Langton Capital – 10 Oct 22 – BOWL, JDW, energy, confidence, closures, coffee, wage costs & other:
BOWL, JDW, energy, confidence, closures, coffee, wage costs & other:A DAY IN THE LIFE: Everything is relative and, as the late Hans Rosling said, you should never look at a number (or a bald statement of fact) without putting it into context. For example, when a billionaire says they’re having a bad week, they’re still likely four, five or maybe six zeroes ahead of the rest of us. And when Hull City is having a ‘good month’ it might mean they’ve won one and lost one in October. Which is good in the context of an early-starting relegation battle but, when the magpies on our lawn are caught raking through the dog poo and say they are ‘looking for the nice bits’, it’s hard to frame the subject such that any relative outcome to that particular endeavour could be termed ‘nice’ in any absolute sense. But anyway, live and let live. They think we’re idiots for not getting involved but here’s to a relatively ‘good’ week and 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 JD WETHERSPOON – ANALYSTS’ MEETING: JD Wetherspoon on Friday held an analysts’ meeting for its full year numbers and our comments thereon are set out below: Headline numbers: In the first 9 weeks of the current year, sales are up 10.1% vs last year, up 1.5% vs August/September 2019 (FY20), and up 7.7% against August/September 2018 (FY19). This shows the trend of improvement is continuing, from being -0.6% vs FY19 for Q4. Sales mix for the year was 36% Food and 60% Bar, with mix continuing to grow towards Food in trading in the new year. Outlook & comments: Utilities have been hedged to September 2023. If JDW had to pay the current market rate it would result in having to take 10-15p of price per product. During the year, JWD put through a price rise of c4% in March/April. Going forwards, the company said it planned to take price at a bit less than the inflation rate, shielding customers slightly, and making up the difference through volumes. • 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: Supply issues (energy). The MA reports that potential winter blackouts would put pubs and breweries in a position they ‘will not be able to recover from’. National Grid’s Winter Outlook report warned of potential planned blackouts in three-hour intervals across rotational locations over the coming months. General trading. The ONS reports that there were more than 5,600 insolvencies in Q2, the highest level since 2009. The sharp rise in energy bills was cited as the biggest problem for businesses, while difficulties paying debt, rising costs of raw materials and supply chain disruptions also took their toll. The latest Brookings-FT consumer & business confidence tracker finds that ‘a mood of mounting economic pessimism is taking hold across the world’s major economies, as soaring prices and geopolitical uncertainty damage the prospects of businesses and consumers…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The ONS on Friday updated on insolvencies in England and Wales in Q2 saying that the number had reached its highest level since Q3 2009. Accountant BDO comments on business output and confidence saying that it fell last month as recruitment slowed. BDO says its measure fell by 2.05 points to 94.30, its lowest since February last year… Analytics company Altus Group has suggested that some 50 pubs a month are currently closing across England and Wales. The research shows that, in Q3, some 150 pubs were either demolished or converted to alternative uses. The New West End Company, which speaks for some 600 businesses in the West End of London, has said that consumer spending is likely to fall for some time. The FT reports the research as suggesting that spending will be further squeezed. CGA’s Drinks Recovery Tracker for the week to 1 October shows that on-premise drinks consumption was up 3% in value terms on last year and up 2% on the pre-Covid week in 2019… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Other news: World Coffee Portal’s Project Café USA 2023 report claims that the number of people choosing oatmilk as their preferred beverage accompaniment has increased by nearly 7% since 2020. However, almond milk remained the more preferred accompaniment, with 28% regularly ordering it as their favoured plant-based milk alternative. Manchester night-time economy advisor Sacha Lord has tweeted ‘without urgent intervention, Hospitality will be decimated this winter. We need an urgent Vat Reduction.’ He calls on industry operators, workers and supporters to join a demonstration in Parliament Square on 7 November. COMPANY NEWS: Jeremy Clarkson has been ordered to shut his restaurant down, despite previously claiming to have found a ‘cunning little loophole’ to avoid having to get planning permission… PizzaExpress reports a group loss after tax of £48.9m for the 52 weeks to 2 January 2022, down from a loss of £285m the year prior… Brown-Forman has reached an agreement to purchase Diplomático Rum from Spanish company Destillers United Group S.L. for an undisclosed sum. The deal for the Venezuelan brand also involves the acquisition of a production facility in Panama. JD Wetherspoon shares were strong on Friday as the company reported sales up. Tim Martin says sales were “encouraging but not shooting the lights out.” He says customers have been slow to return. Jollibee reports an operating loss of £3.7m for the year ended 31 December 2021 from its 12-strong UK estate. Revenue increased to £11m from £3.9m in 2020, with the company saying it suffered ‘substantial interruption’ to its trading operations during the year as a result of Covid lockdowns. HOLIDAYS & LEISURE TRAVEL: USA becomes expensive as a destination market: USAirtours CEO Guy Novik has said ‘The exchange rate, combined with cost-of-living increases and increased interest rates, will reduce the size of the market. We anticipate the overall fall in the US market to be around 20% on 2019.’ Whitbread will invest £15m in raising the pay of over 30,000 staff amid the rising cost of living, with hourly-paid staff in its hotels, restaurants and guest support team seeing their minimum rate of pay increase by over 4%… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The rail industry told passengers to avoid travelling by train unless absolutely necessary last Saturday due to expected widespread disruption from strikes. Only a fifth of trains are set to run on Saturday, with services starting late and finishing early. EasyJet holidays has increased capacity for next summer by a reported 75%. Paul Bixby, Commercial Director at the company, says ‘with so many people getting back into the swing of travel this year, we know summer 2023 is going to be a huge one.’ This speaks to the desire to travel rather than the financial ability. Bixby says ‘so, we’ve made the most of our airline’s recently launched flying schedule, to offer thousands more holidays.’ OTHER LEISURE: Hollywood Bowl updates this morning on trading for its full year to 30 September 2022 saying that it has turned in an ‘excellent operational and financial performance.’ The co says that it ‘has continued its excellent momentum following a record first half with another period of strong trading and further growth.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The Rugby Union has reportedly confirmed that Worcester has been relegated from the Gallagher Premiership and suspended from the Premiership Rugby Cup for the rest of the 2022-23 season following its collapse into partial liquidation. FINANCE & MARKETS: The Halifax on Friday reported that the UK housing market was showing signs of slowing down. It said higher interest rates would exert “significant downward pressure” on prices in the near future… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Oxford Economics opines that UK house prices are overvalued by about 30 per cent. The Times quotes it as suggesting that ‘affordability has fallen over the past few weeks as underlying funding costs for lenders have risen’. See comments above. The Economist comments on Kwasi Kwarteng and PM Liz Truss’s mini-Budget saying it is a masterclass in how not to run a country. It’s a view. Ratings agency Moody’s has said that the UK could lose its reputation for financial stability. It says the latest mini-Budget was “ideologically” driven… The Guardian suggests that ‘Kwasi Kwarteng has been handed independent forecasts on the state of the UK finances that are expected to show a hole of more than £60bn left by his sweeping tax cuts and a sharply slowing growth outlook.’ US jobs growth in September slowed to 263,000, the lowest number since April 2021. Sterling weaker again at $1.1069 and €1.137. Oil price higher at $97.08. UK 10yr gilt yield up another 6bps since Friday to 4.26%. World markets weaker on Friday & London set to open down around 34pts 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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