Langton Capital – 2023-04-20 – Deliveroo, Rank Group, DP Poland, Jet2, inflation, labour & other:
Deliveroo, Rank Group, DP Poland, Jet2, inflation, labour & other:A DAY IN THE LIFE: I’ve decided that the canyons of the City are windy and sunless. The latter unless you wait until the middle of the day and stand in the middle of the road, that is. And that’s not to be recommended because, if the kebab delivery riders haven’t already mown you down on the pavement, the cab drivers will certainly do so in the roads and human vs cab tends to have a predictable outcome. Anyway, so speaks a man who, rather hopefully and somewhat naively, didn’t bring a coat down to London this week and has consequently spent a few days being blown around at a sub-optimal temperature. Anyway, the week is edging towards a conclusion so let’s move 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 are £395 for one subscription, £695 for multiple, £995 for very large subscribers, all plus VAT. Or sign up for easy in, easy out monthly option per subscriber HERE https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN DELIVEROO Q1 UPDATE: Deliveroo has this morning updated on Q1 trading and our comments are set out below: Headline numbers: ROO reports that Q1 trading is in line with guidance. It says revenue is ‘up 4% and gross transaction value (GTV) down 1% year-on-year (both in constant currency), with growth improving through the quarter.’ Group revenue is £512m against £479m last year with GTV of £1,746m, up 2%. CEO comment: CEO Will Shu comments that ‘revenue growth of 4% and broadly flat GTV (both in constant currency) represents a resilient performance, particularly in the context of inflationary pressures and the ongoing cost of living crisis and against a challenging comparison base.’ The CEO concludes ‘we remain confident in our ability to deliver on our plans to drive profitable growth and sustainable cash generation.’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. JUST EAT Q1 CONFERENCE CALL: Following the release of its Q1 update, Just Eat Takeaway hosted a brief conference call for analysts and our comments thereon update are set out below: The numbers: Q1 was up against tough comps. The company says that the difference between this year and last year continues to narrow. Operational improvements are ‘ahead of plan’. Whilst the company will generate positive adjusted EBITDA in FY23, it will still suffer around a €200m cash outflow. Outlook: The given GTV range of -4% to +2% appears rather wide. Inflation is unknown at this stage & this impacts nominal if not real revenues. Exchange rates… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. PUBS & RESTAURANTS: Inflation: This was the big noise yesterday. Headline inflation is down a little but fell to only 10.1% in the year to March (up 10.4% in the year to February) against estimates of a sub-10% number. And food prices, which are now rising at the fastest rate in 45 years, were up very sharply. This has the makings of the ‘wrong sort of inflation’ as it impacts input costs for operators and ensures that all consumers, but particularly less well-off demographics, will have less money to spend on discretionary goods and services… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Energy costs: The BBPA has accused Ofgem of moving at a “glacial pace” when it comes to obliging suppliers to reduce energy prices. It says that the lack of urgency is putting thousands of businesses at risk of collapse… Consumer confidence. Running against a number of other polls that have been undertaken recently, YouGov and the CEBR suggest that ‘consumer confidence fell in March, with the most serious declines seen in short-term job security and business activity.’ The survey ‘registered a one-point drop in consumer confidence from 100.4 to 99.4, the first decline seen in YouGov and the CEBR’s consumer confidence index since October 2022….’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. But business confidence has picked up reports the Institute of Chartered Accountants in England and Wales. It says that business sentiment rose to positive 2.5 in Q1 this year from minus 23.4 at the end of last year… Trade: Lumina Intelligence reports that eating and drinking out occasions in the on-trade, basically footfall, saw year-on-year decline in the four weeks to 19 March 2023… IWSR Drinks Market Analysis has reported that alcohol spend is falling in a number of major markets around the world… COMPANY NEWS: DP Poland has updated on Q1 trading saying that LFL System Sales in Poland increased by 19.4% in Q1 2023 compared to Q1 2022, ‘benefitting from a satisfactory split between higher average ticket price and increased order count.’ In Croatia, the company says that ‘like for like System Sales increased in Q1 2023 by 15.7% compared to Q1 2022…. • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. M&B is set to buy the remaining 60% stake in Ego Restaurants that it does not already own. The transaction should close in June. M&B CEO Phil Urban says ‘James [Horler] and his team have built a strong business, with a strong culture, delivering impressive results…’ Sky News reports that a number of PE firms are considering a joint bid for Subway. It says it has ‘learnt that Advent International, Bain Capital and TPG are considering teaming up in a so-called “club deal” as the auction of Subway nears the conclusion of a second round of bidding….’ Investor group ShareAction has called on Nestle to cut the proportion of unhealthy food it sells. Nestle’s AGM is to be held today. Shareaction says ‘Nestle has said it wants to sell healthier food, but it hasn’t given assurances that it will also address its less healthy food sales, which is essential to turn the tide against the harmful effects of diet-related ill health.’ Bean Coffee is reported to have appointed leisure agents Stärka in preparation for its national rollout. The operator currently has 20 retail and office locations in the Northwest. The Wolseley Hospitality Group has opened its first overseas site in the Thai capital, Bangkok. Shake Shack is to open in Tel Aviv in 2024. Level Tap, an eSports venue, is set to open in Liverpool. Popeyes chicken has announced the proposed opening of a further four UK sites in Richmond, Woolwich, and Kilburn, with a delivery kitchen set to open in Wood Green. HOLIDAYS & LEISURE TRAVEL: Jet2 has updated on trading for the year to March 2023, saying that ‘following the trading update in late January 2023, the Board now expects to report a Group profit before foreign exchange revaluation and taxation for the year ended 31 March 2023 of between £387m and £392m. Total cash at 31 March 2023 was £2.62bn with an ‘Own Cash’ balance (excluding customer advance deposits) of £1.12bn.’ The company comments on FY24….’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Travel agency Kilroy has said that younger would-be travellers remain keen to spend… Heathrow Airport is set to appeal the Civil Aviation Authority’s decision on how much it can charge passengers up to December 2026. Analytics firm Cirium reports that the level of flight cancellations is running some 39% ahead of pre-Covid levels… OTHER LEISURE: Rank group has updated on trading for its Q3 to end-March saying that group revenues rose by 13% to £174.4m. The company reports … • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Podcaster Audioboom yesterday reported Q1 revenues of US$15.4m, down from $19.5m in the same period last year… Tesla has said that the prices of its vehicles will continue to evolve. It is suggesting that further price cuts are possible. Elon Musk tweeted ‘we’re not ‘starting a price war’, we’re just lowering prices to enable affordability at scale.’ Instagram, which is owned by Meta Platforms, is reported set to cut a number of jobs and it may move some roles out of the UK. FINANCE & MARKETS: Inflation in the UK (see also Pubs & Restaurants above) remains markedly higher than other countries. The UK has just reported 10.1%. This compares with 7.8% in Germany, 6.6% in France and 5.3% in the US. May UK rate rise nailed on. Betting on a further 25bp rate rise next month is running around 80-20 in favour. The FT report data provider LonRes as saying that central London property prices fell around 5% in the year to March. This is the largest annual fall in three and a half years and, taking into account inflation over the period, amounts to around a 15% drop in prices in real terms. The CEBR has reported that ‘the hit to the economy from strikes is lower than originally feared.’ It says the impact of industrial action on GDP between June last year and the end of April is estimated to be £1.4 billion, or £127 million per month. It had previously estimated around £188m per month. Sterling up at $1.2425 and €1.134. Oil lower at $82.20. UK 10yr gilt yield up 10bps at 3.85%. World markets mixed yesterday and London set to open down around 3pts as at 6.30am. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. |
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