M&B (Q3), FSTA (Q1), FUL (full year), DPEU, trading, margins, costs etc.:

A DAY IN THE LIFE:

Well the puppy is keeping us busy.

I reckon she’s worth about 35,000 steps, one ‘scenic visit’ and two pub meals a week and anything that gets you out of the house and the blood pumping must be a good thing.

Right? Or maybe not if you have to plunge into the odd stream to rescue her or if she trips people up or if she does her business in inappropriate places, etc.

Etc, etc but we’re a bit pushed for time today so let’s move on to the news:

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MITCHELLS & BUTLERS’ Q3 UPDATE:

M&B has this morning updated on Q3 trading and our comments are set out below:

Trading:

• M&B reports that sales comps are vs the same period in FY 2019, the last full financial year before Covid-19. It adds ‘like-for-like sales started the third quarter strongly, up 2.2% for the first five weeks as previously reported, before falling back slightly across a period including the Jubilee weekend, industrial action and the recent very hot weather, to end up 0.9% across the full quarter, with food continuing to be the main driver.’

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FULLER’S – AGM & Q1 TRADING UPDATE:

The numbers:

• Fuller’s has updated on trading, saying that ‘our sales recovery is continuing, especially in the City and West End of London.’ It says ‘in the first 16 weeks of the new financial year, total sales are up 3% on pre-pandemic levels and up 81% on the same period last year. On a like-for-like basis, sales for the 16 weeks to 16 July 2022 are up 27% on last year.’

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FULHAM SHORE – FULL YEAR NUMBERS:

The Fulham Shore has today reported full year numbers to end-March and our comments are set out below:

Headline numbers:

• FUL has announced that revenue increased 105% to £82.7m (2021: £40.3m) and it says that sales were ‘gathering momentum towards the end of the year.’ EBITDA was £19.5m (2021: £8.7m) and Adjusted EBITDA was £11.4m excluding IFRS 16 (2021: £1.6m).

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PUBS & RESTAURANTS:

Business Rates:

UKH is calling for reductions in business rates to be calculated and passed on as rapidly as possible. The new valuations are due to come into force next April. The value of retail and hospitality premises is likely to have fallen relative to some other property values, implying a reduction in rates…

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The consumer:

Money Saving Expert’s Martin Lewis has said that whoever the next PM is, they may inherit “national financial cataclysm” that could be hard to avoid. Mr Lewis has been increasingly outspoken about the likely impact of further energy price rises (another 60% plus in October) and rising fuel and food prices.

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Consumers & cutting back: Premier Foods comment today on cooking in home vs hospitality. Affordability is more important ‘rather than getting a take-away or eating out’. Next 6mths? Says ‘well over half of consumers are planning to save money by cutting back on take-aways & eating out.’

See also comments below on consumers’ desire to go on holiday.

Demographics:

Whilst younger consumers have been quicker to return to hospitality, they are not necessarily amongst the best off demographics in terms of spending power. Much here seems to favour an older demographic.

The Telegraph comments on equity release schemes…

Data from Retail Economics and Grant Thornton suggests that Gen Z is seeing its disposable income fall by £25bn…

Trading:

The BBPA says ‘inflation is hitting a record high, customers are making choices about where they spend their money and we’re facing severe labour shortages, and as a result we’re in a situation where we need to be trading above average just to make a profit…’

Labour:

Totaljobs has reported that as many as 4.5m Brits, around 3.4m of them currently employed in the UK, are considering moving overseas for a better quality of life…

Other news:

Business secretary Kwasi Kwarteng has said that the scheme offering government-backed loans to small businesses will be extended by a further two years. Mr Kwarteng says ‘small businesses are the lifeblood of the British economy…’

Allied Market Research reports that the malt whisky market could be valued at US$4.3bn in 2021, with a 4.7% compound annual growth rate for the next 10 years.

SIBA has responded to the Government’s announcement that there will be delays to the next stages of the Alcohol Duty System, saying that ‘independent brewers have been waiting on tenterhooks for the next stages of the alcohol duty changes and are deeply disappointed that we’ll now have to wait until the Autumn to know what the final reforms will look like…’

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COMPANY NEWS:

Britvic has updated on Q3 trading, saying that revenues were £431.1m (up 11.2%). It says it has turned in a ‘robust Q3 performance’ and adds that it is in ‘double-digit Q3 revenue growth vs the comparable period in 2019…’

DPEU has announced that it is recommending Mr. Ahmet Fadil  Ashaboğlu to the Board as Independent Non-Executive Director.

Flight Club has announced that it is to open in Cardiff on 7 October. The site will be Flight Club’s first venue in Wales and its tenth in the UK.

Amazon is reported to have been handed a tax credit of just over £1m last year by HM Revenue and Customs despite the online retailer making around £204m in profit, up 60% on the prior year.

HOLIDAYS & LEISURE TRAVEL:

A survey conducted by travel insurance specialist Just Travel Cover has found that consumers will make efforts to find the money for a foreign holiday this year, despite the cost of living crisis…

Heathrow’s restrictions on flight numbers may continue until after the October half-term holiday says the Telegraph. That is, until demand has seasonally fallen.

Trains were cancelled and other services were disrupted yesterday in the wake of the hot weather of Monday and Tuesday.

The threatened strike by refuelling staff at Heathrow has been postponed.

OTHER LEISURE:

Tesla is reported to have sold off most of its holding in Bitcoin several months ago. The car maker said it had disposed of 75% of its Bitcoin, which was worth about $2bn, at the end of last year.

FINANCE & MARKETS:

Commenting on yesterday’s inflation numbers, the BCC said there is ‘a huge amount of cost pressure that businesses and households across the UK’ and it adds ‘these costs are set to rise further with surges in energy bills coming down the track…’

The Public Accounts Committee has accused the Department of Health and Social Care of “significant failings” in its handling of PPE contract awards. There are reportedly 176 contracts in dispute, worth a total of £2.7bn. In addition, some £17bn of Covid loans (37% of all those made) may be irrecoverable due to fraud or incompetence and Track & Trace cost perhaps some £37bn.

Figures show that private sector wages are currently rising at around 5x the rate of those in the public sector. As public sector workers are often unionised and they stand perhaps less chance of losing their jobs if they go on strike, this could fuel industrial action further down the line.

Sterling weaker at $1.1993 and €1.1735. Oil price lower at $106.13. UK10yr gilt yield down 7bps at 2.13%. World markets mixed yesterday. London set to open up around 3pts as at 6.30am.

FORTHCOMING NEWS:

Deliveroo and Tortilla update on trading on Monday and Loungers hosts investor presentations on Tuesday. Fuller’s hosts its AGM (and will update on trading) on Wednesday and Premier Foods also updates on Q1 on Wednesday and Fulham Shore reports full year numbers on Thursday. DPEU will update on H1 trading, also on Thursday.

Big week for economic releases. We have Unemployment and Average Earnings numbers on Tuesday then Inflation numbers on Wednesday. Thursday sees the ONS admit to how much the government is Borrowing on behalf of taxpayers and on Friday we have a triple whammy of Retail Sales numbers, the GfK Consumer Confidence Index and Flash PMIs for July.

RETAIL WITH NICK BUBB:

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