Revolution Bars, Restaurant Group, G4M, Premier Foods, WFH & other:

A DAY IN THE LIFE:

I’m all in favour of being kind to animals.

Within reason, that is because, when I tried to describe a pub we we’re booking a meal in to one of the family as ‘the one where I stood in the dogs’ water bowl’, the response came back ‘which time?’

And that, on reflection, was a fair question because I’ve stepped on perhaps half a dozen dogs’ water bowls outside various pubs, shops and restaurants this calendar year and, whilst there’s usually no (or not much) harm done, the odd one can twang up in the air and spatter passers-by with an unappealing mix of water, sodden biscuits and dog dribble.

Which doesn’t do much to enhance one’s appeal but, at the root of it, I suppose, is my failure half the time to watch where I’m going. Maybe that’s a lesson I could do to learn with regard to the market. On to the news:

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PUBS & RESTAURANTS:

The consumer:

Demand has not been a problem so far during the bounce-back from Covid lockdowns. But there are a number of comments re interest rate hikes, inflation etc that suggest some consumers may find it either harder to spend going forward or more tempting to save. The Telegraph reports that ‘pensioners face £169 blow as ministers dig in over triple lock suspension.’ Age UK says some of the country’s poorer pensioners will face a choice between ‘heating and eating’. Other groups, namely borrowers, drivers, commuters, taxpayers, people who eat things and people who warm their houses could also find cash a bit tighter going forward.

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The Living Wage Foundation has raised its estimate of the ‘real living wage’ by 40p to £9.90 outside London and by 20p to £11.05 in London. Some 300,000 employees are estimated to have their pay linked to this (voluntary) measure. The Living Wage Foundation says ‘there are still millions trapped in working poverty, struggling to keep their heads above water.’ Elsewhere, the price of diesel, as we know to our cost, has passed 150p per litre for the first time ever.

Working from home:

The FT has run a survey in which it solicited the views from readers as to how they would like to see the working environment evolve (or stay the same). Perhaps unsurprisingly, readers wanted quite a lot. Whether they can have it or not remains a different question. The FT found that there was a general desire for flexibility. I mean, why wouldn’t there be? But there were some interesting points.

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Elsewhere, losses at WeWork, the global shared office provider, rose in Q3 despite the company saying there had been a gradual return to work. Revenue in the quarter was $661m. The shares rose 3%. At end September, WeWork said occupancy was 56%.

Can DTC work in hospitality?

Cutting out the retailer is disruption of a sort and arguably the delivery companies, as well as Hello Fresh and other ingredients companies are already operating in this space. The former operators generate income based on a mark-up on order price whilst the latter tend to work on subscription models.

COMPANY & OTHER NEWS:

Restaurant Group:

The Restaurant Group plc has updated on trading saying that, ‘since TRG last updated the market on 15 September 2021, The Group has traded well with like-for-like sales out-performance versus the market across our Wagamama, Pubs and Leisure businesses.’ The company says ‘we have also seen a minor improvement in UK airport passenger volumes leading to a partial recovery in the sales run rates in our Concessions business.’ RTN says ‘as a result, management’s expectations for the Group’s FY21 Adjusted EBITDA are today increased to a range of £73m-£79m (on an IAS 17 basis), subject to no unexpected Covid related disruptions being announced before the end of the financial year.’

RTN says ‘FY21 year-end Net Debt is now expected to be less than £190m (on an IAS 17 basis), with the improved position driven primarily by the robust trading performance.’ It says ‘management’s expectations for FY 2022 remain unchanged from the outlook outlined at our interim results in September.’

Revolution Bars Group:

Revolution Bars Group has reported full year numbers for the 53 weeks ended 3 July 2021 saying that it is seeing an ‘exciting return to normal trade following investment in all brands.’ The year, financially, is a write-off but the group points to positive trends. The company says that revenue for the full period was £39.4m against £110.6m last year and the company made an EBITDA loss of £3.9m vs an EBITDA profit of £9.8m in the prior year. The loss before tax was £26.3m this year against a loss last year of £31.7m. The loss per share was 21.2p against a loss last year of 70.3p.

RBG says ‘the Group has again faced an extraordinary year where every week of trade was impacted heavily by restrictions or enforced closure.’ It says it ‘used this period to further invest and improve its brands and operations, and the Group is now picking up where it left off prior to COVID-19. Continuing from the positive like-for-like growth before the pandemic, the Group is extremely excited to have fully reopened and see our guests and teams create the fun and memorable experiences for which our brands are renowned.’

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Domino’s Pizza Group:

Domino’s Pizza Group has announced the appointment of David Surdeau as Interim Chief Financial Officer with effect from 17 November 2021. It says ‘David has extensive corporate finance and commercial experience, and was previously interim CFO of Marks & Spencer plc.  Prior to that, David held senior finance roles within Tesco plc and BAT Industries plc’ and adds that ‘David will take over as CFO from Neil Smith, who leaves the Company on 26 November 2021. As an interim appointment, David will not be joining the Board.’ CEO Dominic Paul says ‘David has a demonstrable track record of success in growth businesses and his experience and skill set will be invaluable as we continue to execute our strategic plan. I look forward to welcoming him to the Group.’

Diageo:

Diageo today hosts a Capital Markets Day and it has updated on its ‘drivers of competitive advantage for sustainable long-term growth and provides medium-term guidance ahead of historical growth rates.’ It says that its ‘new medium-term guidance: expecting organic net sales growth in a range of 5% to 7% and organic operating profit growth in a range of 6% to 9% for fiscal 23 to fiscal 25.’

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Coca-Cola is to bring back its Hero the Driver campaign this Christmas period. It will be in operation in up to 9,500 venues across the country. Licensees will shortly be able to request a free Coca-Cola Hero the Driver activation kit and the initiative will be supported by a PR and social media campaign that will go live from 1 December.

Heineken is to buy South African wine and spirits maker Distell Group Holdings for around €2.2. Heineken CEO Dolf van den Brink says ‘Distell is a highly regarded, resilient business with leading brands, a talented workforce and a strong track record of innovation and growth in Africa.’

Premier Foods, which has benefited during lockdown as consumers have eaten at home, has reported H1 numbers saying ‘we have delivered a very good first half performance, with revenue growth ahead of expectations; quarter two was particularly strong, with revenue growth of +8.5% vs two years ago.’ The company, which has engaged on a period of self-help re debt and other issues, is to some extent the flip side of the coin when it comes to hospitality businesses.

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Restaurant Brands International in the US is to buy Firehouse Subs for $1 billion in an all-cash transaction.

Amazon is reported set to open 260 cashless grocery stores across the UK before the end of 2024 reports City AM. Amazon says ‘in 2023 and 2024, we are planning 100 store launches per year, in line with more aggressive opening programmes achieved by convenience stores in the UK in the last five years, Tesco’s, Sainsbury’s and Co-op have all exceeded 100 openings per year.’

Consultancy firm Bain has predicted that the luxury goods sector, which lost 23% of its sales in 2020, should grow to €283 billion this year, up 4% on 2019 levels and back to record numbers. Demand in China, which accounts for a third of European luxury goods company sales in 2019 is reported strong.

The Securities Daily in Beijing have attacked Singles Day’s ‘worship of turnover’ in what has been seen as a new strike against China’s tech giants. It said this behaviour was “inextricably linked to chaos.” Alibaba has said spend over the 11-day event rose by 8.5pc, the slowest rate in its 13 years.

LEISURE TRAVEL & HOTELS:

The WTTC has said that as many as 180,000 jobs could be lost across the UK travel and tourism if travel restrictions return this winter. The WTTC says that international visitor spend in the UK could be down by almost 50% on pre-pandemic levels.

Goldman Sachs Asset Management and Cedar Capital Partners have acquired the Belfry Hotel & Resort.

The BBC reports that it has been told the eastern leg of HS2, the line between the Midlands and Leeds, will be officially cancelled on Thursday.

Destination Analyst in the US reports that ‘the Thanksgiving holiday looks to be a busy one—likely even exceeding 2019 travel levels.’ It says, however, that ‘a majority of Americans do feel that the U.S. will face another significant wave of COVID-19 in the next three months.’

The Trump Organization is reported to have sold its International Hotel in Washington D.C. for $375 million.

OTHER LEISURE:

Gear4Music says Q2 slower than Q1. The company has reported interim results for the six months ended 30 September 2021 saying that revenue was £64.7m against a lockdown-boosted £70.2m last year with EBITDA of £2.4m (2020: £6.4m) and a net profit of £1.1m against £4.9m last year. The company says that ‘FY22 H1 Revenues and Profits [are] in-line with Board expectations’ and adds that the ‘gross margins remain strong reflecting continued focus on higher margin products.’ CEO Andrew Wass says ‘I am pleased to report that following the exceptional period of trading during FY21, Group financial performance during FY22 H1 was in-line with the Board’s expectations, retaining strong margins and achieving significantly improved profitability compared with the more comparable FY20 H1 trading period.’

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Manchester United is reported to be close to announcing a new fan share scheme, reports Sky. It reports that the fan-shares ‘would be structured as a new class of equity carrying the same voting rights as the B-share class owned by members of the Glazer family.’

FINANCE & MARKETS:

Andrew Bailey has told MPs that the decision not to raise interest rates was a close one. He says he is “very uneasy” about the rising cost of living but the MPC was not uneasy enough to yet do anything about it. The vote was 7-2 to keep rates on hold but Bailey’s comments give a hint as to the direction of travel.

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Roger Bootle has said that the rate of inflation in the UK is unlikely to match that in the US.

Japan’s economy contracted by 0.8% in Q3.

Sterling mixed at $1.3418 and €1.1791. Oil price higher at $82.86. UK 10yr gilt yield up 5bps at 0.96%. World markets mixed yesterday and London set to open around flat as at 6.45am.

RETAIL WITH NICK BUBB:

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