Langton Capital – 2023-04-26 – Whitbread call, McDonald’s, RTN, Nichols, Pepsi, Spotify, delivery etc.:
Whitbread call, McDonald’s, RTN, Nichols, Pepsi, Spotify, delivery etc.:Whitbread call, McDonald’s, RTN, Nichols, Pepsi, Spotify, delivery etc.: A DAY IN THE LIFE: Knocking off a few relatively short books in order to say that I’ve read (or recently re-read) them, I got around to Machiavelli’s The Prince last week and, apart from the well-known stuff (it’s better to be feared than loved’ etc), there are some other interesting truisms. He puts the Papacy in an interesting light, for example and, when he makes the point that ‘everyone knows what you seem like but very few people know what you are really like’, he could have had any one of a number of modern politicians in mind. Warmongers who dodged the draft, bed-hopping moral campaigners and others but, I can’t help thinking, when he said you should appear truthful, honest and kind – but you don’t have to actually be any of those things – he set us off on the wrong foot. Hitchhikers’ Guide now and probably The Art of War next. 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 WHITBREAD – FINAL RESULTS: Following the release of its FY numbers, Whitbread hosted a conference call for analysts and our comments thereon are set out below. Trading: Current trading has been ‘very strong’. F&B – could you do things differently? Co reiterates food is an important part of the offer. But yes, there are opportunities for ‘fine tuning’. F&B currently has ‘recovery tailwinds’ in its favour. The co will not split out F&B profitability from rooms. Indeed, this may not be possible. Germany. He ‘believes in the structural story’. The region will get to cash flow break even in 2024. Will then push on to 14% return on capital. Recent acquisition, six hotels, 900 rooms, £26m. Nice fit. Mix of organic builds and estate purchases. They need to be complementary. There may be more opportunities. Freehold in… • 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: Delivery: Sales down, orders even more so. CGA reports that ‘delivery and takeaway sales at Britain’s top managed restaurant groups in March were 3.0% below the same month in 2022.’ It adds that year-on-year sales have now fallen for 16 months in a row… • 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. Delivery. Ocado is to cease operations at its Hatfield fulfilment centre later this year. Some 2,300 jobs will be at risk. Ocado is using robots in some locations. Boss Tim Steiner said that the company is considering “future options for the site”. The consumer: Bank of England economist Huw Pill has said that, post Brexit, Covid and other shocks, people in the UK need to accept that they are poorer. He says if they continue pushing for pay rises (or for price rises in order to protect margins if they run a business), then this will just lead to more inflation… • 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. Access to labour: The BCC has said that hospitality and manufacturing are the two sectors facing the most significant problems when it comes to recruitment… Calls for VAT cut: Perhaps unsurprisingly, some 44% of the 143 respondents who commented on a snap poll conducted by the Morning Advertiser have said that they would welcome a VAT cut and believe it could help prevent further closures… • 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. Inflation. The Kantar Worldpanel has said that the grocery inflation rate has eased a little but adds that it is not yet sure that prices have peaked. It says the annual pace of grocery price growth was 17.3% this month, down from a record 17.5% last month… Despite calls from central bankers not to push through price rises, that is exactly what is happening. Hospitality has little choice other than to charge more and yesterday global food company Nestle, which has been accused of shrinkflation, said that volumes were down but price rises meant that sales were up. Pret a Manger has put up the price of its subscription scheme by 20pc to £30 per month as it faces continued rises in costs. The subscription allows members up to five coffees a day. Pret will also give members a 10% discount on food… COMPANY NEWS: Restaurant Group under fire. 12.3% RTN shareholder Oasis Management has called on shareholders to reject the remuneration report at this year’s AGM on 23 May. It says that there is a continued ‘misalignment between pay and Company performance.’ Oasis says RTN shares are down by 73% since Andy Hornby became CEO and yet his pay sits at over £600,000 before bonuses & options. Oasis says the remuneration policy is not in shareholders’ best interests… • 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. for the first quarter ended March 31, 2023. It says that, unlike for many of its competitors, this was driven by both traffic growth and menu pricing…. • 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. Nichols updates on trading for its calendar year to date. It sees sales up but out of home consumption sales in decline due to cost of living pressures. The company says that group revenue for the period increased by 4.2% year-on-year to £41.2m. it says ‘this positive performance reflected good progress in the Group’s Packaged business, which saw revenues increase by 7.7% to £32.0m….’ • 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. PepsiCo yesterday announced Q1 revenues of $17.85bn (against estimates of $17.22bn) and EPS of 150c vs estimates of 139c. Shares rose around 2% to hit a one-year high. Drink volumes were up 1% whilst food volumes were down 3%. Surrey-based Hogs Back Brewery reports that demand for its cask ales from the on-trade ‘is nudging close to pre-Covid levels’. It says it has secured ‘listings with a number of pub operators for its established cask brands and new additions’. The brewer estimates it will have increased its on-trade outlets by around 250 by this summer, compared to the same period last year. The founders of Planet Organic have bought the chain back out of administration. Advisors Interpath say ‘after a competitive process, we’re delighted to have concluded this transaction which will see the Planet Organic name continue to trade and, importantly, protects a large number of jobs.’ The Pub People Company is reported to be targeting the acquisition of up to 60 freehold venues across the East Midlands, Lincolnshire and Yorkshire. Socially conscious beer brand Big Hug Brewing has partnered with leading pub company and brewer Greene King on the launch of a collaboration version of their Pave The Way (4.6%) pale ale for its seasonal cask calendar. The Pave The Way ale aims to raise funds and awareness for industry charity Only A Pavement Away, this summer. HOLIDAYS & LEISURE TRAVEL: Whitbread shares rose around 4.25% as the market digested its full year results to end-February. Monthly data from the Nationwide suggests that spending on flights, travel and holidays continues to grow faster than other sectors. This may be reflective of the fact that it was not allowed during lockdowns… Bloomberg News reports that the UK is seeking to reach an agreement for British passport holders to use e-gates when travelling though EU airports. OTHER LEISURE: Spotify yesterday reported Q1 numbers saying that it had 515 million monthly active users, up some 5% on Q4 last year and up 22% on the same quarter last year. Advertising income was up 17% year on year but down 27% on Q4 last year. Operating losses fell from €231m in Q4 last year to €156m). Alphabet reported Q1 numbers yesterday with revenue of $69.8bn, up 3% year-over-year. This was above expectations and the shares rose by around 3% in after-hours trading. FINANCE & MARKETS: The government borrowed some £21.5bn last month to plug the hole in its finances as a result of spending exceeding income. The total borrowing figure for the year, at some £139.2bn in the year to 31 March, was nonetheless a little below estimates. Sterling mixed at $1.2418 and €1.1312. Oil lower at $81.16. UK 10yr gilt yield down 9bps at 3.69%. World markets mixed yesterday & London set to open down around 27pts 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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