Langton Capital – 2022-10-03 – Confidence, Tortilla, inflation, CCL, D&D, Parkdean & more:
Confidence, Tortilla, inflation, CCL, D&D, Parkdean & more:A DAY IN THE LIFE: I think our puppy would have produced a better Budget than the one turned out by no11 Downing Street and its highly paid occupants a week ago last Friday. Because, I’ve had a word with her and, whilst she would have reduced the price of dogfood markedly, she would have done nothing else and, though the financial markets can be picky, I’m pretty sure they would have been OK with that. So, if correct, had a virtually brainless dog produced the Budget, Sterling would have been stable, mortgage rates would be about 200bps lower than they are currently for first time buyers, pension fund managers would have had fewer heart attacks and the Bank of England (read the taxpayer) would have been £65bn better off. Anyway, enough of that. The Tory Party conference kicked off in Birmingham yesterday, and the above topic will likely get an airing. 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 CONFIDENCE… Introduction: This is a complicated but very important area. Confidence can be discussed with regard to Government, corporates or consumers. The former tends to remain perennially ‘confident’ whilst business decisions re investment and jobs are made with corporate confidence in mind Consumer confidence: • 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: Trading: The CGA Drinks Recovery Tracker for the week to 24 Sept shows that ‘an extra bank holiday and more strong beer and cider sales helped to pull On Premise drinks sales just ahead of 2021 levels…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Costs: Research from the Department for Environment, Food and Rural Affairs (DEFRA) shows that September seasonal fruit and vegetable prices have climbed by 35% versus the same period in 2019. Runner and climbing beans saw the biggest increase at 209% rise from £1.40 per kilogram in 2019 to £4.24 in 2022. This may be changing consumption patterns… Inflation: Sky quotes research by the Energy and Climate Intelligence Unit as suggesting that the price of groceries could rise by £1.7bn due to the cost of carbon dioxide increasing by as much as 3000%… Confidence. See comments also above. Hours after telling the BBC that she was committed to cutting the 45p tax rate to 40p (and saying that it was the chancellor, Kwasi Kwarteng’s idea), the Press is being briefed that the cut will be junked… Other news: UKHospitality has urged the government to create a level playing field for all accommodation providers by introducing a check-based tourist accommodation scheme. Rules banning shops from selling perceived ‘junk’ food at the till, to tempt impulse buyers, came in on 1st of this month. Drive throughs. The Times reports NPD as confirming that competition for drive through sites in the UK remains intense… Raising cash. The EU has agreed to impose a windfall tax on certain energy companies as well as mandatory cuts in electricity use. The cash raised is expected to go to families and businesses. Export difficulties post Brexit. The Sunday Times reports that Old Dairy Brewery, which ‘the government proclaimed as an export champion after Brexit, is racing to find a buyer weeks after it revealed it had only one EU customer left.’ The company has filed notice of intention to appoint administrators… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The Sunday Times reports on the growing trend across hospitality companies to recruit new labour from amongst recently retired workers. COMPANY NEWS: Tortilla Mexican Grill – sales up but profits down in H1. The company has reported H1 numbers for the 26 weeks to3 July saying that revenues rose by 30% to £26.9m and LfL sales were up 19% on the same period last year. Adjusted EBITDA was £2.5m (2021: £4.9m) pre IFRS 16. The PBT was £0.3m vs a profit of £2.6m in the prior half year. Tortilla says it has made ‘great progress on new store roll-out with five sites opened across the UK, and one delivery kitchen, taking the total number of Group sites, including eight acquired Chilango sites, to 84 at the Period end.’ It adds that it has five further sites planned to open in H2 FY22 ‘with new store roll-out expected to increase to 12-15 per annum from FY23…..’ Comments below on cautionary comments, current trading, margin pressure etc. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Co-founder and CEO of D&D London, Des Gunewardena, has left the restaurant group ‘to pursue other ventures’. David Loewi, the other co-founder, has been appointed as interim CEO. D&D has 40 restaurants across the UK and internationally…. Tim Horton’s Middle East franchisee AG Café has launched its first five stores in Kuwait. Tim Hortons is Canada’s largest coffee chain and currently operates more than 5,100 outlets across 14 countries and regions. Hypha, a vegan Michelin Green Star restaurant in Chester, has announced its temporary closure as a result of soaring costs. Hypha stated that it intends to return ‘in a different time, location and execution’. Fuller’s has reported that Sam Bourke has joined the company as Retail Marketing Director Some perplexing share price moves on the market on Friday. All numbers over 5%. Fallers Cineworld 6%, Young & Co 6%, TUI 10%, Rank 11%, Carnival 21%. Risers – C&C, Playtech, Restaurant Group & Shaftesbury, all 5% better. HOLIDAYS & LEISURE TRAVEL: Carnival reported Q3 numbers on Friday and its shares dropped by 21% during London open hours. The co reported a net loss of $770 million and adjusted net loss of $688 million for the quarter. It says ‘revenue increased by nearly 80% in the third quarter of 2022 compared to second quarter 2022, reflecting continued sequential improvement…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Some 50,000 rail workers were on strike yesterday. Only around 11% of trains ran normally. Parkdean CEO, Steve Richards, has said that his company remains confident that holidays will be one of the very last things that consumers will be willing to give up. The company says of the summer that it was a “very busy period in which our parks were full…” Travel firms have been warned about a polarisation in holidaymakers’ spending power in turn-of-year campaigns and prepare for a ‘price game’. Hays Travel owner Dame Irene Hays said ‘Demand has grown for both luxury and package holidays. It is really important travel companies focus on both groups with a degree of sophistication’. Swiss police are investigating the interim boss of lastminute.com over alleged Covid loan fraud. The company released a statement saying ‘The board has expressed its full confidence in Laura Amoretti to continue leading the company in this challenging period.’ FINANCE & MARKETS: The OBR will deliver an initial forecast for the government’s mini budget this Friday. The government has not committed to releasing the forecast, saying it will update further on 23 November. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The UK economy grew by 0.2 per cent in Q2, reducing the likelihood of a technical recession. The ONS says ‘these improved figures show the economy grew in the second quarter, revised up from a small fall.’ It says ‘they also show that while household savings fell back in the most recent quarter, households saved more than we previously estimated during and after the pandemic.’ GDP is still 0.2% below that in Q1 2019. Nationwide reported last week that the cost of the average house in the UK rose by 10% in the year to August. PM Liz Truss has conceded there was “disruption” in the UK economy following the mini-budget but she tells the Sun that she had “acted decisively” and would keep an “iron grip” on the country’s finances. Sterling lower at $1.1086 and €1.1324. Oil down at $87.38. UK 10yr gilt yield some 13bps lower at 4.09%. Markets heading lower on Friday and London set to open down around 79pts as at 6.30am. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. |
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