Wahaca, JDW, Amber Taverns, JW Lees, Entain, costs, trends & other:

A DAY IN THE LIFE:

Genuine question but why do people say ‘more than’ rather than ‘over’?

Because it’s often ‘more than 100’ or, my particular favourite, ‘more than a very specific number like 103’ rather than ‘over 100’ or, if you must, ‘over 103’.

And why not cut yourself a bit of slack, trot out that old favourite ‘about’?

Because ‘about 100’ allows for anything between about (circa, if you insist) 96 and 105. It’s less prone to error than ‘more than 100.’ There are fewer hostages to fortune and it’s less wordy.

Or so says the man who has just spent more than 88 words nit-picking and hair-splitting. On to the news:

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PUBS & RESTAURANTS:

Price v quality including quality of service.

It’s possible for budget and top end hospitality operators to exist almost side by side. They plough different furrows and an attempt to do otherwise runs a number of risks. Price may not be the issue in some cases whilst, in others, operators insist on hitting every button, including price…

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Costs:

Fees of up to £145 per shipment will be payable on food imports from the EU due to additional Brexit costs. DEFRA says the fees will come in from the end of this month. The Cold Chain Federation has said that the new charges will need to be passed on to customers. The government says the money will go towards additional border costs…

COMPANY NEWS:

J D Wetherspoon is investing c£2.5m to open a new pub  this summer named The Lion and the Unicorn at The Sidings Waterloo Station. Wetherspoon chairman Tim Martin expressed anticipation for the pub’s opening, expecting it to appeal to a wide audience, while LCR’s asset management director, Sian Evans, foresees it enhancing The Sidings’ status as a premier leisure destination in London….

Oaxaca Ltd (Wahaca) has recently reported its FY numbers for the year ended 25 June 2023 to Companies House. The principal activity of the company is the operation of Mexican restaurants in the UK. The immediate parent company of Wahaca is Yellowwoods Treasury 2 SAR, with the ultimate parent company being L Perlman SECS in Luxembourg.

During the period, revenue increased marginally and the company fell into an operating loss as inflationary headwinds arose and prior year reduced-VAT benefits ended. Revenue marginally increased by 1.3% YoY to £39.7m. Gross profit fell by 9.8% to £18.0m as inflationary headwinds took hold, reducing gross profit margins to 45.3% from 50.9% the year prior. Margins fell as a result of the reduced VAT rate coming to an end, which had boosted the prior year’s gross profit margin.

Wahaca posted an operating loss of £46k for the period, down from a profit of £3.6m. The previous period benefited from £165k of insurance recoveries and government grants related to the pandemic. This reduced to zero in the reported period….

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Amber Taverns has announced record turnover of £110.4m for the year ended 4 February 2024, marking a 15% increase YoY, with EBITDA exceeding £25m, up from £22.4m….

The Breakfast Club has reported that it has overcome challenges in the supply chain and utility pricing to deliver ‘significant improvement’ in its financial performance over the last 18 months….

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JW Lees has reported record sales for FY24 despite the cost of living crisis. William Lees Jones writes on Twitter that ‘it’s tough running pubs. Costs are through the roof. Even more so with business rates and wages this week. But people love beer and pubs and JW Lees Brewery just closed off 2024 with record sales of £94.3m, up 10% on 2023.’ Mr Lees Jones says ‘we go again with 2025.’

Asda has reported sales up just 0.8% in the last 12 weeks as it falls further behind rivals post its debt-financed purchase.

Just Drinks reported sparkling wine supplier Nyetimber has made a bid to acquire The Lakes Distillery, a UK-based whisky and gin maker, for £71m, including debt. The offer, supported by The Lakes Distillery’s board, highlights the potential for growth in the UK single-malt whisky market, valuing the company’s share capital at around £46.1m.

MEGATRENDS

Megatrends are often mentioned by people who are trying to sell you something, be it uranium futures, gold, platinum or solid-state batteries. But we’re not selling anything specific. Rather, with looking through the noise becoming a greater challenge, we’re just trying to identify trends that have been in place for some time or / and look set to remain with us likewise.

Headings include:

• Seeing through the noise:

• Current megatrends:

• Interest rates are back to where they ‘should’ be, i.e. they won’t fall much:

• The cost of living crisis hasn’t gone away:

• Helicopter money isn’t real money:

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HOLIDAYS, HOTELS & LEISURE TRAVEL:

The government has delayed for a second time the deadline for airports to install security scanners allowing passengers to carry liquids in their hand luggage.

Airline numbers suggest that volumes continue to build back towards pre-Covid levels. In March, Ryanair passenger numbers increased by 8% YoY, reaching 13.6 million and operating over 77,000 flights last month at a load factor of 93%, unchanged YoY.

Wizz Air March passenger numbers increased by 12% YoY to almost 4.8 million but saw its load factor fall by 1.3 percentage points YoY to 90.8%.

In 2023, Virgin Atlantic reported record revenues and reduced losses, driven by a strong demand for premium leisure air travel, while corporate travel recovery remained slower….

OTHER LEISURE:

Gambling company Entain plc has announced that chairman Barry Gibson is to retire and will step down by the end of September 2024 ‘and potentially earlier depending on the timing of the appointment of a permanent CEO’.  The company reports that ‘the search for a permanent CEO is ongoing and is progressing well’. Entain says ‘Stella David will become Chair on Barry’s retirement’. Ms David is currently interim CEO.

Disney shareholder Nelson Peltz has lost his second bid to win a seat on the Disney board. Peltz’s investment vehicle owns a £2.7bn stake in Disney.

The FT reports that Google is considering charging for premium content generated by artificial intelligence on its otherwise free searches.

Amazon has announced that it will cut job in its cloud computing business. A spokesperson told the BBC ‘these decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers.’

FINANCE & MARKETS:

The S&P Services PMI is released at 9.30am BST. .

Inflation in the eurozone fell to 2.4 per cent in March, the lowest level in over two years. The fall was a little larger than expected. The March CPI is announced for the UK on 14 April.

Sterling mixed at $1.2653 and €1.1667. Oil up at $89.60. UK 10yr gilt yield down 1bp at 4.08%. World markets mixed yesterday & London set to open up around 10 points as at 6.30am.

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