DP Eurasia, XP Factory, calls for more aid, trading, holidays etc.:

A DAY IN THE LIFE:

Bit pushed for time this morning.

This largely because a standard check-up at the dentist, you remember those, they used to come every six months, had been arranged for yesterday late afternoon and it pushed the whole day out of shape.

And, as dental check-ups are like hen’s teeth – that is not pleasant but rare – we had to stick to the appointment dictated as the last time we had our gnashers checked was late 2019.

Anyway, all good, blasted by X-rays and poked around a bit but no work to be done. Pain and discomfort avoided for the short term, the trains down were ghostly quiet and we’ve got our day broadly back on track. On to the news:

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PUBS & RESTAURANTS:

Trading, state aid etc.:

The BBPA has called on the government to provide further support for its pubs and brewers ‘following another devastating winter.’ It says the ‘end of Plan B boost to consumer confidence must be matched with Government support.’ The BBPA quotes data from CGA saying that trading was down 30% on average across England during the second half of December. It is therefore ‘urging further Government support to combat the increasing financial pressures to ensure our pubs remain open for consumers, having recently relaunched its Long Live The Local campaign.’

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Meanwhile SIBA has welcomed some of the moves north of the border. It reports that the Scottish Government has announced new funding to help small brewers impacted by the restrictions introduced to control the omicron variant.

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More on Trading.

S4Labour has reported that last week’s hospitality sales remained soft. It says they were down 8% on 2020 levels but add ‘with the ending of Plan B restrictions potentially in sight, sales were up 4.5% on the previous week  — albeit from a low-base mark.’

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Employment & the consumer.

Employment levels, which can be a lead-indicator for consumer confidence, remain buoyant. Nonetheless, yesterday we saw announcements from The Royal Mail and Unilever that they were cutting 700 management jobs and 1,500 positions respectively.

The International Monetary Fund has urged the UK to provide “targeted support” for those households facing a cost of living crisis, partly caused by rising energy prices. Deputy MD Gita Gopinath says it is ‘important that there should be well targeted support to highly vulnerable households who are having to face very high living cost increases.’ She adds that the crisis in Ukraine could mean “further increase in prices of oil and natural gas, and therefore of energy costs more broadly, for many countries in the world”.

Working from Home.

There appears to be a widespread desire to (at least attempt) to get back to normal. This will involve many more office workers returning to their desks than has hitherto been the case. Getting back to 100% may not be possible in the short term. Some employers are calling staff back, whilst others are going ‘remote first’ (i.e. there is an understanding that staff will be more likely than not to work form home).

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Clear Sight comments on consumer confidence saying that the mood has brightened since the beginning of the year. The data was collected before it had been announced that Plan B was being dropped. Clear Sight says ‘compared with our previous wave of research in early December, a smaller proportion of the population rated their mood at the lower end of the spectrum.’ Vaccinations have helped.

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The BBC reports that ‘food and drink firms have raised fears over shortages as a deal that secured vital carbon dioxide supplies is about to end without an extension.’ CO2 is used for keeping packaged food fresh and is used in fizzy drinks. A supply chain crisis was averted last year when the government stepped in to broker a three-month price-fixing deal between CO2 producers and industry. A new deal will have to be struck before the end of this month.

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City Pub Group chairman Clive Watson warns that the price of a pint could rise by as much as 50p, with inflation running at about 10% in pubs. One supplier reportedly told Mr Watson at the start of the year that beer prices were going to go by 7%.

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COMPANY & OTHER NEWS:

DP Eurasia has updated on trading for the year to 31 December 2021 saying its ‘strong sales performance’ has been sustained. The group reports group revenues for the year up 40.6% on last year with Turkey up 50.4% and Russia up 9.6%. The group says ‘system sales increased 51.5%, on the back of sustained strong demand in Turkey and improving performance in Russia.’ Turkish systems sales were up by 59.4% with Russian system sales up 33.5%. The co says it opened a net 38 new stores in 2021. Omicron impact in January and some cost headwinds. See below.

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Belgium-based delivery company Deliverect has raised $150m to value the company at $1.4bn. The company says it will use the funds to hire more people, and to build out more functionality on its platform, including an app store to make it easier to integrate more companies as and when th. The co says ‘we are preparing to scale to meet all of the digital opportunities in the food hospitality industry.’

The Cinnamon Club, which is owned by Boparan Restuarants, has extensively renovated its bar area ‘with a new scheme conceptualised by London-based interior designer, Juliet Walmsley.

Corbin & King has been pushed into administration. Minor International is its largest shareholder and has pushed for the appointed of FRP as an administrator amid growing concerns. Minor says ‘contrary to the picture that Mr King [Jeremy King, CEO] is trying to paint, the business is insolvent and is in strong need of further financial support.’

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Carluccio’s is to sell product through 300 Sainsbury’s stores nationwide from today.

McDonald’s Corp is to sell its plant-based McPlant burger from around 600 restaurants in the San Francisco Bay Area and Dallas Fort Worth on a test basis from 14 Feb.

XP Factory (used to be Escape Hunt) updates on trading for the six months to 31 December 2021 saying that it generated £5.1m of revenue from owner-operated Escape Hunt sites in H2 (13% ahead of H2 2019) with ‘Escape Hunt site level EBITDA expected to exceed £2m in H2 (340% ahead of H2 2019).’

The company says a ‘positive Group EBITDA (excluding R&D credits) [is] expected to be delivered in H2 with underlying Group EBITDA expected to be ahead of City expectations.’ The co says it received a £1.5m R&D grant in January 2022. The group completed the acquisition of Boom Battle Bar on 23 November 2021 and says it has a ‘number of new openings on track for both Escape Hunt and Boom Battle Bar.’

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Coca Cola HBC has announced that it has completed the previously-announced purchase of a further 42% of the shares in Coca Cola Bottling Co of Egypt. It says the purchase was for a ‘cash consideration of approximately US$123 million, bringing CCH Holdings’ total ownership in CCBCE to 94.7%.’

Molson Coors Beverage Company (in the US) has announced that it has ‘expanded its exclusive agreement with The Coca-Cola Company to develop and commercialize a brand of full-flavour alcohol beverages.’ It says this ‘marks another milestone in the relationship between Molson Coors and The Coca-Cola Company, following a successful first year for Topo Chico Hard Seltzer.’

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Remy Cointreau beat Q3 sales forecasts with group sales up 21% to €440.5m for the three months ending 31 December. The company is confident that demand for its premium cognac in China, the United States and Europe will underpin profit growth this year.

The latest CGA On Premise Measurement Service shows that the drinks expected to be the most popular in 2022 are run, tequila and vodka. On the other hand, wine, gin and whisky are among those suspected to take a dip in popularity.

Sky News reports that US-based Knighthead Capital Management is in talks with Corbin & King about providing tens of millions of pounds of funding amid a dispute with Minor Hotels, the hospitality group’s biggest shareholder.

Wells & Co has announced a 10% rent concession for all its 130 leased and tenanted pubs across the UK. The announcement comes after a disappointing trading period in December 2021 due to the Plan B restrictions.

Britvic has pledged its support to homelessness charity Only A Pavement Away as it prepares to open training cafés on high streets across the UK. 

London-based bar operator Inception Group is set to open a Mr Fogg’s site in Mayfair at the former Balls Brothers site.

LEISURE TRAVEL & HOTELS:

Jet2 has said holiday bookings had increased by 30% on last week after the announcements on Monday that rules would be relaxed for people arriving in Britain. The rule changes mean fully-vaccinated people arriving in those countries from abroad do not need to take Covid tests.

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Travelodge has launched its 2022 recruitment drive, looking to fill 600 positions including roles such as Hotel Manager, Assistant Hotel Manager, Bar Café Team Member, Housekeeping Team Member and Receptionist.

The billionaire Livingstone brothers are reported to have teamed up with a Dutch pension fund manager to invest €1 billion in buying hotels from financially distressed sellers.

OTHER LEISURE:

Sky reports that Playtech is ‘drawing up contingency plans to dismantle and sell its operations if a £2.7bn takeover by an Australian rival is blocked by a collection of Asian-based shareholders.’ It says it believes ‘Playtech’s directors and its investment banking advisers are discussing a full break-up of the London-listed gaming software company, which has a market value of just under £1.9bn.’ The company says ‘whilst Playtech has made significant strategic and operational progress and is in a strong position for the future, Aristocrat’s proposal provides an attractive opportunity for shareholders to accelerate the delivery of Playtech’s longer-term value.’

The company has this morning commented saying it ‘notes recent media speculation on the Company’s future strategy.  The Board of Directors reiterates its recommendation that shareholders vote in favour of the offer from Aristocrat Leisure Limited. Whilst Playtech has made significant strategic and operational progress and is in a strong position for the future, Aristocrat’s proposal provides an attractive opportunity for shareholders to accelerate the delivery of Playtech’s longer-term value.’

Market research group NPD reports that toy sales dropped by 3% in the UK last year, as the supply of materials and transportation of finished toys, particularly on shipping containers, provided obstacles for the industry.

The Avengers Campus in Disneyland Paris is set to open this summer, with Disneyland Paris president, Natacha Rafalski, calling it a ‘significant milestone’ in the park’s ongoing expansion.

Guitarguitar is moving to an employee ownership corporate structure, with 60% of shares being placed into an employee ownership trust (EOT).

Bob Dylan has become the latest recording star to sell his record collection to a music major. Mr Dylan is reported to have sold his catalogue to Sony in a deal worth up to $200m.

Sterling stronger at $1.3508 and €1.1949. Oil price higher at $88.21. UK 10yr gilt yield up 3bps at 1.16%. World markets mixed yesterday but London set to open some 58pts higher as at 7am.

FINANCE & MARKETS:

The ONS yesterday reported that government net borrowing in December was a little below estimates but it confirmed that interest charges had hit new record highs. The government borrowed £16.8bn last month. Economists had forecast a figure of £18.5bn.

Some have suggested that the shortfall could provide the flexibility needed to perform a U-turn on proposed National Insurance rises. Taxes rose and government spending fell as support to industry was withdrawn. Borrowing cumulatively this financial year is running below forecasts. Interest charges tripled on December last year to hit £8.1bn on the month or a horrendous £100bn annualised.

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The IMF has cut its forecast for growth for the UK economy in 2021 from 5.0% to 4.7%. The IMF has also cut estimates for the US and China. For global growth in total, the IMF has cut its forecasts from 4.9% to 4.4%.

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RETAIL WITH NICK BUBB:

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