Busts, accommodation costs, strikes, D&D, Saga, G4m, inflation & other:

A DAY IN THE LIFE:

In an email to clients today we look at acquisitions and their possible correlation with business failures.

Causality may be more debatable – and the direction of causation may be even more so – but there are grounds to suggest that aggressive, swashbuckling behaviour is not necessarily always good for a corporation’s financial health.

And the lexicon used to describe deals can be interesting. We would suggest there are a lot of words that are used as synonyms for ‘dangerous’. For example:

• Transformational.

• Ground-breaking.

• Leveraged.

Words for ‘quite dangerous’ include ‘innovative’ and the rest, all of which does remind me that I should dig out the presser associated with the hubristic 10 January 2000 merger of Time Warner and AOL, which was described, ten days into the new millennium, as ‘The Deal of the Century’.

Well, in a way, it was, because, in 2002, the combined entity reported a loss of nearly $100 billion. Broadband killed dial-up and everything that could go wrong, did go wrong.

Anyway, faint heart never won fair maiden except, of course, that it often did. On to the news:

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PUBS & RESTAURANTS:

Cost of living – accommodation costs:

The cost of living crisis worsens as a typical two-year fixed mortgage deal has surpassed 6% for the first time since December….

Prime Minister Rishi Sunak has ruled out direct help to struggling mortgage holders, saying the government needed to ‘stick to the plan’ to halve inflation by the end of the year….

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The BBC reports that ‘the average UK tenant now spends more than 28% of their pay before tax on rent.’ It quotes Zoopla as saying that people are spending more of their wages on rent than at any other time in the last 10 years…

Cost of living – supermarket price cuts:

Morrison’s is starting its sixth round of price cuts since January, including picnic items as a spokesperson for the company said it wants to ‘help our customers make the most of the warm weather…’

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The BBC reports that others are following suit. It says ‘Morrisons and M&S have become the latest supermarkets to cut the price of basics as retailers face pressure to do more to tackle soaring living costs….’

Inflation:

Regarding inflation, the Guardian reports there will be a special ‘Brexit tax’ for UK companies that import food products from the EU….

Former governor of the Bank of England Mark Carney has said that Brexit is largely to blame for the UK’s inflation rate remaining above those of other developed economies….

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Plant-based foods:

Foodservice analyst Peter Backman comments on the plant-based foods market and concludes that it may be a little early to say that the bubble has altogether burst…

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Other news:

Closures: Accountancy firm Price Bailey has reported that 200 pubs shut in the first quarter of this year. It says 620 pubs in the country entered insolvency in the past 12 months, up 68% on the prior 12 month period…

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Train strikes. Train drivers’ union ASLEF is to impose a week-long overtime ban at the start of July, which will likely disrupt services. There may be some relief that the union has stopped short of calling fresh strikes…

Springboard reports that high street footfall increased by 5.3% YoY for the week ending 17 June, with the bounce-back being attributed to sunny weather.

LS1 Sherwood Street Ltd proposed development of four new venues at Piccadilly Circus have been approved…

COMPANY NEWS:

D&D London is reported to have appointed advisors to explore raising new finance. Its backer, LDC, is said to have exited the business….

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Azzurri Group has acquired a controlling stake in Boojum, an Ireland-based Mexican fast casual dining chain, from Renatus Capital Partners for an undisclosed sum. Azzurri Group plans to open the chain’s first British location before Christmas.

Junkyard Golf is reported to have invested £2.7m to open a unit in London’s Camden in August. The business also plans to launch in the USA.

Wilko is reported set to bring in restructuring advisor Teneo in a move that could lead to a CVA of the business. The Times reports sources as saying that the retailer will soon run out of funds and could collapse into administration.

MusicMagpie yesterday reported H1 numbers saying that turnover fell to £62million for the six months ending May, from £71million in the same period the previous year.

Fat Hippo will open its George Street, Edinburgh restaurant on 7 July, with the venue offering a full menu of their signature beef and buttermilk chicken burgers, which come with free hand-cut chips as standard.

HOLIDAYS & LEISURE TRAVEL:

Saga has updated on trading for the period from end-Jan to 19 June saying that the company has continued to build on the positive momentum in its Cruise & Travel operations…

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Sky reports that Aermont, owner of Pinewood film studios, is expected to bid for Center Parcs. Tuesday is the deadline for initial bids, with early speculation suggesting the upmarket chain of holiday villages could cost a buyer more than £4bn.

Christie & Co are seeking a purchaser for the freehold interest of Lomond Hills Hotel, a former hotel with leisure club in Fife.

OTHER LEISURE:

Gear4Music has reported full year numbers to 31 March saying that revenue rose to £152m from £148m with EBITDA of £7.4m against £11.2m in the prior year…

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Culture club singer Boy George and the group’s bassist Michael Craig have been given more time to try and avoid a bankruptcy bid brought against them by former bandmate Jon Moss over a £1.75 million debt from a legal dispute.

Prince Harry and Meghan, Duchess of Sussex have been called ‘grifters’ by Spotify’s head of podcast innovation and monetisation, Bill Simmons. The couple signed a $20m deal with Spotify in 2020, with their Archetypes podcast coming to an end after just 12 episodes.

Peloton Interactive UK has reported numbers saying that revenue had fallen to £127.8m in the year to 30 June 2022, down from £147m in the 12 months before….

FINANCE & MARKETS:

Data from On The Market suggests that houses are taking longer to sell and sellers are being obliged to cut asking prices….

The Times reports the delay in the IPO of Zopa is due to the UK markets suffering from a “temporary closure”. It quotes boss Jaidev Janardana as saying the company was likely to go public “at the back end of next year” or even later.

Sterling weaker at $1.2777 and €1.1705. Oil up at $75.84. UK 10 year gilt yield up 8bp at 4.49%. Daily Mail says traders ‘bet interest rates will be 6% by Christmas’. Markets weaker yesterday and London set to open down around 6pts as at 6.30am.

RETAIL WITH NICK BUBB:

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