Langton Capital – 2022-09-05 – Energy costs, inflation, labour issues, current trading, company news etc.:
Energy costs, inflation, labour issues, current trading, company news etc.:A DAY IN THE LIFE: Well, it’s September, the start of meteorological autumn and, looking out at the gloom, the barely visible wet grass, the vaguely alcohol-scented, wasp-laden plums dropping from the trees and the hanging mist, we can believe it. Furthermore, after little or no rain for months, the forecast north of the border, the Humber-Mersey border, that is, is for rain on 12 of the next 14 days and, whilst the grass may be weeping with gratitude, we, strangely, are not. Anyway, it’s back down to London shortly and schools start tomorrow. No excuses, the holidays are over. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories are in the Premium Email. Reply to this email if you would like to upgrade. Prices for the Premium at time of writing are £345 for one subscription, £595 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option HERE PUBS & RESTAURANTS: The elephants in the room are unchanged. Inflation, particularly energy costs, labour shortages and the wobbly consumer. Energy costs: Lots of coverage in the mainstream press. Re our industry, the impact on the UK’s pubs has been highlighted. Many will shortly be paying more for their energy than they pay in rent. This will likely force many units into losses. The government, when it begins to function again, may do something about this, but that cannot be guaranteed… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. CAMRA has said that UK pubs may have to raise the price of a pint to £20 in order to cover their costs after recent (and likely future) energy price hikes. This is a) obviously headline grabbing but also b) it is a non-story as it is not going to happen… The energy crisis has led to the Night-Time Economy Advisor for Manchester, Sacha Lord, requesting an urgent meeting with Chancellor Nadhim Zahawi, currently (as at 6.30am), Chancellor of the Exchequer… The German government has announced a €65bn support package to help both consumers and businesses cope with the higher cost of energy. PM contender Liz Truss has said that the UK government could follow suit… Inflation: Carbon dioxide prices are reported to have more than trebled in recent weeks. This will put upward pressure on the price of some foods and also on drinks, such as some beers, which use the gas in their production processes… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. The Daily Mail looks at a number of hospitality products and concludes that inflation is here, there and everywhere… Current trading: CGA reports that the latest Nielsen IQ Drinks Recovery Tracker shows that On Premise drinks sales last week were virtually level with summer 2021 and well behind 2019. For the week ending 27 August, trading was down by 13% on the same week in 2019—though this figure is skewed by the August bank holiday weekend falling in that period. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Cost of living issues. The Department for Transport has said that bus journeys will be capped at £2 between January and March next year, in an attempt to help passengers with the rising cost of living. The average fare for a three-mile journey is around £2.80, the DfT said. Other news: CGA reports that ‘contract catering year-on-year sales [were] down on 2019 levels in Q2 as cost pressures mount.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. COMPANY NEWS: Fulham Shore. David Page, chairman of The Fulham Shore, released an AGM statement saying that current trading has been ‘resilient and running in line with management expectations’…. Pernod Ricard reports 17% sales growth in 2022, totalling €10,701m, its fastest growth in 30 years… Fuller, Smith & Turner has agreed to buy the De La Haye’s Cafe Tea Room in the centre of Bourton-on-the-Water, in the Cotswolds. The purchase price has not been disclosed, but the property was on the market at nearly £3m. UK wine maker Chapel Down last week announced that Robert Smith had been appointed as Chief Financial Officer of the Company effective from 1 Sept. Patisserie Valerie, which collapsed after the discovery that its accounts had been fabricated, is closing nine sites… Albert’s Schloss will open its third UK site in November, located in Liverpool. The brand-new 1,000-square-foot venue is brought to the city by hospitality group Mission Mars. HOLIDAYS & LEISURE TRAVEL: PPHE Hotel Group reports total revenue up 339.4% YoY to £113.2m, representing 73% of the pre-pandemic levels reported in H1 2019. Q2 2022 saw trading at 87.5% of Q2 2019 levels compared with 51% of these levels in Q1 2022. The annual Post Office Travel Money City Costs Barometer lists Athens and Lisbon as the best value cities in Europe for tourists this summer. The barometer rated a short stay at Athens at £207, compared to £423 for Paris. Queues have built up as UK holidaymakers have been arriving back at Channel ports in order to travel back to the UK. DFDS and P&O Ferries have apologised for the delays with some queues lasting for six hours. Dalata Hotel Group reports revenue up 9% in H1 to €220.2m and adjusted EBITDA up 14% to €83.5m. The hotel company added 1600 rooms YTD and entered into a lease for its first hotel in continental Europe. The company said it was in a robust financial position which provides opportunity to grow. OTHER LEISURE: The Premier League broke its spending record during a transfer window, coming in at £1.9bn. Manchester United’s acquisition of Antony became the most expensive ever deadline-day signing ever at £82m, with a goal on his debut justifying his price. Battersea Power Station is set to open its doors to the public next month. The site will be open on Friday, 14 October. Accountancy and advisory firm Mazars has reported on the state of insolvencies in the UK saying that there have been notable increases in some sectors. It reports that the number of corporate failures in the Film & TV sector rose by 69% (from 67 to 113) and in manufacturing it increased by 63% (from 893 to 1,454). FINANCE & MARKETS: S&P Markit Services PMI due out later this morning. The British Chambers of Commerce now expects the UK to enter recession before the end of this year, with growth expected to be weak into 2024… The BCC has gone on to say that many, otherwise viable businesses will ‘close their doors this winter’ if they are not given help to pay their energy bills… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. The US economy added 315,000 new jobs in August. This was well down on July. It could dampen expectations re interest rate rises. The Nationwide last week said that house price growth in the UK slowed to 10 per cent in August, from 11 per cent in July. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Some major moves in the markets over the last week. Sterling sharply lower, UK bond rates sharply higher. Sterling sharply lower at $1.1465 and €1.157. Oil down at $95.07. UK 10yr gilt yield up markedly at 2.90% (up 28bps on the week). UK market rose on Friday but is set to open down around 79pts as at 6.30am. FORTHCOMING NEWS: A gentle run in before it becomes noticeably busier later in the month. Amidst a smattering of economic announcements, Restaurant Group reports H1 results to end June on Thursday and Gear 4 Music hosts its AGM on Friday. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. |
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