A Day in the Life:

So is it only a matter of time before Minecraft attracts a health-warning?

Or perhaps it’ll get sold only to over-18s in licensed premises, will have to be wrapped in plain packaging (or at least plain virtual packaging) and be furtively transacted under the table, like the fix that it is because, unless I’m very much mistaken, it’s an addictive, mind-mulching game that must be used the length and breadth of the country as an excuse when it comes to uncompleted homework, missed deadlines, tea allowed to go cold, dog not walked, bedroom not tidied etc. 

But I suppose every generation is entitled to its addiction.

It may have been Lego, football cards and talking about what was on the telly last night when I was young (remember TVs; non-interactive boxes in the room that had three and then four channels, which kept you entertained for hours?) but things have moved on and now your kids will be Skyping each other and, if you send them to their rooms in disgrace, they may be secretly pleased that they can get back to their various devices, interact with what’s fast becoming their real world.

But you snooze, you lose and, no matter how hard it is to keep up with these things, I feel that one should try. On to the news:

Whitbread – Full Year Numbers:

FY Numbers: 53wks to 3 Mar 2016:

Whitbread has this morning updated reported full year numbers for the 53wks to 3 March and our comments are set out below:

Full year numbers in outline:

Whitbread has reported full year numbers saying that it has generated ‘good growth in revenue, profit and dividend’

Total revenues are £2.92bn (+12%) whilst underlying profit is up by 11.9% at £546.3m (estimates around £542.0m)

Underlying EPS is 238.7p (up 11.7% and comparing with estimates of around 234.0p)

Full year dividend comes in at 90.35p against 82.15p last year (+10.0%) and versus estimates of around 90.6p

Full year results by division:

Ahead of its full year results, Whitbread reported 50wk numbers on 3 March. At that stage, LfL sales at Premier Inn were up by 4.4%, at Restaurants they were up 1.0% and Costa was +3.0%

Group reports Premier Inn sales growth of 12.9% and LfL growth of 4.2%. Costa total sales are 15.9% higher with LfL sales in the UK +2.9%

Both numbers represent a further slight slowdown at the cumulative level since w50

Premier Inn:

In hotels & restaurants, Whitbread says underlying operating profit was up 11.3% to £446.9 million.

It reports that Premier Inn grew total sales by 12.9%, like for like sales by 4.2%

Total REVPAR was up by 3.1% with the number of rooms available +9.8%

Whitbread says ‘total occupancy remained high as we finished the year at 80.9%.’

Restaurants:

Restaurants grew total sales by 3.5%, like for like sales by 0.8%

Whitbread says this is ‘ahead of its competitors’

The group adds that it opened four net new sites during the 53 weeks.

Costa Coffee:

Whitbread reports ‘Costa’s underlying operating profit was up 15.8% to £153.5 million, with total sales growth of 15.9%.’

It says growth ‘was driven by UK like for like sales growth of 2.9%, 197 net new stores worldwide and 924 net new Costa Express machines.’

Debt, balance sheet & cash-flow:

Whitbread says m (2015: £583m) largely as a result of freehold purchases

Outlook:

Whitbread does not give LfL figures for current trading.

CEO Alison Brittain says rather ‘whilst it is only six weeks into our new financial year we remain confident of making good progress this year.’

Overall, Chairman Richard Baker reports ‘this is a very exciting time for the Company; with our recent senior appointments, we now have a refreshed leadership team, and I am delighted it is being led by Alison Brittain as CEO, to take us on the journey to building a bigger as well as a better Whitbread.’

Alison Brittain reports ‘Whitbread has had another successful year with good growth in sales of 12.0% and underlying earnings per share increasing by 11.7%, once again demonstrating the strength of our businesses.’

She says ‘both Premier Inn and Costa benefit from attractive market growth opportunities and we will continue to capitalise on these by developing our network and brand strength as we fulfil our ambitions to reach c.85,000 UK hotel rooms and c.£2.5 billion system sales in Costa, by 2020.’

Ms Britain says ‘the world around us is shifting, with rising customer expectations, an evolving competitor landscape, rapid technological developments and changing cost structures. In responding to this change, I am especially keen to reinforce our relentless focus on our customers and on innovation to develop our brand propositions ensuring we stay ahead and become more productive.’

The group will focus on key themes – UK innovation, overseas expansion and building a sustainable infrastructure.

CEO Brittain says ‘this strategy will enable us to deliver our significant growth ambitions, grow earnings and dividends, maintain good returns on capital and create further value for our shareholders.’

Langton Comment: At its 50wk update, slowing sales at Costa grabbed the headlines.

Sales have slowed cumulatively – that is week 53 vs week 50 – but it is not clear what happened in the last 3wks of the year and nor is current trading outlined.

With that in mind and with strategy statements to one side for the moment, some concerns may remain as to how the group is getting on.

There are disrupters out there – AirBnB, new start-up coffee shops etc. but, as recently as last week, both Starbucks and McDonald’s showed that incumbents can be capable of strong performances even in more challenging markets.

Clearly warmer weather over the winter impacted Costa and Whitbread’s numbers did beat consensus at the bottom line.

However, today’s meeting could be more-than-usually important in determining the mood towards the company. There are no rabbits to be drawn from hats meaning that earnings growth may be hard-earned.

Nonetheless, Whitbread has a freehold base and international brands. The shares are no longer cheap – at least relative to their recent levels – and buyers may be attracted by a valuation of around 15x earnings.

The News:

PUB, RESTAURANT & DRINKS PRODUCER NEWS:

• The Coaching Inn Group has posted a 29% to rise in sales to £13m and a 60% increase in profit to just under £1.3m for the year to March 2016. ‘We continue to see benefits, both from our acquisitions and our investment in established sites, particularly in relation to our hugely popular Eatery and Coffee House concept,’ commented group finance director Edward Walsh. ‘We’re ahead of our acquisition plan, with four new sites acquired in the past 12 months and with terms agreed on a further two sites, we’re on track to reach our target of 15 sites before the end of the year.’

• Upham Group, the premium pub operator and craft brewer, is looking to raise up to £12m for further expansion by listing on AIM. The group currently operates from 15 sites.

• Enterprise Inns is teaming up with London-based Food & Fuel, led by former Spirit CEO and Café Rouge co-founder Karen Jones, in its third Managed Expert partnership. The joint venture will trade as Frontier Pubs and will focus on developing sites ‘in and around London’ and is, according to Enterprise CEO Simon Townsend, ‘further evidence of the progress we are making in developing our managed house estate’. The addition joins existing partnerships Mash Inn, with Laine Pub Group, and Hippo Inns, led by Geronimo Inns founder Rupert Clevely.

• AB InBev has confirmed its acquisition of Italian craft brewer Birra del Borgo as it looks to take a stake in the Italian craft beer market. The brewery is based in Borgorose, a small town in the province of Rieti on the border between Lazio and Abruzzo.

• Renewed caution in the consumer sector has led to a 3% fall in UK consumer confidence to -8% in the first quarter of 2016. According to the latest quarterly tracker from Deloitte, an unusually large drop in sentiment about general health and wellbeing was behind the decline.

• The campaign against the new European Tobacco Products Directive (EUTPD), set to come into effect in a few weeks, has gathered more than 90,000 signatures.

• Last ditch talks failed to save BHS and the chain has been put into administration. For the moment, the stores remain open

LEISURE TRAVEL:

• Research from Travel Weekly suggests AirBnB and related accommodation platforms still have work to do, with 26% of respondents having reservations.

• Sharing economy firms Uber and Lyft have usurped taxi and car rental as the most popular ground transportation providers for business travellers, according to a new report. The study of more than 9 million US business traveller receipts and expenses shows a 4% rise in such transactions during Q4 2015, bringing its total market share to 46% of total ground transportation.

FINANCE & MARKETS:

• World markets: UK mixed but Europe and US down in Monday trade and Far East markets lower so far Tuesday

• Oil little changed at around $4480 per barrel