JD Wetherspoon, business confidence, disposable income, inflation etc.:

A DAY IN THE LIFE:

A big thank you to those who replied to our comments on Smart Meters and how their installation may be positively correlated with nervous breakdowns across their customer base.

Because, looking at the thing running at around double the rate it was a few weeks ago isn’t conducive to getting a good night’s sleep.

Furthermore, though some would argue that the odd person going batty with stress was a price worth paying if the UK uses a tad less energy, I would suggest that unforeseen consequences – once they are foreseeable – should be weighed alongside the intended results.

I mean it was interesting watching the debate about clingfilm wrapping on cucumbers, for example. Basically yes, plastic’s bad but if you don’t wrap cucumbers then you need to grow, fertilise and transport twice as many of them because half go rotten, which illustrated that not much is simple and that trade-offs have to be borne in mind.

Anyway, let’s not get too heavy. It’s Friday. Have a good weekend and let’s move on to the news:

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JD WETHERSPOON – FULL YEAR NUMBERS:

JD Wetherspoon has today reported full year numbers and our comments thereon are set out below:

Headline numbers:

• The company reports revenues of £1.7bn vs £1.8bn in 2019. The co reports LfL sales down 4.7% vs 2019.

• JDW reports a loss before tax of £30.4m compared to a profit of £131.9m in 2019. Estimates are currently in flux but the numbers could prompt downgrades.

• The loss per share is 19.6p (2019: earnings of 75.5p)

• The co is not recommending a dividend and there were no share buybacks during the half year

Outlook & comments:

• The company updated on the first 50 weeks of its full year when it commented in July this year

• Re current trading, JDW reports that ‘in the first 9 weeks of the current financial year, to 2 October 2022, like-for-like sales increased by 10.1%, compared to the 9 weeks to 3 October 2021.’ This will still be lower than 2019 numbers with costs markedly higher.

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BRITISH CHAMBERS OF COMMERCE Q3 SURVEY:

Conclusion: The survey concludes that Q3 has seen ‘a significant decline of key economic indicators, with weakening structural business conditions and confidence a cause for concern.’ The survey suggests that, if operators out there have found the going tough recently, they are far from alone…

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PUBS & RESTAURANTS:

The consumer:

It sometimes feels as though everybody is demanding a slice of your income. The Institute for Fiscal Studies has said that, because taxable pay levels are being frozen in a time of high inflation, a stealth tax is being imposed on workers. It calculates this at around a £2 hit for every £1 saved because tax rates are being cut…

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Food inflation:

CGA and Prestige Purchasing have released their Foodservice Price Index for August, saying that it topped ‘15% for the first time as costs soar…’

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Discounts:

M&B brands Sizzling Pub and Vintage Inns are offering discounts, the latter offering £20 off a £40 spend for those signing up to its app. Sizzling Pub is offering two burgers for the price of one this Friday and Saturday evening.

The Lumina Intelligence UK Pub & Bar Market Report 2022 predicts that the market is set to value £22.5 billion in 2022, representing some 98% of its 2019 value…

The MA reports that the NTIA claims the UK’s Night-Time Economy  has been ‘under attack’ as escalation of noise complaints becomes a ‘real issue’. Following an influx of noise complaints since the sector reopened after lockdown in July 2021, businesses are now under pressure to tone down music and tell patrons to leave pubs quietly…

COMPANY NEWS:

The MCA reports that Tortilla is considering potential European openings next year, with CEO Richard Morris saying there was ‘nothing definite, but we know there is a big prize out there in Europe’.

Zonal has acquired Airship, in a deal which includes the Airship CRM and Toggle platforms. Stuart McLean, Zonal’s CEO said ‘This move will further integrate our products and represents a huge opportunity for our customers, who will benefit from the data-driven, business-building, and revenue-driving benefits that this integration will bring.’

The Crown Estate has signed Wonderville and NEON194 as tenants of the former Planet Hollywood on Haymarket and 194 Piccadilly, respectively. Wonderville offers an experience of theatre, food and drink and NEON194 will have a space for exhibitions, events, launches, broadcasts and performances.

The MCA reports that Wimpy general manager Chris Woolfenden says the restaurant’s heritage shouldn’t stop it from modernising and trying new things. Wimpy currently operates 67 restaurants in the UK, with the majority concentrated in the south east of England.

Constellation Brands has reported Q2 numbers showing reported Q2 EPS of $3.17, $0.39 better than the analyst estimate of $2.78. It adds that ‘revenue for the quarter came in at $2.66 billion versus the consensus estimate of $2.5 billion…’

Separately, Constellation Brands has announced ‘that it has reached an agreement with The Wine Group to divest a portion of its mainstream and premium wine portfolio, including Cooper & Thief, Crafters Union, The Dreaming Tree, Monkey Bay, 7 Moons, and Charles Smith Wines. This transaction is expected to close later today.’ No figures are mentioned.

Yummy Pubs has announced the sale of The Wiremill near Lingfield in Surrey, to the independent family brewer, Hall & Woodhouse.

HOLIDAYS & LEISURE TRAVEL:

Iata passenger data shows that total traffic in August rose by almost 68% compared to the same month last year and reached 73.7% of pre-pandemic levels…

The Co-operative Travel Consortium figures show that holiday cancellation levels are starting to drop overall despite a week-on-week jump of 40%. Consortium head of retailing Alison Holmes said cancellations ‘fluctuate but generally the volume of cancellations is coming down. It is nothing like we were getting two months ago…’

Saturday will see just 20% of trains run as RMT union members in 15 train firms and Network Rail strike in the eighth day of action over pay and conditions.

Parkdean Resorts has reported improved Visit England Quality Assessment and Star Ratings.

Research undertaken by Amex suggests that two-thirds of UK companies plan to increase spending on business travel by at least 50 per cent over the next year.

FINANCE & MARKETS:

Ratings agency Fitch has lowered its credit rating outlook on the UK from stable to negative. It cites unfunded spending and the risks flowing from the chancellor’s mini-budget.

The LSE has reported only eight IPOs in Q3. This, perhaps, because so many of the IPOs from 2021 and from earlier this year have performed so badly.

S&P Markit has reported its September PMI for the UK construction industry saying that there was a ‘return to growth after two months of falling output…’

Sterling weaker at $1.1159 and €1.1387. Oil price higher at $94.21. UK 10yr gilt yield heading back up, plus 17bps at 4.20%. World markets weaker yesterday and London set to open down around 17pts.

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