Langton Capital – 2023-01-26 – JDW, DGE, JET2, RNK, BVIC, Playtech, Fever Tree, Time Out & more:
JDW, DGE, JET2, RNK, BVIC, Playtech, Fever Tree, Time Out & more:A DAY IN THE LIFE: Bit of a backlog and busy today. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories (after the ellipses) 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 UTILITY BILLS: Question: Thanks to those who replied yesterday and Tuesday. Here for the last time of asking, we’re repeating the question that will have a lot of different answers: what are you paying for your gas and electric? It will depend very much of if and when the contract was fixed but it would be very interesting to know and we can summarise the results later in the week. Please let us know. JD WETHERSPOON – Q2 & H1 CONFERENCE CALL: Following the release of its H1 trading update, JD Wetherspoon hosted a conference call for analysts and our comments thereon are set out below: Company update: Recovery has been ‘slightly slower than they would have hoped’. Reiterated update then straight into Q&A: Questions: Revenues: Price vs volume? Co will not give details. Both will have contributed. But price > volume. This is common across the sector. Indeed many companies, perhaps most, are in volume decline. Co pushed on this a little. It says it is passing on some price. Rail strikes’ impact? The Co ‘has not broken this out’. Competitors: Supermarket pricing. This has remained aggressive on alcohol, even as food prices have risen. Co will have ‘picked up some trade from competitors & lost some to supermarkets’. See also ‘pricing vs peers’ below. Are older customers coming back? Some of the traditional products, real ales & breakfasts, are still below pre-Covid. But there… • 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: Delivery: Foodservice analyst Peter Backman looks at delivery and sums up the situation succinctly when he says ‘the problem with restaurant delivery (and many other forms of delivery) is that it isn’t profitable…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Food inflation: UKH has commented on the news yesterday from the DGA Prestige Foodservice Price Index that food and drink inflation for food service businesses reached a record high of 24% in December 2022, saying ‘this level inflation puts the sector yet deeper into jeopardy.’ CEO Kate Nicholls says ‘it’s another in a series of price increase across all fronts of operations and businesses will have no choice but to pass it on to customers. That will make it harder for the Government to deliver on its key commitment to reduce inflation across the wider economy…’ Late Night Market: UKH has commented on ONS data showing that nightclubs, bars, restaurants and cafes are responsible for 42% of customer spend after 6pm, saying ‘the figures show the sector remains a key employer, with 8.7 million people working at night, but the significant loss of workers over the past six years and the continued drain on turnover by the Late Night Levy is preventing venues taking advantage of high demand…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. CGA has separately reported that, in 2022, ‘almost 1 in 5 On Premise consumers said they visited Nightclubs, and although Casual Nightclubs proved more popular than the Premium alternatives, a higher percentage of consumers frequented Premium Nightclubs on a weekly basis compared to Casual Nightclubs…’ Working from Home: This is lingering. Springboard reports that high street stores are emptier than they were pre-pandemic between Mondays and Fridays, particularly around offices. It says footfall in high street shops is down over 18pc on 2019 levels on weekdays, but it is down less than 12% at weekends. Demographics & Geography: IPPR North has reported that, if the north of England were a country, only Greece would be more lowly rated in terms of investment. IPPR North says political leaders should learn from other countries, saying ‘our leaders need to think big and look beyond our borders for inspiration.’ Other news: UKH CEO Kate Nicholls has told the Master Innholders Leadership Conference in London that hoteliers – and the UK inbound tourism market in general – have reasons to be optimistic for later this year. She says that debt is a problem but that interest rates should top out shortly. She adds ‘there are early signs that we may be over the worst…’ COMPANY NEWS: Diageo has reported H1 numbers saying that the group has ‘reported net sales of £9.4 billion, increased 18.4%, primarily reflecting strong organic net sales growth as well as favourable impacts from foreign exchange, mainly due to the strengthening of the US dollar.’ It adds that ‘organic net sales grew 9.4%, with growth in all regions. Price/mix of 7.6 percentage points reflects a high single-digit price contribution to net sales growth, premiumisation and organic volume growth of 1.8%.’ DGE says ‘reported operating profit grew 15.2% to £3.2 billion. Reported operating margin declined by 92bps, with organic margin expansion more than offset by exceptional operating items and foreign exchange.’ It adds that ‘price increases and supply productivity savings more than offset the impact of absolute cost inflation on gross margin…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Britvic has updated on Q1 trading to end-December saying that it has had a ‘robust start to the year’ and that trading is in line with expectations. The company says ‘in the first quarter, Group revenue increased 7.3% to £411m on a constant currency basis (reported +9.9%) versus last year and was in-line with management expectations… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Fever-Tree has updated on trading for the year ending 31st December 2022 and has warned on the impact of rising glass prices. The company says that revenues rose by 11% to £344.3m… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Time Out Group has announced that it has entered into a lease agreement with Klépierre Real Estate España to open a new Time Out Market in Barcelona… Junkyard Golf Club is reported to be exploring funding options. Propel reports it is planning Birmingham and Vegas sites ahead of modest UK growth and aggressive US expansion:.. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Amazon workers in Coventry went on strike yesterday over pay in the first formal industrial action that the company has faced in the UK. HOLIDAYS & LEISURE TRAVEL: Jet2 has updated on trading, commenting on the first 9mths of its year to 31 March 2023 and saying that ‘pleasingly, Winter 2022/23 forward bookings have continued to strengthen throughout December 2022 and January 2023. Consequently, average load factors are now slightly ahead of Winter 2018/19 at the same point… The company says ‘given these positive indicators, the Board now expects to exceed current average market expectations and report a Group profit before foreign exchange revaluation and taxation for the year ending 31 March 2023 of between £370m and £385m… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Hotelier PPHE has updated on full year trading with CEO Boris Ivesha saying ‘we are delighted with PPHE’s outperformance in 2022. Our rate-led strategy, prime locations and highly appealing brands have continued to support our strong recovery post-pandemic, with each quarter improving on the last…’ Hyatt Hotels has announced that it is to open the first Destination by Hyatt brand in the United Kingdom with SCHLOSS Roxburghe. OTHER LEISURE: Rank Group has reported H1 numbers saying that underlying net gaming revenue was up 2% at £337.4m. The company says that underlying losses per share should be around 0.8p (FY22 – earnings of 2.8p). Re current trading, Rank reports ‘we experienced strong Christmas and New Year trading and, whilst this has continued into the first three weeks of January 2023, we recognise that the cost-of-living pressures are likely to continue to have an effect on our UK venues’ customers over the coming months….’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Playtech has updated on full year trading saying ‘since H1 2022 interim results were announced on 22 September 2022, the Company has continued to perform strongly and, as a result, adjusted EBITDA (unaudited) for the full year is expected to be at least €400m (+26% versus FY 2021). The company adds that it will host a B2B investor day on 23 March, the day that it announces its final results. Google is reportedly being sued by the US government, which is seeking to break up the company’s advertising business. The complaint filed by the Department of Justice alleges that ‘Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.’ Some Microsoft services, including Teams and Outlook, went down for some users yesterday. Touch Games has been fined £6.1m for “social responsibility and money laundering failings…” Donald Trump is to be allowed back onto the Facebook and Instagram platforms after a two year ban. Tesla has cut new car prices to spur demand. Elon Musk says ‘price really matters.’ He adds ‘we think demand will be good despite, probably, a contraction in the automotive market as a whole.’ FINANCE & MARKETS: The OBR is reported by The Times to have informed chancellor Jeremy Hunt that the outturn for the UK economy this year will be worse than it previously guided. The OBR had forecast shrinkage in GDP of 1.4% this year, but The Times now understands it is looking to reduce this figure by between 0.2 and 0.5% due to further economic weakness. The Telegraph reports that house sale volumes could fall sharply this year. It quotes estate agent Chestertons as saying ‘despite the uplift in viewings and new properties coming onto the market in December, we have noticed that there are fewer people looking to sell in the first part of this year, with many preferring to wait and observe how the market develops.’ The Telegraph reports that the chairman of Marks & Spencer, former Tory MP Archie Norman, has called plans to ease post-Brexit trade “baffling” and “overbearing”. It says this comes on the back Dyson founder Sir James Dyson’s comments last week that the Government was “stupid” in its economic approach… The Federation of Small Businesses has reported that confidence across its members fell again in Q4 last year. It said the sharp drop-off in confidence is “incredibly worrying”. The headline confidence reading in the FSB’s small business index, which polled more than 1,000 companies, fell to minus 46 in Q4 from minus 36 in the autumn. UK car production hit a 66yr low last year on the back of supply problems and Brexit red tape. Production fell 10% from 2021, which was itself a historic low. Sterling higher at $1.2391 and €1.1353. Oil down at $86.19. UK 10yr gilt yield off 2bps at 3.27%. World markets mixed yesterday. London due to open around 30pts higher 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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