Langton Capital – 2022-11-29 – Marston’s, 888, easyJet, Shaftesbury, sales, the consumer & other.:
Marston’s, 888, easyJet, Shaftesbury, sales, the consumer & other.:A DAY IN THE LIFE: When you have an old dog and it goes quiet, you can be pretty sure that it’s asleep and concentrating hard on nothing more dangerous than passing copious quantities of noxious wind. Or it may be dead, of course, but if you’ve got a young dog and it goes quiet, it’s likely to be doing something either bad or very bad. Like chewing a hole through the skirting board, trying to get its whole body in the lavatory bowl or trying to scratch its way into the oven to see just what the heck smells so good inside. Or it may be shredding internet cables or doing something unspeakable to a cushion but, whatever it is, it will be either expensive or destructive and probably both and, much as it goes against the grain to investigate something when peace and quiet seems to have descended for once, it may pay you to do so. Anyway, enough of that, we’ve got shredded cables and chewed up skirting board to replace. 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 MARSTON’S – DELAY TO FULL YEAR NUMBERS, NO CHANGE TO GUIDANCE: Marston’s has announced that there will be a short delay to the publication of its full year numbers. It has further updated on trading and our comments thereon are set out below: Results announcement: • Marston’s has announced that its results for the year ended 2 October 2022 will not be released on 29 November 2022 as previously announced ‘due to a short delay in the completion of audit procedures at our associated undertaking, Carlsberg Marston’s Brewing Company.’ • MARS says ‘this is at the request of Carlsberg’s auditors who are finalising their audit documentation.’ • MARS says it ‘has been reassured that there is no disagreement between Carlsberg’s auditors and CMBC management and we should be in position to announce Marston’s results within the next week. The delay finalising the CMBC audit is entirely procedural and outside of Marston’s control.’ Current trading: • MARS reassures, saying ‘there is no change to the guidance previously issued by the Group in respect of FY 2022, nor to the Group’s trading update given on 11 October 2022.’ • It adds that its ‘auditors have indicated there are no other significant outstanding procedures from their perspective.’ • The company goes on to say ‘we are also pleased to announce that trading since the year end is encouraging.’ • It says ‘like-for-like sales in our managed and franchised pubs are up 6.8% vs the same period last year and 5.0% up vs the same period in FY2019.’ • It adds ‘October earnings were in line with our expectations.’ Near term trading: • MARS says that ‘bookings for Christmas Day and Christmas Fayre are encouraging and are building in momentum.’ • It adds that ‘total bookings for the Christmas period are currently higher than in 2019 and in line with our plans, albeit walk-in trade typically accounts for a significant proportion of overall sales over the Christmas trading period.’ • Re the football, MARS reports that ‘for the two England World Cup games which have taken place to date, total like-for-like sales on those days were c.30% up compared to 2021, with drink sales up c.50%. Food sales were better than anticipated, being up c.1%.’ Medium term outlook: • Marston’s says ‘we remain cognisant of the current macroeconomic environment with the cost-of-living crisis, the impact of the conflict in Ukraine and the resulting challenges this brings in respect of cost inflation and the potential impact on disposable income, as well as potential supply issues.’ • It adds that ‘pubs have demonstrated their resilience time and time again and, to date, there is little in our trading performance to suggest that there has been a change to consumer behaviour; our guests still want to go out and have an affordable treat in a Marston’s pub.’ • Marston’s therefore concludes ‘as a consequence of the above, there are no material changes to events that would require a change to earnings guidance in respect of financial year 2023.’ Balance sheet issues: • MARS reports on its estate valuation, saying that ‘following a valuation of Marston’s pub assets, the Group can also announce the carrying value of the estate is now £2.1 billion (2021: £2.0 billion); as a result of the valuation undertaken in H2.’ • It says ‘the result of the valuation is an increase in the net book value of the estate of £93.4 million.’ Langton Comment: • A delay to the numbers is unfortunate but, as the group has reassured that the issues are purely procedural, there will likely be no changes to numbers are a result of either the delay or the trading update and MARS shares are broadly unchanged in Monday trading. • The trading update does not comment on margins or profits and debt figures and other balance sheet issues will follow when the company reports its full year numbers. • The facts that a) there should be no changes to guidance, b) current LfL sales are pretty strong and c) estimates as to property values have been raised, should reassure. • Indeed, as trading numbers are currently hard to pin down, a sum of the parts valuation may be appropriate at some point as Marston’s is both an investor in its beer company, an owner of a sizeable freehold estate and an operator of its pubs. • The mark to market on its swaps should have moved in a positive direction (JDW recently booked a sizable gain) and none of the above will be lost on potential private equity buyers. • The market remains challenging and difficult to read but we believe that MARS is generating cash and cutting debt. • Would-be shareholders may currently be shying away from consumer stocks in general but, when a degree of discrimination between one consumer stock and another returns, Marston’s is well-positioned to prosper. PUBS & RESTAURANTS: Sales volume (and footfall): The CBI yesterday reported that retail sales volumes were falling ‘at a firm pace in the year to November.’ It says sales were down 19% in November with ‘a broadly similar fall expected next month (-21%).’ That doesn’t make for a very good December either in terms of spend or, as any nearby pubs, cafes, restaurants and coffee shops will note, footfall… • 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: In the US, Alignable shows that there has been an improvement in the ‘delinquency’ rate re rental payments across smaller restaurant chains in November. Some 42% of independent restaurant owners could not afford to pay the rent in November. While a high number, the November figure is an improvement over the 49% rate in October. The figure was 36% in September. Toggle has partnered with Solovey Vodka to raise £1m to help Ukrainians impacted by the war in their country. The hospitality platform will donate the amount to the charity War Child. COMPANY NEWS: Marston’s announced yesterday that its full year numbers would be slightly delayed. It also updated on trading and the reception has been broadly positive. The Times reports that the World Cup has helped sales. The Standard says the World Cup has provided a ‘boost’ and Reuters points out that Christmas bookings are ahead of 2019 levels. West End property company Shaftesbury has reported full year numbers to end-September saying that ‘the year has seen a rapid rebound in the West End economy as Covid-related disruption receded and patterns of everyday activity returned to pre-pandemic normality…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. EG Group, which owns ASDA and Leon as well as its original petrol retail business, has reported numbers for the three months to end-September saying that total revenues rose 23.8% with EBITDA up 29%… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Cooks Coffee Company has announced H1 numbers for the six months ended 30 September 2022 saying that revenue from operational trading for the NZ-based company with UK operations increased by 37% to NZ$1.93m versus H1 FY22… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Propel reports that Albion & East has secured a Clapham site for what will be a flagship venue, set to open in spring 2023… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Barkby Group is planning to dispose of its pub estate amid ‘strategic change’ in the business. The company will instead look to ‘focus on roadside property development and investment.’ However, it is expected the Group will keep its core business of premium gastropubs. Coffee#1 is set to open its 7th site in Bristol, located on 60 Union Street, a former Carwardine’s cafe in the 1920s. Three London pubs which previously formed part of the Harcourt Inns estate are being marketed by Savills. The pubs are the Crown in Chiswick, the Three Cranes in the City and the Harcourt in Marylebone. Paul Breen of Savills said ‘It is extremely rare to see freehold properties of this quality being brought to the market.’ St Austell Brewery has taken a minority share in North Cornwall’s Harbour Brewing Co in an arrangement which will see Harbour’s beer become available to a much wider audience for the first time. Harbour Brewing’s founder Eddie Lofthouse said ‘Our new partnership means we can reach people all across our home county’. HOLIDAYS & LEISURE TRAVEL: EasyJet has today reported full year numbers to end-September saying that it has ‘achieved a bounce-back’ and has delivered its best EBITDAR numbers for Q4 this year… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Travel Weekly’s Sustainability Summit saw Deloitte’s sustainability director Emily Cromwell claim that consumers are not willing to pay extra for more environmentally friendly holidays. Travelodge claims that customers are likely to trade down to budget hotels from other segments as the cost of living crisis bites… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. OTHER LEISURE: 888 is to host a Capital Markets Day today and it has released an update on trading ahead of the event. The company says its aim is to generate revenues of over £2bn from 2025. It says it wants an adjusted EBITDA margin of over 23% and adjusted EPS of at least 35p… Nintendo reports that Pokemon Scarlet and Violet have had the most significant worldwide launch sales in the company’s history, selling a combined 10 million copies in their first three days… FINANCE & MARKETS: Accountant BDO has suggested that the UK economy has become much more volatile over recent years… Zoopla has reported that average home price sales in recent weeks have been 3% below asking prices… Sterling down at $1.2009 and €1.1556. Oil higher at $84.60. UK 10yr gilt yield up 2bps at 3.13%. World markets broadly lower yesterday but Far East mixed in Tuesday trade. London set to open up around 16pts as at 6.30am. THE AQUIS MARKET: Broker VSA Capital is hosting an Aquis Day today, 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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