Domino’s Pizza, IHG, Marriott, Fever Tree, beer sales etc.:
Domino’s Pizza, IHG, Marriott, Fever Tree, beer sales etc.:A DAY IN THE LIFE: Adjectival endings, genders, cases and all the rest. I mean I know that they exist but, really, I’m not sure that I care too much and, even when it comes to prepositions, provided that I can make myself understood, I’m happy. But the same cannot always be said for the people to whom you’re speaking because, if you use the accusative with a preposition when you should have used the dative (because there was no physical movement implied, of course) you are likely to see your waiter, flight attendant or car hire chappie wince, grimace and cross their legs and then if you continue to happily mangle their language they are likely to either correct your grammar word by word or attempt to hold their criticism in and explode in a shower of sparks. We are currently in Magdeburg, major town in the former East Germany. Brumby, some 25km south, was a nice village. Berlin later today. On to the news: PUBS & RESTAURANTS: • Domino’s Pizza Group has reported H1 numbers to 1 July saying that system sales rose 12.8% to £616.6m with LfL sales +5.9%. Underlying PBT is up 2.5% at £45.7m with underlying EPS of 7.8p vs 7.3p last year. • Domino’s reports UK system sales were up 8.3% with 22 new stores opened and 5.9% like-for-like growth • Domino’s reports net debt of £182.1m. • Domino’s CEO David Wild says ‘it’s been another good trading period for Domino’s. In the UK, despite continued consumer uncertainty, we’ve achieved further like-for-like growth by maintaining our clear focus on product, service and value for customers. Our ongoing investments in supply chain infrastructure and our IT platform will support future growth and customer engagement. Domino’s is proud to be one of the most successful franchise businesses in the UK, and we will continue to work with our franchisee partners to promote the brand and the strength of the system.’ • Domino’s CEO says ‘whilst our international businesses continue to make good progress with customers and sales, it has taken us some time to refine the operating model and cost base at store level, particularly in Norway. We are confident that the changes we have made will result in a better performance in H2, and believe that these businesses offer significant long term growth potential as we export our expertise in digital, supply chain and franchisee management.’ • Domino’s concludes ‘the Board expects that full year Underlying Profit Before Tax will be in line with current market expectations. Our confidence in the future is underlined by continued growth in the dividend, and our ongoing investment in our own shares through the buyback programme.’ • Fever Tree founders set to sell 2m shares in trade that will net deputy chairman Charles Rolls and CEO Tim Warrillow £73m between them. • The Campaign for Real Ale (Camra) reports there were 18 pubs closing each week in H1 2018, with 476 closures in total, up 13 yoy. Camra claims tax rises have added pressure on the industry as well as young people consuming less alcohol and more people choosing to drink at home. • The Agriculture and Horticulture Development Board (AHD) warns of potential crop shortages due to the ongoing heatwave, with potatoes becoming the latest concern. The AHD said potatoes could cost more per kilo from autumn after already warning on lettuce, broccoli, peas and carrots. • The British Retail Consortium KPMG sales monitor shows LfL retail sales up 0.5% yoy in July, with fans and cooling equipment as popular purchases, but furniture, computing and footwear all registering declines. Food sales had their best July in five years. • Wear Inns, which has recently been purchased by investment company Aprirose, has reported numbers to end-March 2018 to Companies’ House. Wear reports revenues down to £13.6m from £14.2m with losses before tax up from £45k to £82k. • Flat Iron Steak has reported numbers for the year to 27 August 2017 to Companies’ House showing revenues up from £7.6m to £11.7m and EBITDA up from £859k to £1,352k. PBY was up from £233k to £456k. • Gaucho Grill has formally reported to Companies’ House that Deloitte has been appointed as administrator to the group. • Some 70% of respondents to a recent survey would be willing to pay more for British manufactured goods, although 78% perceive British made products to be more expensive than overseas versions. The survey, undertaken by British warewashing brand Classeq, also found that 40% of respondents said buying British is more important now than it was three years ago, following the Brexit result. • PepsiCo’s chief executive, Indra Nooyi, has announced she will step down after 12 years of leading the drinks giant during which its shares rose 78%. • Bar operator Arc Inspirations is investing £1.4m into the opening of a new two storey The Box site in Leeds, taking the group’s portfolio to 18 bars. Arc Inspirations CEO, Martin Wolstencroft, said: ‘We’re a forward thinking business that is tuned into the latest trends and consumer demands. We’re not wedded to a concept and have put considerable time, effort and investment in creating an experiential space that offers a little something for everyone. We’ve really focused on doing things a bit differently, with the aim of creating memorable experiences and moments that will drive footfall and loyalty throughout the year.’ • Small brewers in Canada are struggling to source enough aluminium for cans as a result of the increase in trade tariffs with the US. • British beer sales have boomed in recent years, with a growing demand from drinkers across the world — a trend that minister Graham stuart has paid tribute to in light of International Beer Day. British beer exports totalled £526m in 2017, with 570 million litres of beer or 1.1 billion pints shipped to other countries, with the USA, Ireland, France, China and Canada being the most popular markets. • A CAMRA survey found 56% of respondents feel the price of a pint of beer in the UK has become ‘unaffordable’. London remains the most expensive place to buy a drink with an average of £5.20, followed by Oxford (£4.57), Edinburgh and Bristol (£4.35), and Brighton (£4.24), with the cheapest being Carlisle at £2.35. • Tesco has agreed a buying alliance with French rival Carrefour in order to gain better terms with suppliers, potentially leaving a greater amount of money in customer’s pockets. • Sky news has reported that the company controlled by Philip Day, the tycoon behind Edinburgh Woollen Mill Group, is attempting to purchase womenswear label Jacques Vert from the beleaguered department store chain, House of Fraser. • Benito’s Hat has raised £1m from existing investors to fund a three-year growth plan. • A study commissioned by More Than Carrots and conducted by Censuswide has found that 7 in 10 UK consumers will avoid restaurants that don’t serve vegetarian options as 28% of Brits identify as ‘meat reducers’. HOLIDAYS & LEISURE TRAVEL • Intercontinental Hotels reports H1 numbers saying it has seen a ‘strong H1 performance across all regions and good progress against new strategic initiatives’ • IHG reports revenue up 7% at $900m. CEO Keith Barr comments ‘we’ve had a strong first half, delivering our best signings performance for a decade. RevPAR grew at 3.7%, which together with 4.1% net system size growth, drove underlying operating profit up 8% and underlying EPS up 25%. This underpins our decision to raise the interim dividend by 10%.’ • IHG reports ‘each of our regions continue to deliver strong momentum. This is led by Greater China, where double digit growth in both RevPAR and net system size, as well as record signings, reflects the ongoing benefits of our long term strategic focus on this important market. Demand for our unique Chinese owner proposition “Franchise Plus” continues to be excellent and we now have more than 100 Holiday Inn Express hotels for this model either in the pipeline or open.’ • IHG concludes ‘the fundamentals for our industry are strong, we are confident in the outlook for the balance of the year and in our ability to deliver industry-leading net rooms growth over the medium term.’ • Travelex reports a currency exchange drop to $1.26/£, its lowest level in 11 months, meaning travelling overseas will become more expensive for tourists. This follows Liam Fox claiming the chance of failing to come to a Brexit agreement with the EU was ‘60-40’. • Marriott International has reported Q2 numbers saying diluted EPS rose to 171c, up 34% on last year. CEO Arne Sorenson said ‘we were pleased with our performance in the quarter across the board. Worldwide constant dollar RevPAR grew nearly 4 percent in the second quarter, with particularly strong transient demand in many markets outside North America. In North America, solid group business allowed us to drive higher room rates in the quarter.’ • Mr Sorenson said ‘since we acquired Starwood, we have recycled capital totaling nearly $1.8 billion, exceeding our goal of recycling $1.5 billion by year-end 2018. For full year 2018, we expect to return more than $3.1 billion to shareholders through share repurchases and dividends. To date this year, we have already returned $2.2 billion to shareholders.’ • Airbnb for Work reports the number of companies booking through the platform nearly doubled to 700,000 in the last year, with the number of business trips booked tripling. In the UK alone, Airbnb says more than 43,000 companies have had employees sign up and book through Airbnb for Work. • A major forest fire on the Portuguese Algarve has led to scores of evacuations as 700 firefighters tackle the blaze. The Foreign and Commonwealth Office said ‘The fire has now reached the town of Monchique, and Portuguese authorities are evacuating affected areas of the town and surrounding areas’. • A new reports suggests Brexit could put up to 25,000 jobs at risk in the outbound travel sector as companies would have to pay into overseas state social insurance schemes. Such changes could lead to companies facing a 58% increase in costs, the closure of smaller businesses and companies employing less staff from Britain, according to the study. • P&O Ferries reports 161,468 car carryings across the Channel in July, up 4.5% yoy to the highest level in three years. CEO Janette Bell said ‘More people started their summer holiday by taking a P&O ferry across the English Channel in July, with our outstanding on-board offer and the glorious summer weather proving an irresistible combination.’ OTHER LEISURE: • The Climbing Hangar, an indoor climbing business, received a £3m investment to roll out in the UK from NVM Private Equity. TCH currently has one site in Liverpool and two sites in London. FINANCE & ECONOMICS: • ICAEW reports ‘business confidence has fallen into negative territory suggesting weak economic data, Brexit divisions and global trade disputes have taken their toll on UK companies.’ The latest ICAEW Business Confidence Monitor shows a fall to minus-0.2 this quarter, following three successive increases. It says this is ‘highlighting the fragility and lack of certainty for businesses in many sectors and regions across the UK.’ • Sterling at 1yr lows on no-deal concerns trading at $1.2943 and €1.1197. • Oil at $73.99 • UK 10yr gilt yield down to 1.30% • World markets: Europe mixed yesterday, other markets up. • Brexit etc.: o Sterling at one-year lows. o Mrs May & Nicola Sturgeon to meet today to discuss implications of a potential no-deal Brexit. Mrs May says ‘by making the most of our country’s assets and the talents of all of our people, we can build a brighter future for the whole UK.’ START THE DAY WITH A SONG: Yesterday’s song was Animal by Miike Snow. Today, who sang: As soon as I wake up, Every night, every day I know that it’s you I need To take the blues away RETAIL NEWS WITH NICK BUBB: Pendragon: The Evans Halshaw and Stratstone car dealer Pendragon, which boasts of being “The leading automotive online retailer in the UK”, has announced notably weak interim results today (for the 6 months to end June), although the excessively long and self-congratulatory statement claims that the 40% fall in H1 PBT to £27m was “as expected”. Trevor Finn, the veteran CEO, also says that “we remain in line with expectations” and the outlook is that “We anticipate our performance in 2018 to be in line with expectations with an improved performance in the second half driven by an improving trend in used cars and new cars and further operating cost savings”.
BRC-KPMG Retail Sales for July (the 4 weeks to July 28th): We flagged yesterday that, on the back of the hot weather, good Food and bad Non-Food sales were likely to have played a score draw in terms of overall LFL sales last month, but, helped by the World Cup, the boom in picnic/barbecue/booze sales pushed the LFL outcome over the line, with 0.5% growth (after a surprisingly good +2.8% LFL in May and +1.1% LFL in June). The survey headline was “Food and Fans for July, but Furniture Forgotten”. Paul Martin, UK Head of Retail at KPMG, said “For all the hopes placed on the World Cup and the glorious weather, it seems retail sales still fell short of expectations”. The exact Food/Non-Food split is, as usual, buried in the 3-month moving average, but the Food Retailers clearly saw the best of it last month and their overall LFL growth looks to have been at least 4%, implying that News Flow This Week: Tomorrow brings a ScS trading update (along with the Footasylum and Majestic Wine AGM’s) and the Card Factory pre-close update is on Thursday. |
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