A Day in the Life:

Langton is away from the office this week. There will be no Daily Wrap and A Day in the Life will be back on Monday.

The News:

PUB, RESTAURANT & DRINKS PRODUCER NEWS:

• Mitchells & Butlers has restructured its senior operations team around four business divisions (Pubs, Restaurants, Premium, and City), writes MCA. Chief executive Phil Urban said of the reorganisation: ‘The new divisions will provide a more streamlined approach to our operations allowing us to be more agile and benefit from business synergies.’ Nick Crossley is the director for Pubs, while Rob Pitcher oversees Restaurants, Dennis Deare is the director for Premium, and Susan Chappell is in charge of the City division.

• The rate of brewery openings in the UK eased back slightly in 2015 although the growth rate in London increased, according to HMRC figures. A total of 336 new breweries opened last year, compared to 350 in 2014, despite tax breaks supporting smaller operators.

• TGI Friday’s has told MCA it is preparing to shape its design and offer around three core segments and could move into food-to-go and delivery. The three segments are major city centres, major shopping centres.

• Julie Campos, managing director of Nicolas Feuillatte, has branded recent price cuts to Champagne in supermarkets as ‘suicidal’ for producers.

• New World Trading Company has secured a grade II listed site in York at no. 15 Stonegate for its tenth Botanist.

• Imbiba-backed Camm & Hooper is to unveil its new bar concept, By Appointment Only, at its Victorian Bath House site. The Bath House will be available as a private area to book for 2-50 guests from Thursday to Saturday.

• Drake & Morgan has dismissed a staff member for gross misconduct after a racial slur was found on a customer’s bill at The Happenstance. The drink was reportedly for a female customer who was the only black person in her dining party. A spokesperson for the nine-strong bar chain said: ‘We are appalled by the unacceptable behaviour of one of our waiting staff on Sunday afternoon. His disciplinary took place this morning and he was dismissed for gross misconduct. We have apologised unequivocally to two members of the group who were at The Happenstance at the weekend.’

• Independent convenience stores are growing at a faster-than-average rate, according to the Local Data Company. Independent convenience stores saw a net increase of 173 units (+3.49%) last year, compared to overall rate of growth for independent shops (0.18%).

• Square Pie is to launch a frozen range into Sainsbury’s after watching consumers buy its unbaked pies from its restaurants.

• A ban on e-cigarette advertising in Scotland from the European Tobacco Products Derivative could pose ‘significant harm’ according to the government and store owners. The Scottish government believes that additional restrictions on domestic published advertising and sponsorship would ‘reduce [the] visibility and attraction’ of non-medicinal nicotine containing e-cigs to under 18s and adult non-smokers. The ECITA also claims that the ban could lead to people conflating e-cigs with more harmful tobacco products.

LEISURE TRAVEL:

• TUI updates on Q2 tradng saying winter is as expected & group remains ‘pleased with summer’. Says ‘winter 2015/16 is closing out as expected, with 95% of our Source Market programme sold and increased revenue in all our major Source Markets. We remain pleased with our Summer 2016 trading performance, with both revenue and bookings ahead of last year.’

• TUI Q2 update: Says ‘UK continues to demonstrate a strong bookings performance, up 9% on prior year.’ Group adds ‘Hotels & Resorts are performing well overall, benefitting from increased demand in Spain, the Canaries, and long-haul. Cruise is delivering continued growth, driven by strong demand for Mein Schiff 5 which is due to be launched this July. Hotelbeds Group continues to deliver TTV growth and the disposal process remains on track.’

• TUI Q2 update: Group says it ‘has again demonstrated the flexibility of its business model and the ability to remix destination capacities’. This is necessary ‘to match demand and as a result demand and pricing has remained resilient overall despite the impact of geopolitical events.’ TUI adds ‘our integrated model with our differentiated range of own accommodation content, combined with strong supplier relationships continue to give us a strong competitive position and sustainable earnings growth. We therefore remain well positioned to deliver underlying EBITA growth of at least 10% in financial year 2015/16.’

• TUI Q2 update: Says summer is sold ‘broadly in line with last year. Revenue is up 3%’ with bookings +2%, prices +1%

• TUI Q2 update: Says ‘we remain pleased with the development of Summer 2016’. Revenues are +3%. Group says ‘our customers are continuing to make plans to travel particularly to traditional destinations such as Spain and the Canaries, and increasingly to long-haul locations, benefitting our strong Hotels & Resorts brands in those parts of the world.’

• Carnival yesterday reported Q1 numbers, profits nearly doubled at $301m vs $159m in Q1 last year.

• Carnival says Q1 net revenue yields +5.7% in constant currency terms, better than December guidance of up 3.5% to 4.5%

• CCL Q1. Net cruise costs ex-fuel per available lower berth day +1.6% in constant currency, better than Dec guidance of up 2.5% to 3.5%.

• CCL Q1 re outlook says ‘cumulative advance bookings for the remainder of 2016 are well ahead of the prior year at slightly higher prices’. Says ‘net revenue yields are expected to increase approximately 3% in constant currency compared to the prior year’ and adds ‘net cruise costs excluding fuel per ALBD are expected to be up approximately 2% in constant currency compared to the prior year’.

• CCL says FY 2016 adjusted earnings per share ‘are expected to be in the range of $3.20 to $3.40’ vs Dec guidance of $3.10 to $3.40

• CCL President and Chief Executive Officer Arnold Donald reports on Q1 saying ‘our teams delivered another strong quarter of operational improvement by creating increased demand for our brands and leveraging our scale which resulted in revenue yield improvement approaching 6 percent and the near doubling of first quarter adjusted earnings.’ He adds ‘our ongoing guest experience innovations coupled with our increasingly effective marketing and communication efforts have driven additional demand for our brands, resulting in a strong booked position.’ Mr Donald concludes ‘the underlying strength of our operating performance, leading to sustained earnings and cash flow growth, has accelerated the return of capital to shareholders through our stepped up share repurchase program.’

• The Egyptian tourist office insists airport security was ‘fully implemented’ at the time of the plane hijacking on Monday.

• HotelPlanner has acquired hotel reservation website Hotel Hotline and is looking for further M&A opportunities.

FINANCE & MARKETS:

• Diego Zuluaga, Financial Services Research Fellow at the IEA, has cautioned that the capital set aside for recent bank stress tests might be dwarfed by the scale of the next downturn.

• European Central Bank policymaker Jens Weidmann has said that the UK should remain in the EU as it benefits from trade and is an important voice in the union.

• US house prices rose 5.7% year-on-year in January, more than twice the rate of inflation.

• World markets: UK up yesterday, Europe also higher. US up but Far East lower in Thursday trade

• Oil price down again, trading around $38.90 per barrel.

Retail Roundup from Nick Bubb:

Consumer Confidence Watch: The latest monthly GFK Consumer Confidence survey came out overnight and showed the overall index stuck at zero, despite solid personal confidence measures, with the highlight being the news that the measure of how consumers see the wider UK economy developing over the next 12 months is (at -12) no less than 18 points lower than in March 2015. Joe Staton (the Head of Market Dynamics at GfK) said that: “While UK consumers remain resolutely upbeat about their personal financial situation, concerns about prospects for the general economic situation continue to dampen our mood…Despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing Eurozone crisis appear to be hitting home”.

Bonmarché:
Out of the blue yesterday, the struggling Wakefield-based Bonmarche announced the surprise appointment of one Helen Connolly as the company’s new CEO. Interestingly, there was no firm start date (“Helen will take up her position later in the year”), although it is unclear whether that is to do with her employer Asda or the continuing uncertainty about when the incumbent Beth Butterwick will leave to become the new CEO of Karen Millen…The latter move was announced back on Dec 16th, along with the Bonmarché profit warning. Anyway, Helen is the Senior Buying Director for George at ASDA and she began her career in womenswear buying at Next in 1995. She leftNext in 2003 to join George at Asda, but left after 3 years to work at Dorothy Perkins before returning to the Midlands and George at Asda in 2008. Whether she has CEO skills is the big unknown, but people like
Belinda Earl came up from a background in Buying, for example, and the veteran Chairman of Bonmarche, John Coleman, trumpets that “Helen is an ambitious, talented and passionate individual who will make an outstanding leader for the business”, so we wish her well.

Easter Watch:
We flagged yesterday that an early Easter is never usually good news for Non-Food retailers, but that we expected to hear that overall John Lewis enjoyed some good trading last week, despite the inclement weather. And so it came to pass, with w/e March 26thseeing gross sales up by 10.4% on last year (up c8.5% “LFL”), albeit that was flattered by the early fall of Easter: against the Easter week last year gross sales were flat. The highlight was good Electricals momentum, with overall sales up by 19.1% last week (“driven by a strong set of results in vision, audio and connected home. Communications Technology had a good week, with tablets and computers proving popular”), but we will need to see the early Easter distortion drop out of the comps to judge the real trend. Over at Waitrose, sales also looked strong; total sales excluding fuel were up 20.7%,
but that was heavily influenced by the fall of Easter this year and a more meaningful comparison is that sales saw a 3.7% uplift (c1.5% LFL) on the equivalent Easter week last year.

Next Share Buyback Watch: We noted yesterday that after the 15% plunge in the Next share price on Thursday, the shares drifted off a little further on Tuesday, despite a rally in the rest of the sector and Wednesday was much the same story, with the shares drooping to 5560p…It didn’t help that “Mr Share Buyback Man” retired in a huff to his eyrie in Next HQ, upset that his exertions in picking up a short £5m worth of Next stock on Tuesday had failed to stem the tide…

Today’s Press and News:
The main headlines today are still about the political row about the likely closure of the Port Talbot steelworks, but there is plenty of coverage on the Business pages of the latest twists and turns in the bizarre Premier Foods bid situation, whilst there are also a few snippets about the Bonmarche CEO appointment (see above). The FT market report notes that Investec became the latest broker yesterday to cut Next to a Sell and that Dunelm was hit by a bearish sector review by Jefferies. And the FT also flags the intriguing demerger announced by the German conglomerate Metro yesterday: the Real hypermarkets and Cash & Carry food wholesaling arm will be spun off from the Media Markt and Saturn electronics chains, which will create a specialist peer for Dixons Carphone, as well as a peer forBooker (which reports Q4 trading today). Nick Bubb – nicholas_bubb@hotmail.com