SSP Group, WTB, McDonald’s, Prezzo, Punch, corporate distress & other:

A DAY IN THE LIFE:

Well, the sun is shining and it’s a Bank Holiday weekend and, if it wasn’t for the nail-biting football situation, there would be plenty to look forward to.

Drilling into the small print reveals the fact, or at least the forecast, that it was reportedly 24 degrees yesterday and will only be ten degrees over the weekend, which slightly takes the shine off it.

At least it won’t be raining but the not-so Mighty Hull City has been a black-cloud manufacturing machine of late and the team’s fate is not entirely in its own hands.

We could win and go down tomorrow or draw and stay up, depending on results elsewhere and the chance of ignominy and a spell in Division One is a very real one.

Still, have a good one and let’s move on to the news:

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PUBS & RESTAURANTS:

Corporate distress:

Restructuring accountant Begbies Traynor has released its latest Red Flag Alert report (for Q1 2025) saying that ‘the number of businesses in ‘critical’ financial distress rose 13.1% year-on-year in Q1 2025.’ The number is down 3.1% on Q4 last year but a successful Christmas could have a lot to do with what may be little more than a modest seasonal improvement. Begbies reports that ‘consumer-facing industries – Bars & Restaurants (+31.2%) and Travel & Tourism (+25.5%)  experienced the greatest increase in ‘critical’ financial distress over the last 12 months….’

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COMPANY NEWS:

The FT reports that investor Irenic Capital Management, which has around a 2% stake in SSP Group, it to ‘push the Upper Crust owner to boost its profitability, setting the stage for a private equity takeover….’

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McDonald yesterday reported Q1 numbers saying that US LFL sales fell by 3.6%. The company reports global LFL sales down by a lesser 1%. Overall revenue fell 3% to $5.96bn, below the $6.12bn estimate by analysts. Net income also missed expectations at $1.87bn, down 3% from last year….

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Also in the US, Shake Shack has announced Q1 numbers saying that revenue was up 10.5% at $320.9 million with system-wide sales of $489.4 million, up 10.4% versus 2024. LFL sales are up by 0.2%. Net income was $4.5 million versus $2.2 million in 2024.

Brighton Pier’s shares are set to be delisted today.

Moët Hennessy, part of LVMH, is reported set to cut around 10 per cent of its workforce in order to take it back to 2019 levels. The company currently employs around 9,400 people and it is looking to reduce this by as many as 1,200. The FT reports the company as saying ‘this was an organisation that was built for a much larger size of business.’ It says this rebuilding of sales ‘is not going to happen anytime soon.’

Punch Pubs & Co reports that it ‘has added to its growing portfolio with the acquisition of the Duke of Wellington pub in Wareham.’ The unit will be ‘welcomed into Punch’s leased and tenanted estate.’

Prezzo has revealed its new name, Prezzo Italian…

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Chinese coffee shop chain Luckin Coffee Inc. has reported Q1 2025 numbers saying that net revenue was US$1.22 billion, up 41.2 per cent on last year. The company averaged some 74.3 million customers a month over the quarter….

WHITBREAD – FULL YEAR CONFERENCE CALL:

Following the release of its FY numbers, Whitbread hosted a conference call for analysts and our comments thereon are set out below.

Introductory comments: Demand ‘has been somewhat softer in the UK’. But cost base has been reduced and progress in Germany has been ‘excellent’. Re current trading, demand is still below last year (albeit distorted by Easter). The company performed ‘ahead of the market’ but the UK economic outlook ‘remains uncertain’. Germany REVPAR growth has ‘remained in double digits positive’. The company maintains that much of its performance going forward will be achieved even if the market is not ‘super strong’.

Premier Inn UK: Room growth, have targets slipped? Co is ‘still confident with the 98k room UK target for FY30’. Says ‘has line of sight on all but 2k of these rooms’. This ‘will involve an acceleration’. Some delays on contract signing (still) post Covid. German targets unchanged with a pipeline of 7k rooms. Undated UK target of around 125k in UK & Ireland……

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HOLIDAYS & LEISURE TRAVEL:

IATA reports that global air passenger demand rose by 3.3 per cent in March in terms of revenue passenger kilometres. It says that capacity rose by 5.3 per cent and load factors slipped to 80.7 per cent as a result….

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Airbnb yesterday reported broadly in-line numbers for Q1. Revenue was $2.27bn (estimates were around $2.26bn) and EPS of 24c per share, in line with estimates.  The company is guiding to revenue of between $2.99 billion and $3.05 billion for Q2, a little behind estimates of $3.02 billion…

US giant Wyndham has reported Q1 REVPAR up 2% year on year with global openings of 15,000 rooms during the quarter.

OTHER LEISURE:

The Guardian reports that ‘the billionaire Coates family behind Bet365 are weighing up a sale of their online gambling empire that could value the business at £9bn.’ It says the company has ‘held talks with Wall Street banks and US advisers in recent weeks about a full or partial sale.’

MGM Resorts in the US has reported net revenue of $2.2 billion at its Las Vegas Strip properties in Q1, down $2.3 billion in the same quarter last year. The Super Bowl being was hosted in Las Vegas last year, making comparisons somewhat misleading.

Shares in Snap fell sharply yesterday as it dropped guidance in the wake of President Donald Trump’s tariff flip-flopping.

Tesla has now denied Wall Street Journal reports that its board had begun the search for a successor to current CEO Elon Musk.

Apple yesterday reported better than expected Q1 numbers saying that revenues came in at $95.4bn for the quarter, up 5 per cent year on year and slightly above consensus estimates of $94.6bn. The company reports net income of $24.8bn, also slightly ahead of estimates of $24.5bn and up 5 per cent on Q1 last year….

FINANCE & MARKETS:

The Japanese Central Bank has said that Donald Trump’s tariff confusion will reduce economic growth in Japan. It has cut its estimate for growth in the year to March 2026 to 0.5% from an earlier estimate of 1.1%.

In the UK, the Construction Products Association has forecast growth of 1.9% in UK construction output for 2025 and 3.7% in 2026.

S&P has released its April PMI numbers for the UK manufacturing sector saying that its measure rose slightly from 44.9 in March to 45.4 in April. Any number below 50.0 implies contraction…

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The Bank of England reports that mortgage borrowing in the UK rose sharply to its highest level in four years in March, as buyers moved to complete ahead of stamp duty threshold changes.

Sterling up at $1.3304 and €1.1776. Oil higher at $62.47. UK 10 year gilt yield up 4 basis points at 4.48%. World markets better yesterday and London set to open around 54 points higher as at 6.30am.

RETAIL WITH NICK BUBB:

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