Langton Capital – 2022-09-22 – Energy Relief Bill, trading, COM, Adnams, VARE, Playtech & other:
Energy Relief Bill, trading, COM, Adnams, VARE, Playtech & other:A DAY IN THE LIFE: After a hiatus following the Queen’s death, economic news is back on the front pages and it’s been at the steroids. The UK government announced pretty scary borrowing numbers yesterday and then splurged more cash as a part of its £150bn energy support package. It will announce tax cuts on Friday leaving many of us wondering if we haven’t stepped through the looking glass. Elsewhere, the Fed jacked interest rates, the Riksbank in Sweden stuck its own rates up by 100bps and Sterling fell to a 37yr low. That’ll happen if you spend and don’t tax (or grow) and, to add to the above, the Bank of England is likely to bung UK rates up another 75bps in what looks like a globally competitive race to strangle spending as rapidly as possible. For those on floating rates, mortgage bills have almost trebled and, for those on fixed rates, there’s rather a shock to the system coming a little bit further down the road. A bit heavy on the economics? Maybe. GfK will comment on consumer confidence tomorrow. 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 https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN ENERGY BILL RELIEFSCHEME: Headlines: Details announced yesterday were much as expected with bills perhaps cut by half for the winter. Relief will be backdated for those who fixed in the period since 1 April, April Fool’s day, with those who fixed a day before then (as it stands) left out in the cold. HMG says the relief ‘will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6 month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. RECENT TRADING: Introduction: Thank you to those who provided feedback. These are abnormal times. Comps are all over the place. Operators should be (and are) smashing 2021 numbers out of the park – but that’s not the point. Inflation-adjusted comps with 2019 may be more relevant and, even then, we would have to get from sales via costs to profits as margins are under pressure. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. PUBS & RESTAURANTS: Consumer cost of living crisis: The cost of living crisis worsens, as the Money Advice Trust report says that nearly 11 million people are now behind on their bills while more than 5 million have gone without food. Nearly 8 million people had sold a personal or household item to help cover bills, according to the poll… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The Bank of England looks set to raise interest rates by 75bps this lunchtime, the largest single increase in 33yrs. Hargreaves Lansdown suggests that such a move would take £3.1bn of spending power out of the economy… Other news: Wales has included flimsy plastic bags in a list of items to be prohibited if a bill put before the Welsh parliament on Tuesday becomes law… Drinks manufacturer C&C Group has entered a 3 year partnership with Big Issue Group, aiming to change lives through enterprise. The Real Living Wage is to be raised by £1 to £10.90 earlier than planned in order to try to help with the cost of living crisis. The Living Wage Foundation has brought forward its November rate… COMPANY NEWS: Comptoir has reported H1 numbers saying that revenue rose by 159% to £14.5m with an adjusted EBITDA of £3.4m, up 112.5%. The group made a profit after tax of £946k against a loss last year of £1.2m. The company says that net cash at the year end was £8.2m… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Adnams plc has updated on H1 trading saying that it ‘experienced a trading period marked by stabilisation and consolidation following the prior two years of disrupted trading. This resulted in revenues of £30m, up £9m on 2021, delivering a much reduced operating loss of (£0.7 million) compared to (£3.1m) in the previous year, a result in line with expectations…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Prezzo has announced that Dame Karen Jones is to step down as its executive chair after four years. Jonathan Goldstein, CEO of investment firm Cain International, which bought Prezzo in 2020, will become non-executive chairman. Jones will continue to work as a special advisor. Various Eateries has announced that Oli Williams ‘has confirmed he is to step down as Chief Financial Officer and director of the Company with effect from 11 November…’ Leeds-based brewery North is opening the North Taproom: Snow Hill in Birmingham’s city centre this November. The new taproom is North’s ninth venue, and the team’s first outside their home county of Yorkshire. Las Iguanas has announced that it will open its new, 200-cover restaurant in Canterbury, its first in Kent, on 26 September. Coffee company WatchHouse is reported to be preparing for a US debut as it undertakes a crowdfunding exercise that has already surpassed £4.5m. WatchHouse operates 10 stores across London. European private-equity firm InvestIndustrial has taken a controlling stake in Eataly SpA. The move involves an investment of around €200m. HOLIDAYS & LEISURE TRAVEL: Travel agencies remain cautiously upbeat about trading for the rest of the year… Current bookings. Travel Weekly reports that Travel Counsellors made almost £60m in UK leisure and business travel sales in August. The company also reported record bookings for winter and 2023 with levels up 45% on pre-pandemic levels despite the current squeeze on UK finances. The CAA has issued a final reminder to consumers to cash in or book a holiday with any outstanding refund credit notes as these lose Atol financial protection at the end of September. An HVS seminar has been told that ‘managing hotels through high inflation: a game of maximising revenues and controlling costs.’ Speakers said ‘the biggest challenges affecting hotels through this period of high inflation relate to the cost of labour, rising energy prices, coping with supply chain issues, the cost of debt and uncertainty that makes budgeting for the year ahead almost impossible.’ The Welsh Government is reported to be considering a tourism tax that would apply to overnight visitors, including those who already live in Wales. Welsh Conservatives have said the plan could put jobs at risk. Ryedale tourist attraction Yorkshire Lavender is reported to have filed for liquidation owing local firms and HMRC £1m… OTHER LEISURE: Playtech has reported H1 numbers saying that revenue rose by 73% to €792.3m with adjusted post tax profit also up 73% at €94.3m. The company says it has had an ‘excellent H1 2022 performance driven by regulated B2B markets, and Snaitech…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Games Workshop shares fell by more than 10% on Wednesday after the company reported weaker profits over the last quarter. RETURN TO ‘NORMALITY’ WATCH… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. FINANCE & MARKETS: The Federal Reserve in the US put rates up there by 0.75% as expected. Some 20% of observers had expected a 100bp rise. The dollar strengthened on the news. Action in the bond market with the US Fed & the Riksbank in Sweden having spoken & the Bank of England to comment tomorrow. Inverted yield curves imply worries about inflation short term and recession in the medium term. Increased by interest charges on prior borrowing, the UK government borrowed materially more than expected in August. Public sector borrowing came in at £11.82bn for the month per the ONS. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The IFS has said that the proposed tax cuts amount to a “gamble” that may not pay off. It says ‘while we would get to enjoy lower taxes now, ever-increasing debt would eventually prove unsustainable.’ The IFS adds ‘the government is choosing to ramp up borrowing just as it becomes more expensive to do so, in a gamble on growth that may not pay off.’ The German government has said it will nationalise Uniper, the country’s biggest gas importer, which has faced huge losses as a result of the energy crunch. Sterling fell yesterday to a 37-year low against the dollar. Whilst Sterling has been particularly weak, the dollar is strong against most currencies. The CBI reports that ‘UK manufacturers reported a slight fall in output in the three months to September, with a much sharper decline expected in the next three months.’ if this feeds through to slower investment and maybe job losses, it could impact demand for the hospitality industry… Sterling down against the USD at $1.124 but level to slightly up v the Euro at €1.1436. Oil lower at $90.10. UK 10yr gilt yield up another 3bps at 3.32%. World markets heading lower yesterday and London set to open down around 67pts as at 6.30am. DOWN THE RABBIT HOLE ECONOMICS: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. FORTHCOMING NEWS: Corporate news-flow quietening down but lots of stats & economics. This week saw TUI report H1 numbers and Fullers and Tasty also update on trading. Ditto City Pub Group, Ten Entertainment and Games Workshop alongside Hostmore. Playtech, Adnams and Comptoir report today. To come, Cineworld has delayed its H1 numbers to 30 September but Carnival updates on Friday. In the world of statistics & economics, the Fed opined on US interest rates yesterday, the ONS revealed quite scary borrowing numbers and the Bank of England speaks today Thursday, where a 75bp rise is odds-on. GfK updates on UK consumer confidence on Friday. RETAIL WITH NICK BUBB: Nick is taking a well-earned break. |
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