Everplay, PFD, Turtle Bay, Boxpark, Thwaites, licensing, brands & other:

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A DAY IN THE LIFE:

Provided you don’t have to labour outside, I think you get more work done in bad weather.

The theory being that you’re not missing much by being indoors but, as the sun didn’t shine much Up North yesterday and I still got zippo done, I’m wondering if the above comment is a rule or just an excuse.

Not that I think there’s much doubt that it’s just an excuse because it seems to me that when the sun’s shining, you can’t get down to mundane, paper based tasks because it’s shining and, when it isn’t, you CBA because it isn’t.

The first may be driven by envy and FOMO, of course, whilst the latter is powered by gloom and despondency but, whatever the genetics, like an ostrich and an emu, they’re very similar in their effect and being bitten by the one is no doubt very much like being bitten by the other. 

Anyway, enough of that. Another good weekend to come so it just remains to say have a very good one and let’s move on to the news:

PUBS & RESTAURANTS:

Licensing hours.

The Government has announced that licensing hours will be extended if either England or Wales reach the semi-finals or final of the Women’s Euros. Licensed premises that would normally close at 11pm will be allowed to keep serving until 1am if the teams progress…

• UKH reports that it ‘had supported the proposals when they were put forward by the Government earlier this year.’ CEO Kate Nicholls says ‘the pub is the best place to watch the Women’s Euros and I’m pleased the Government will extend licensing hours if either of the home nations reaches the semi-finals or final.’ She adds this move ‘will help pubs plan their activity during the tournament.’

Brand values:

Kantar’s 2025 BrandZ Global Report has held Corona as the world’s most valuable beer brand for the second year running. Remarkably, the has eight of the world’s top 10 beer brands owned by AB InBev.

COMPANY NEWS:

Daniel Thwaites announced yesterday that Kevin Georgel is to join the Company as a non-executive director with effect from 1 June 2025. Kevin Georgel is currently the Chief Executive of family owned St Austell Brewery in Cornwall and was previously Chairman of the British Beer and Pub Association and the former CEO of Admiral Taverns.

Piper Private Equity has exited its stake in Turtle Bay having sold the holding back to its founder Ajith Jayawickrema. Current chair Jane O’Riordan will step down in the wake of the transaction…

• Mr Jayawickrema says ‘Turtle Bay is a great business with a great team across its 50 sites. It has endured some real challenges and I believe it is now time for another gear change to ensure we go back to some of the original thinking from 2010, but do that in a way appropriate for 2025.’ The founder says ‘I have been involved in the start of this process with the development of our site in Chelmsford and look forward to helping deliver this across the rest of our sites. I would like to thank Piper and Jane for their contributions to the business.’

• Piper says ‘a sale of our stake back to its founder, Ajith, seems the most appropriate route to ensure a longer term view can be taken on the brand’s continued development. I would like to wish the whole of the Turtle Bay team every success in the future.’

Boxpark CEO Matt Snell talks to the MCA saying its pop-up at the Grand National in Aintree ‘was the biggest activation we have ever done – at one point there were 10,000 people there – and over the three days you are talking six-figure revenue as the bars were doing £40k an hour. They are completely insane numbers.’

Christie & Co reports that the leasehold of the sight of Woody’s has been acquired by The Windsor & Eton Brewery. Christie says that located on the riverside on Rams Passage, Woody’s pub is a lively and welcoming venue known for its great atmosphere, quality drinks, and strong community appeal.

The MCA reports that Pasta Evangelists is set to open 10 new restaurants by the end of 2025, with a focus on high-footfall locations across London and its surrounding commuter towns.

Scottish Starbucks franchisee OCO West End has reported full year numbers for the year to 30 November saying that revenues rose by 15.2% from £25.7m to £29.5m. The GP% rose from 36.3% to 36.9% taking gross profits up to £10.9m. Admin expenses rose by 18.6% to £6.8m and interest costs also rose. PBT rose by 14.0% to £3.087m from £3.296m in the prior year…

• OCO West End says ‘the directors are delighted with the performance of the business in 2024, particularly given the challenging economic climate during the year.’ It adds that ‘like the rest of the business sector, we remain cautious about the economic landscape looking forward.’

• OCO says ‘household income remains under pressure from inflation. Additionally the business sector is struggling to cope with exceptional levels of inflation particularly around wages & Cost of Goods.’

• Nonetheless, it adds ‘our development will continue in light of the risks mentioned above. We have already opened 1 store in our 2025 fiscal year, with 2 further stores planned to open by the end of Summer 2025. Our existing estate continues to perform strongly, allowing us to look forward to the year ahead with confidence.’

• OCO reports retained profits up by 18.2% to £12.6m. The nominal value of shares in issue is negligible, meaning that shareholders’ funds in both years is roughly the same figure.

Thai Square is to bring ‘an authentic taste of Thailand to Bayswater with a new site launching on Thursday 12th June.’ This will be the group’s 11th location and it will be located ‘a minute’s walk from Lancaster Gate Underground Station and directly opposite the stunning Hyde Park.’

Philippines-based operator Jollibee Foods Corporation has reported full year numbers saying that it increased sales by 13%. The Jollibee Philippine business ‘grew by 11.4% driven by a 7.9% same store sales growth.’ Overseas, ‘Jollibee International delivered a 22% YoY growth, with strong same store sales growth across markets – Vietnam 16.8%, EMEA ex-Vietnam 11.6%, North America 8.1% and China (Hong Kong and Macau) 13.2%.’

Having quintupled in value since the dark early days of Covid, shares in Premier Foods rose by around 1p yesterday (or 0.5%) on the group’s full year numbers. The company is of interest both in and of itself and also because, in some ways, it is the mirror image of the dining out market, performing better at times when eating out is under pressure.

PREMIER FOODS – FULL YEAR ANALYSTS’ MEETING:

Following the release of its full year numbers, Premier Foods hosted a meeting for analysts and our comments thereon are set out below:

Introductory comments & summary:

• Another ‘very good year’ and a reminder that volume market share has grown ahead of value market share. This will rebalance in the current year.

• The debt reduction has been helped by the cessation of pension fund contributions and positive trading.

• The group is 1) growing its core UK business and ‘layering upon this 2) new category sales, 3) overseas expansion and 4) acquisitions’.

• Capital allocation. The company believes the best use of its cash it to reinvest in the business. There is ‘a strong innovation pipeline.’

• Six weeks into the current year, trading is in line with expectations. Group sees ‘plenty of opportunities to scale the business’.

Trading:

• Q – in Q1, the group is cycling some ‘very strong comps’. And the hot weather is not helpful.

• Q – price pressure, discounting. Not really seeing any major issues.

• Q – distribution issues? i.e. getting products ‘on shelf in supermarkets’. Vital in getting brands in front of customers. Important issue but ‘no natural ceiling in sight’.

• Q – marketing spend. Co is ‘on a journey’ and further increases are scheduled. Co is ‘two thirds of the way to where it would like to be’.

Strategy, cash flow and balance sheet issues:

• This remains unchanged. Branded growth model. secure the UK branded business, introduce new products, sustain marketing investment and partner with retailers (to build the size of categories in question).

• Q – capex? The £41m this year is roughly double that of five years ago. Will be around £50m this year. There are ‘loads of opportunities’. The cap, if there is one, is site disruption rather than cash constraint.

• Q – timing on pension fund ‘resolution’. Expected by the end of calendar 2026. This is effectively a buy-in.

• Q – longer term, can Sweet Treat margins be increased materially? There are more opportunities here but the margin is unlikely to reach Grocery levels due to shorter shelf life and other factors.

• Q – longer term trends? Unchanged. Health (but also indulgence), convenience.

• Q – also longer term, the company believes it ‘can grow in the mid-single-digits’. This is inclusive of bolt-on acquisitions.

• Q – margin ambition? The gross margin should expand but the co will use this to invest in marketing and new product development. Hence, at the trading profit line, the margin may be unchanged.

• Q – cash flow & capital allocation? Preferred order is internal capex, then acquisitions, then dividend increases. The co believes acquisitions will be available.

Products – selected comments:

• Nissin, at £62m, has grown 41pc for five years. Sales are now significant and the brand is ‘bigger than Oxo’.

• Premiumisation (e.g. Mr Kipling Signature Bites & Ambrosia de Luxe) remains a positive trend. New products, such as Ambrosia Porridge Pots, ice cream and Cape Herb & Spice are in strong growth.

• International sales +23%. More than doubled international sales in the last five years. The group will soon be selling apple pies to the US.

• Acquisitions. Both Spice Tailor & Fuel10k are in strong growth via the application of the Branded Growth Model. Fuel10k this year will extend beyond breakfast into noodles, soups and other (commercially sensitive) areas.

o Q – cannibalisation of noodles vs Nissin. Nissin manufactures for PFD so the interests are aligned.

M&A.

• The company is ‘very actively looking for further acquisitions’ but remains ‘very fussy’.

Outlook:

• More products in the pipeline and new products are in development. Additional internal capex. No specific guidance on acquisitions.

Langton comment:

• As mentioned in an earlier Flash Note,  there is little to cause concern here and much to applaud. The company has clear line of sight in most areas including product development, overseas expansion, marketing spend and capital allocation.

• However, re the latter point, acquisitions remain a major unknown (at least for shareholders and analysts). The company here says it believes acquisitions will become available and, at 0.7x debt to EBITDA (with a target of 1.5x), it’s beginning to look as though something material could be on the cards in the near to medium term.

• PFD is now a thoroughly normalised company. Trading is solid and expansion levers (capex, marketing spend, potential bolt on or bigger acquisitions) are there to pull.

• Dividends are moving higher but growth remains more attractive that cash distribution.

• Acquisitions remain a major unknown but they are a) likely and b) whilst PFD is no longer a small company, it is of a size where this could make a material difference to the company and its future.

HOLIDAYS & LEISURE TRAVEL:

STR reports that U.S. hotel performance for the week ending May 10 ‘saw negative performance metrics almost across the board. Occupancy fell 2.3% to 64.6%, average daily rate fell 0.7% to $162.57 and revenue per available room fell 3% to $105.08….’

• Meanwhile, in a development that lends weight to the idea that President Trump’s tariff flip-flopping is distorting travel patterns, the hotel market in Canada saw all measures move higher. STR reports ‘occupancy up 3.3% to 68.4%, ADR up 3.8% to 207.20 Canadian dollars ($148.5) and RevPAR up 7.2% to CA141.63.’

American Express Global Business Travel reports that there has been a marked slowdown in price inflation in the business travel market…

• Its latest Business Travel Pulse reports that prices rose only marginally in Q1 having risen by 3.4 per cent in Q4 of 2024 and 2 per cent in Q3. Amex GBT says ‘London remains a priority destination on the global stage, with international businesses keen to capitalise on opportunities in the UK.’

Commenting on the UK outbound holiday market (and the suggestion by TUI earlier in the week that the market was somewhat sluggish) The Daily Mail reports ‘holidays giant Tui has suffered a slowdown in summer bookings due to weaker demand in Europe.’

OTHER LEISURE:

Everplay group plc (was formerly Team17) has announced that ‘.Steve Bell to step down as Chief Executive Officer, to be replaced by Frank Sagnier as interim Executive Chair, with immediate effect. Mr Bell became CEO when he took over from Debbie Bestwick in January last year. The company reports that ‘trading for the year ended 31 December 2025 remains in line with market expectations…

• Everplay says ‘the Board and Steve Bell have mutually agreed that he will step down from the Board and his position as Chief Executive Officer with immediate effect.’

• The shares have risen from around 186p to their current 277p under Mr Bell’s tenure and the company gives no specific reason for his departure. This has the potential to spook markets. Everplay adds that it ‘will commence a recruitment process to appoint a new CEO in due course.’ The company reports that it ‘will provide updates on the CEO recruitment process as and when appropriate.’

• Re trading, Everplay says the board has previously announced ‘that it expected to deliver an improved trading performance in FY 2025, marginally ahead of then current market expectations, alongside declaring a proposed maiden dividend.’ It adds today that it ‘is pleased to reiterate that trading remains in line with these subsequently upgraded expectations and continues to be well positioned for growth over the medium to long term.’ It will update on H1 in early-July.

• Frank Sagnier, Interim Executive Chair of everplay group plc, says ‘I would like to thank Steve for both his commitment and support over the past two years, in particular rebranding the business and supporting the reset of our strategic focus. The Board and everplay team wish him every success in his future endeavours.’

• Mr Sagnier says ‘as interim Executive Chair, I look forward to working with the broader leadership team as the business continues to execute on its strategic priorities: to accelerate growth alongside improving profitability, with an elevated focus on first-party IP, our evergreen franchises and improved returns. I am also grateful to the Board for their continued support and counsel and would like to personally thank Debbie for her ongoing commitment to everplay and industry insight as a Board director.’

US president Donald Trump says that he had a ‘little problem’ with Apple’s Tim Cook, after the company reported that it would switch assembly of iPhones for the US market from China to India in order to avoid tariffs. The president said on his current Middle East tour ‘I said to him: ‘Tim, you’re my friend. You’re coming here with 500bn but now you’re building all over India. I don’t want you building in India.’’ He added ‘India can take care of themselves … we want you to build here.’

The Institute of Public Policy Research has suggested that the UK’s competition regulator should move to curb the dominance of US tech giants in the UK such as Apple and Google….

• The IPPR suggests that dominance in the app market means that the global operators are ‘extracting value’ from UK businesses and workers. It says ‘enforcing the UK’s competition rules isn’t anti-business – it’s a pro-business, pro-worker, pro-growth agenda. If we weaken those rules, we’re letting dominant firms and tech giants hold back innovation and investment.’

FINANCE & MARKETS:

Data generated by accountant EY suggests that President Trump’s America First policy could be behind a reduction in US investment in the UK

Sterling higher at $1.3325 and €1.1886. Oil up at $64.61. UK 10 year gilt yield down 7 basis points at 4.65%. World markets mixed yesterday and London set to open up around 12 points as at 6.30am.

RETAIL WITH NICK BUBB:

• Nick is taking a short break. Back on 19 May.