some hope that Next will be able to meet their forecast, in tomorrow’s Q2 update, if the recent firmness in the share price is any sort of guide…