Leisure Wrap & Other:

So the trading day is grinding to a close. We’re another day older but are we any wiser? After a day of intensive head-scratching, pen flipping and gossip, we have been considering the following. As always, contact us if you’d like further details:

Greene King directors:

• Tim Bridge is leaving Greene King after 11yrs in the chair.

• This brings it home that CEO Rooney Anand has also been in his job for 11yrs.

• That’s a long time but, interestingly, Ralph Findlay has been CEO at Marston’s since 2001 and John Hutson has been CEO at JDW since God was a nipper.

• With the exception, perhaps, of MAB, the pubs sub-sector has a history of relative longevity with regard to its CEOs. Messrs Andrew Page (RTN), Giles Thorley (PUB) and Ted Tuppen (ETI), though now gone from their relative positions, also fell into this mould.

JDW still buying shares back:

• Co has announced that yesterday it bought back a further 78k of its own shares at an average of 680p

• It has now bought back 797k for £4.981m, an average of 625p per share.

• As the shares are now trading at 683p per share, how the vendors of the above stock now feel is perhaps best not reported

BP, the dilemma re holding your dividend:

• Arguably the oil stocks are going through what pubs & restaurants went through in 2008-09.

• As the credit crunch bit, many if not most leisure companies found themselves with stretched balance sheets, too-high dividends, etc.

• Many went bust, most cut their dividends and a number had rights issues.

• Some, indeed, are still not paying a dividend seven years later. ETI and PUB are non-payers and MAB has only just reinstated a payment to shareholders.

• BP has today held its dividend despite profits falling by 91%. Its shares have fallen, they are currently 8% lower.

• AAL a few weeks ago passed its dividend – and its shares also fell.

• So perhaps you’re damned if you do, damned if you don’t?

• The argument is that, if you don’t cut your dividend, you are consuming your own flesh. You will set yourself on a permanently lower trajectory. Though you may, the cynics could suggest, have a rights issue up your sleeve to be popped out when your share price has stabilised & when you perceive there to be ‘growth opportunities’.

• If you do cut your dividend, you’re seen as weak, vulnerable and, no matter how much you say you’re being decisive, you may not be believed.

• Nobody said, when the CEOs of these various companies took their 8-figure salary jobs, that it would be easy.

Random information, hopefully not all of it useless:

• Horizons has it that restaurateurs should curry favour with their customers in case there is (or ahead of) another recession. See earlier email. And, though we have to be careful that we don’t talk ourselves into a slowdown, this seems like good advice because, if anything, we’ve learned that, if you gouge customers in the upcycle, they will pay you back (or rather not pay you back) in the down.

• Sir Stelios is offering all grocery items in his new easyFoodstore, including noodle pots, sardines and tinned spaghetti hoops, for just 25p for the whole of February. This, though it won’t quite last at this price, will put more money into would-be pub & restaurant goers pockets.

• Am I right in thinking that revenue growth of 16% for Ocado may be a little low for a mould-breaking, disruptive online retailer? And what about margins?

• Stock market meant to open 20pts down but now, at time of writing, is down over 100pts. Go figure.

• Travel stocks up late yesterday on relief that the oil price rally was petering out. Oil stocks, unsurprisingly, took the opposite view.

• Sterling down against the US$ but up against the Euro. Nothing really changed out there with regard to the order in which countries are likely to hike rates – betting still US 3-4 rises this year, UK first rise Q1 next year, Eurozone unknown.

We’re so 21st Century, this morning’s Tweets (diff. font size denotes importance):

1. Greene King has announced chairman Tim Bridge to retire, Philip Yea to chair the board from 2 May.

2. JDW has announced that yesterday it bought back a further 78k of its own shares at an average of 680p

3. Crowdfunding. Harry Brompton has raised £87k (of £300k) with 4dys left. Red Squirrel Brewing is at £221k of intended £500k with c3wks left

4. CGA Peach data has suggested that the number of licensed premises in Scotland rose in the last year by 86 units (+0.8%).

5. Peter Backman MD of foodservice analysts Horizons has said operators must build a ‘bank of goodwill’ in anticipation of another recession

6. Cheltenham’s late-night levy is to be scrapped after the scheme failed to raise the expected amount since its introduction in 2014

7. Domino’s UK’s joint venture with Domino’s Pizza Enterprises in respect of the group’s struggling German business has received approval.

8. Artisan pizza chain Franco Manca is expanding beyond central London after making a deal for a site near the Intu shopping centre in Bromley

9. EasyJet founder, Sir Stelios Haji-Ioannou has entered the competitive budget grocery sector with the trial of his first easyFoodstore shop

10. SBRY has announced indicative terms for HOME. Is 0.321 shares (currently 244.6p) plus 55p, plus c27.8p. Equates to 161.3p

11. Kuoni Board unanimously recommends takeover by private equity company EQT to shareholders. Price CHF370 per B share.

a. Kuoni says ‘the transaction enables Kuoni Group to further develop its position as a leading, focused and global travel services provider’

b. Kuoni says group CEO Zubin Karkaria together with the current management team will continue to lead the company.

12. Ryanair expects average fares to fall 6% in the next quarter as it delivers oil price savings to customers in major markets.

13. Yahoo to cut 15% of workforce per WSJ. Mobile app WhatsApp is used by 1bn people every month. Twitter shares volatile on takeover reports

14. UK mortgage approvals rose in December to 70.8k. This is well off the 40k to 50k lows seen in the aftermath of the credit crunch

15. UK PMI rose to 3mth high of 52.9 from 52.1 in December as manufacturing growth beat expectations. Exports declined, however