Bids, food inflation, YO!, DAL, ENT, FDEV, CINE, GAW, GDP & other:

A DAY IN THE LIFE:

Since being cajoled into walking the dog most mornings when I’m up North, I’ve taken to checking out the flora by the roadside and in people’s gardens.

And very interesting it is too.

It changes week by week, it gives you ideas and, let’s face it, where else am I going to look at that time of the morning.

However, I have to say that, in a move suggesting hypocrisy is a well-watered plant our neck of the woods, if some suspicious-looking bloke with an ill-disciplined dog stood gawping into my garden at the crack of dawn, I’d be reaching for the pepper spray.

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

ASSET PRICES – WHO HAS GOT IT RIGHT?

Snowfox (Yo Sushi) yesterday sold for $621m. Fulham Shore is also under offer and Hong Kong property interests are reported to be raising money to invest in UK assets, including pubs. Below highlights from a note that went out to clients on Monday.

Introduction: Valuation theory would often have it that the value of a share should be the net present value of its future dividends. And that theory certainly has a place – but what about companies that currently do not pay a dividend? And what discount rate do you use? And some companies have cash piles that could easily be distributed and, as we comment below, how do you then differentiate between asset-rich and purely leasehold companies?

• 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:

Foodservice price inflation:

CGA and Prestige Purchasing have reported that foodservice price inflation jumped back above 20%, actually to 21.4%, in April. The report says ‘inflation dipped below 20% in March for the first time since mid-2022. However, the rebound in April underlines the severe cost pressures facing businesses throughout the foodservice sector at the moment…’

• 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.

Cost of living crisis:

Tenants’ squeeze. Savills claims that landlords are making their lowest profits for 16 years as interest rates rise, with many smaller buy-to-let investors near or at retirement age….

Potential:

UK Hospitality has said that the sector ‘could increase its direct contribution to the economy by £29 billion and create half a million new jobs by 20271, according to a new economic report’ produced by Ignite Economics. It says ‘employment in the sector has risen to 3.5 million, making hospitality the third largest employer in the country….’

Other news:

UKH chair. Managing Director of Hilton UK & Ireland, Steve Cassidy, will become the chair of UKHospitality…

Sustainability. Research from Nutritics and hospitality data and insights consultancy CGA by NIQ shows that 34% of UK pub and restaurant goers are willing to spend more than usual in venues with strong sustainability credentials….

Costs. Whilst inflation in the US eased back from 4.9% in the year to April to 4.0% in the year to May (with a 0.1% increase month-on-month in May), the index for the price of food eaten out of the home rose by 0.5% in May alone…

• 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.

COMPANY NEWS:

Yo! Sushi: The Snowfox Group, operator of YO! Sushi has been acquired by Japanese foodservice company Zensho Holdings, in a deal which values Snowfox at $621m….

The Food Hygiene Rating Scheme (FHRS) has awarded Wetherspoons with an average rating of 4.99 out of 5 for its 763 pubs in England, Wales and Northern Ireland….

• 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.

Mitchells & Butlers has  launched its new flexible working app M&B Flexible, allowing employees to work more convenient shifts by offering potential new team members the chance to pick their working hours, the type of role they would like to work in and the venue that they would like to work from.

Grubhub is to lay off 15% of its workforce, or about 400 people….

Brasserie Bar Co will rebrand as the Heartwood Collection  as it shifts its focus to becoming a freehold pub company, underpinned by a premium brasserie division. Heartwood Collection currently operates 20 premium pubs and 14 Brasserie Blanc restaurants. The group will focus on the acquisition of atmospheric freehold properties.

Pernod Ricard has taken a 14.2% stake in Auckland non-alcoholic drinks firm AF Drinks, for an undisclosed sum. The company creates drinks that mimic the taste of gin and vodka and expects the US to be its largest market by the end of the year.

World Coffee Portal reports that 200 Degrees managing director Stephen Fern said the business would open another three shops in the current financial year and already had two sites planned to open in 2025. The Nottingham-based coffee shop and roastery will open its 20th site in West Bridgford at the end of July.

HOLIDAYS & LEISURE TRAVEL:

Dalata Hotels has updated on Q2 trading saying ‘the Group has continued to trade strongly and expects Adjusted EBITDA to be in excess of €100 million for the six months ending 30th June 2023….’

• 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.

Air travel disruption is said to be behind a 174% increase in searches for caravan and lodge holidays in Cornwall on the same time last year…

Israel’s Central Bureau of Statistics reports that there were 376,400 tourist arrivals in May 2023, up from 262,000 in May 2022 – but still behind the 465,000 seen in May 2019. From January to May 2023, there were 1.76 million tourist arrivals, compared to just over two million between January and May 2019.

OTHER LEISURE:

Entain plc yesterday announced that it is launching a tender offer to acquire 100% of STS Holding S.A., the leading sports-betting operator in Poland, which is listed on the Warsaw Stock Exchange, for around £750m….

• 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.

Frontier Developments has this morning updated on full year trading saying that revenue should be ‘around £104 million, in-line with guidance provided in January 2023….’

• 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.

Cineworld’s London-listed holding company is reported to be preparing to file for administration as part of its financial restructuring. Shareholders are likely to be wiped out.

Games Workshop has updated on trading for its year to 28 May saying ‘we estimate the Group’s core revenue to be not less than £440 million (2021/22: £387 million) and licensing income of £25 million (2021/22: £28 million). The Group’s profit before tax is estimated to be not less than £170 million (2021/22: £157 million)….’

• 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.

FINANCE & MARKETS:

The ONS has updated on UK GDP saying that ‘monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in April 2023, after a fall of 0.3% in March 2023….’

• 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.

Stats from the ONS yesterday showed that UK wages are rising at their fastest rate in 20 years. Regular pay excluding bonuses rose by 7.2% in the 3mths to April, almost guaranteeing a 25bp hike in UK base rates next week….

The ONS has reported that the British economy has lost nearly 4 million working days to strikes since the start of last year.

Referring to ONS numbers on the jobs market, the CBI yesterday said ‘while the number of people in work is rising and unfilled vacancies are slowly falling, the difficulties companies face when hiring is still a hard brake on growth….’

The US yesterday reported its 11th straight reduction in inflation with prices rising in the 12mths to May by only 4.0%. This compares with estimates of 4.1% and an April number of 4.9%….

The United Nations Conference on Trade and Development shows that Britain’s export record is the worst in the G7 barring Japan as a result of trade barriers and red-tape. Stats show exports up only 6% between 2012 and 2021 compared with EU exports up over 29%.

Housing market. Builder Bellway yesterday reported a 25% drop in reservations in the four months to the start of June.

Bank of England Governor Andrew Bailey said yesterday that the UK labour market was ‘very tight’. He said that inflation was stickier than he had imagined and said that the Bank should learn from these mistakes….

Sterling up at $1.2611 and €1.1687.Oil price up at $74.45. UK 10yr gilt yield now 4.43%, up 9bps overnight. Markets mixed yesterday and London set to open down around 11pts.

The cost of UK government debt has now risen above Truss-era levels as the scale of the inflation problem facing the UK has become more apparent. The pound rose yesterday on hopes / fears of higher UK interest rates relative to most other developed countries.

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.