Langton Capital – 12-08-19 – PREMIUM – Coffer Peach Tracker, US Restaurant Sales, Thomas Cook & Other:
Coffer Peach Tracker, US Restaurant Sales, Thomas Cook & Other:PREMIUM EMAIL – PLEASE DO NOT FORWARD: A DAY IN THE LIFE: So, after a few days in the sweltering Padova / Venice region to round off our holiday, we need a holiday. However, I should put exhaustion to one side and maintain that we had a good time and add that, as it approaches the time to come home, I’ve finally got to understand Italian driving as the main concepts seem to be that speed limits etc are posted in kilometres per hour but obeyed in miles per hour and that you should replace the word ‘maximum’ with ‘minimum’. Similarly ‘no overtaking’ means ‘compulsory overtaking’ (particularly on the brow of a hill and approaching bends) and stop signs and red lights are advisory. You should read your newspaper, drive with your knees when texting and flick your thumb from your teeth every time you catch another motorist’s eye as it’s the equivalent of a friendly wave. Nothing is ever your fault and you should maintain that position noisily whenever and wherever possible. You should stamp on the brake frequently and at random and it’s also worth recapping the basics, for example, the fact that you drive on the right in northern Italy, the left by the time you get to Malta and in the middle of the road everywhere between the river Po and the southern tip of Sicily. But anyway, we’ve survived so far and we’ll be back in the UK later today. On to the news: COFFER PEACH TRACKER – JULY 2019: The Coffer Peach Tracker for July shows that LfL sales across the restaurant & pub industries rose 1.2% in July. This is positive, but below inflation and could see margin pressure maintained. Coffer Peach reports that restaurant chains have bounced back given the easy comps provided by the hot weather and second half of the World Cup in July last year. The Tracker says ‘Britain’s managed pub and restaurant groups saw collective like-for-like sales grow 1.2% in July against the same time last year, with restaurant chains recovering strongly after a poor summer in 2018’. Restaurant LfLs are up a ‘healthy’ 3.8% against July last year ‘when trading was hit by hot weather and World Cup football. Managed pubs saw LfL sales fall by 0.2%. Looking on the bright side (and beyond the CVAs and administrations that are a feature of the High Street) CGA says ‘considering the barnstorming July that pubs had last year, holding relatively steady this July will be seen as a good performance, and restaurant groups will be more than relieved with their sales recovery.’ CGA says ‘these figures are very much ‘steady as she goes’ for both the pub and restaurant sectors.’ We would suggest that, whilst the numbers are in line with expectations, they are not sufficient to call a recovery in the immediate term. CGA says ‘with Brexit looming, there will be real nervousness about a crash in autumn.’ The regions were +1.3% whilst London was +1.0%. Regional restaurants were +4.3% whilst London restaurants were +2.4%. Pubs grew sales marginally in London but sales slipped by 0.3% in the regions. Total sales are up by 3.4% across the groups contributing data to the Tracker. This shows that the impact of new openings is still material. RSM nonetheless says ‘sustained like-for-like growth will come as welcome news to Britain’s restaurant groups and provides further evidence that supply is reaching parity with demand.’ There is little doubt that it remains challenging out there. GENERAL NEWS – PUBS & RESTAURANTS: Deliveroo has announced that it has set up a team at its HQ that will identify restaurants in need of support to offer them a place in a local Editions delivery-only kitchen. AB InBev subsidiary ZX Ventures has sold its homebrew supply retailer Northern Brewer to an affiliate of Blackstreet Capital Holdings. In the US, TDn2K reports that restaurant sales fell in July at their worst rate in nearly 2yrs. TDn2K says LfLs fell 1% in the month with traffic down by 4%. The industry analysts say ‘without a doubt, we are experiencing a year-over-year slowdown in restaurant same-store sales coming, in part, from lapping over tougher sales comparisons dating back to Q2 2018.’ Dr Pepper reported Q2 numbers just below market expectations saying ‘our strong quarterly results cap an outstanding first year for Keurig Dr Pepper.’ It adds ‘looking ahead, we remain confident in the delivery of our long-term value creation framework.’ Lidl has dropped single-use plastic bags in favour of eco-friendly packaging. Is it just us or are we in danger of losing a lot of our companies? Millennium & Copthorne, Just Eat, Easy Hotel, Merlin and a large chunk of Whitbread either have or may shortly not be available to investors. HOLIDAYS & LEISURE TRAVEL: The FT has reported that Thomas Cook is in advanced talks with its bondholders to raise a further £150m on top of the £750m agreed already with Fosun, as the group sets the terms of a rescue deal. Marriott International is to invest $800 million to develop five all-inclusive resorts and launch a dedicated platform to sell the resulting product. The first will be a 650-room resort in Punta Cana in the Dominican Republic, which is scheduled to open in 2022. Uber shares fell last week on disappointing Q2 numbers. The company missed estimates at both its revenue and its net income lines. It nonetheless says ‘we think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down.’ OTHER LEISURE: The number of complaints about British betting firms has increased 5,000% in the past five years. Neil McArthur, chief executive of the Gambling Commission, said: ‘We are pushing the industry to know its customers, and part of this is actually, possibly, a good sign because it’s suggesting that consumers are demanding more of the gambling operators’. FINANCE: Chancellor Sajid Javid has said that he does not expect the UK to slide into recession despite data showing the economy shrank by 0.2% between April and June. Voluntarism is the belief that willpower and want can overcome facts. Sterling is trading at 2yr lows against the US dollar and the Euro. START THE DAY WITH A SONG: Last Friday’s song was What Became of the Likely Lads by The Libertines. Today who sang: But then all they know is how to put you down When you’re there, they’re your friend But then when you’re not around They say, “Oh, she’s changed” RETAIL WITH NICK BUBB: Saturday’s Press and News (1): There were some interesting front page headlines in the Saturday papers and, after the disappointing Q2 GDP figures, the FT led its front page with the headline “British economy goes into reverse”, but who would have expected the Guardian to lead with “Army’s frontline in crisis, as recruitment collapses”? And who would have thought that the only paper to lead with the shocking news of a national power cut that caused huge transport disruption on Friday evening (“Britain hit by power cut chaos”) would be the Telegraph? To its credit though, the Times did have a front page photo of the hapless new Chancellor of the Exchequer, Sajid Javid, noting that he visited the National Grid Training Centrehours before the power cut…
Saturday’s Press and News (2): In terms of Retail stories, the Times and the Daily Mail both highlighted the negative reaction on Wall Street to the news that the Online luxury business Farfetch has bought the streetwear brand Off White. The Times also flagged that the bookshop chain Foyles has done a deal to supply libraries to a chain of upmarket retirement homes. And the Daily Mail noted that the Superdry Annual Report & Accounts on Friday revealed that the former CEO Euan Sutherland got a £1m pay-off. The Times market report highlighted that the share price of the embattled shopping centre business Intu Properties continued to fall on Friday despite share buying by the new CEO Matthew Roberts and the veteran City commentator, Neil Collins, stuck the boot in on Intu in his FT column (“Reality check overdue for shopping centre landlord Intu”), mocking the company’s name change from Sunday’s Press and News (1): The focus on Sports Direct continued in the Sunday papers, with the Observer running a feature on “House of Fraser one year on”, highlighting that House of Fraser stores like Camberley and Epsom look increasingly shabby, with empty beauty counters and most of the space devoted to cheap sportswear…And the Sunday Times had an interesting feature on the embattled shopping centre industry (“Hunting for bargains”), noting that despite the big profits made by hedge funds shorting the troubled Intu and Hammersonthere are investors looking at bottom-fishing buying opportunities. The other big feature was the Sunday Telegraph look at the problems of Boots, under the ownership of Stefano Pessinaand the stewardship of Seb James (“Boots, a suitable case for treatment or in terminal decline?”).
Sunday’s Press and News (2): In terms of Retail news, the Sunday Times flagged that Carphone Warehouse is suing Telefonica (the owner of the mobile phone network O2) for lost profits, companies controlled by the vulture fund Hilco have clawed back £20 from the collapse of HMV (with staff and suppliers set to lose out), the troubled footwear chain Schuh has called in restructuring experts from KPMG and the loss-making Online mattress retailers Eve Sleep and Simba are in early-stage merger talks. The “Inside the City” investment column in the Sunday Times looked at the slump in the share price of the Motor dealer Pendragon and said “Avoid”. The Sunday Telegraph found a welcome fashion model photo opportunity in the not very interesting news that the fashion chain White Stuff narrowed its losses last year. Finally, the Mail on Sunday highlighted that Next is now, at £8bn, capitalised at |
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