Langton Capital – 2022-11-17 – Fuller’s H1, food costs, inflation, CCL, Flutter, Soho House & more:
Fuller’s H1, food costs, inflation, CCL, Flutter, Soho House & more:A DAY IN THE LIFE: Like a convoy in wartime, many other things can only move at the speed of their slowest bits. Phrased differently, this may be the same as saying that pinch-points (be they lack of opportunities, space, people or money) will determine what can and can’t be done and, in many cases out there, it seems to be a lack of labour. Langton itself is afflicted by this and the hospitality industry is full of examples but, on a domestic level, if you try to give food to a supermarket’s foodbank collection point, and the bins are full, what are you going to do? You can’t throw your sauce mixes, bottles of vinegar, tins of beans and the like of the floor so, like an idiot, you pack them back in the car and take them home with you and the same goes for recycling. If you’ve filled your car with bags of clean but slightly suspect tins, jars, bottles and plastic trays, and then the recycling point is closed, full or only has half its bins functioning, what then? Fly-tipping isn’t a good look so you’ll end up driving them miles and miles around town before taking them hope and tipping them in the garage. Ah, well. All eyes on the upcoming Autumn Statement today so 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 FULLER’S H1 NUMBERS: Fuller’s has this morning reported H1 numbers and our comments thereon are set out below: The numbers: Fuller’s reports that sales in the first 26wks of the year rose from £116.3m in the Covid-impacted last year to £168.9m (+45%). EBITDA is up from £22.8m to £28.9m (better trading but less help from government & higher VAT) and adjusted PBT is more than doubled from £4.6m to £9.8m. Adjusted EPS has broadly doubled at 12.5p (2021: 6.1p) and the company is proposing an interim dividend of 4.68p (2021: 3.90p) FSTA says that LfL sales in H1 were up by 20% with Central London (which has been slower to recover and which has suffered from rail strikes and the like) up as much as 67%. Net debt is £129.2m vs £131.5m at H1 last year • 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: Industry costs: The MA reports that increasing the National Living Wage (NLW) from £9.50 to £10.40 has led to trade bodies such as the BII to say the sector had already faced huge increases to their staffing costs in recent years and suggest that the move in the minimum wage could be too much for the sector to bear… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The impact on differentials: Any move in the NMW and / or the NLW would normally lead to increases further up the pay scale with the impact diminishing as income levels rose. In this instance, if operators do not believe that their customers would be able to bear the higher costs, this might not happen… Inflation levels. See also Finance & Markets below. UKHospitality CEO Kate Nicholls has commented on the ONS October inflation figure of 11.1%, saying ‘businesses have been doing their best to keep prices for customers under control but this is ever-more challenging as energy bills and supply costs continue to soar…’ The wrong kind of inflation. The ONS has confirmed that the no1 contributor to CPI increases in the year to October was gas & electricity costs and the no2 was food & non-alcoholic drinks. These are, to say the least, essentials… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. More on food prices: The latest CGA Prestige Foodservice Price Index (FPI) has ‘continued its relentless upward march again during October to hit 19.9%—a ninth consecutive month of double-digit inflation.’ CGA says ‘as in previous months oils and fats led the way, rising almost 50% year-on-year. Prices in the milk, cheese and eggs category fell slightly in the month, but still increased by more than 30% compared to October 2021…’ • 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: London Mayor Sadiq Khan’s “Let’s Do London” has brought in £289m additional spending to the capital, according to figures. The campaign was expanded earlier this year, with it being estimated that the campaign will bring an additional 600,000 visitors to London from other parts of the UK, Germany, France and the USA…. SIBA announces a new ‘Empowering People’ award which will highlight the best breweries in the UK to work for. The award is the newest category in the SIBA Business Awards 2023, which open for entries today. Demographics. The UN human rights council has called on the UK to do something to tackle rising poverty. Whilst some of the demands came from countries such as North Korea, Russia and Belarus, others came from friendly states such as New Zealand, Switzerland and Canada. Asda and Lidl have started to ration the number of boxes of eggs customers can buy due to supply issues as UK poultry farmers face rising costs and a severe outbreak of avian flu… COMPANY NEWS: Nick Jones is to step down as CEO of Soho House, after 27 years since founding the business, set to be replaced by the company’s current president Andrew Carnie. The company said its total members grew to 211,351 in Q3 from 193,370 in Q2 and 46.3% YoY. However, the company said it will slow down the pace of new openings. Restaurant group Rockfish is to open a new site in Topsham, Devon, next year. The company says ‘our quayside Topsham restaurant will be opening in early 2023. We are looking forward to serving our signature sustainable seafood, landed in Brixham, seasonal side dishes and delicious drinks in this wonderful town and becoming part of the Topsham community.’ Leon is set to open its first site in Essex, in Chelmsford, on 17 November, with MD Glen Edwards saying ‘It’s been great to become such a familiar brand in the capital but it’s also really important for us to make our restaurants accessible to people up and down the UK.’ HOLIDAYS & LEISURE TRAVEL: Carnival Corp shares finished yesterday down 14% as the group announced plans to raise $1billion with convertible senior notes. The company says it will use the cash to ‘make principal payments on debt and for general corporate purposes’. The convertible notes will pay interest at a rate of 5.75 per cent per year… Greek tourism minister Vassilis Kikilias has called UK visitor numbers to Greece in 2022 ‘fantastic’, as British arrivals surpassed three million. Kikilias said ‘Brits love Greece whether it’s for the loud, party destination; a family holiday with the kids; golf and sport; culture and food; or short breaks.’ Network Rail members of the RMT union and 14 train companies have voted in favour of further strikes. Unions say salaries should increase to reflect the rising cost of living but the rail industry is under pressure to save money as a reduction in people travelling after the pandemic left a hole in its finances. South Yorkshire Mayor Oliver Coppard has reportedly said that Doncaster Sheffield airport could reopen in April if a buyer steps forward to take the airport from owners Peel Group. The airport closed on 4 November. OTHER LEISURE: Flutter has updated on elements of its business as a part of an investor teach-in saying that it is showcasing its US business, FanDuel. Flutter says ‘we are confident in a path to a 2030 total addressable market of more than $40bn in gross gaming revenue which represents growth of 4.5 times the size of the market today. By continuing to leverage the FanDuel Advantages and Flutter Edge, this would imply a significant runway of future revenue growth for FanDuel…’ Elon Musk has reportedly told Twitter staff that they will have to work “long hours at high intensity” or leave the company. FINANCE & MARKETS: Employers’ organisations have responded to yesterday’s 41yr-high inflation numbers. The CBI looks on the bright side and says ‘despite the higher energy price cap pushing inflation to another high, there are signs that we are reaching its peak…’ • 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 reports that UK house prices increased by almost 10 per cent in the year to September but says that they were little changed in the two last months of the period… Bank of England governor Andrew Bailey has told the Treasury Committee group of MPs that September’s disastrous mini-budget damaged the UK’s reputation internationally. He says ‘it will take longer to rebuild that reputation than it will do to correct the gilt curve.’ Both chancellor Kwasi Kwarteng and PM Liz Truss resigned as a result of the damage caused. Sterling up at $1.1897 and €1.146. Oil lower at $91.99. UK 10yr gilt yield down another 14bps at 3.15%. World markets lower yesterday and London set to open down around 9pts as at 6.30am. THE AQUIS MARKET: Broker VSA Capital is hosting an Aquis Day on Tues 29 November at the Royal College of Surgeons (38-43 Lincoln’s Inn Fields, London, WC1A 3PE). The event will feature around 20 companies, who will present to attendants and take part in a competition to win the ‘Britain’s Got Aquis’ title. Judges on the day will include Andy Brough (Schroders) and Judith Mackenzie of Downing LLP. Tickets and details are available HERE https://www.eventbrite.co.uk/e/the-vsa-capital-aquis-showcase-event-tickets-430890363677?aff=odeimcmailchimp&mc_eid=cfe56acbe0&mc_cid=cd83de005f Attendance costs £20 – but Langton has a number of complimentary tickets and we’re open to suggestions as to who we should give them to…. Drop us a line. 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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