A Day in the Life:

Follow us on Twitter at either @langtoncapital or @brumbymark.

Find previous emails at https://www.langtoncapital.co.uk/daily-notes/ 

So in much the same way that people who endlessly complain often get their way because most of us just can’t stand to have ongoing arguments, I am now finding that I’m being bullied into changing my behaviour by my Microsoft spell-checker.

It makes me stick a hyphen between words when I wasn’t going to bother, it changes the letter ‘S’ into a ‘Z’ in words like organization without even telling me and it simply will not let me use words that I’ve been using all my life such as those in the phrases ‘give us a skeg’, ‘it’s siling down’ or ‘larking down the tenfoot’.

All of which suggests that we’ll end up as rather a bland mush using some sort of mid-Atlantic English when we write and a ghastly version of ‘estuary-English’ when we speak. But such is life.

Anyway, it’s time for the news but if you would like to spread the love and add a colleague or acquaintance to this email list then just let me know. On the other hand, you could just forward it to them & suggest that they hit the ‘subscribe’ button at the bottom and then, via the miracles of modern science, it will bung them on the list.

The News:

Pub, Restaurant & Drinks Producer News:

• January Coffer Peach Tracker has LfL sales +1.9% across the UK’s largest restaurant + food-led pub chains

• Coffer Peach Tracker suggests that the UK provinces outperformed London in January trading. The Tracker says ‘Britain’s pub and restaurant groups have reported a solid start to 2016, with collective like-for-like sales in January up 1.9% on the same month last year’. Peter Martin comments ‘January is a slow trading month, so not too much should be read into these figures, but the sector will be pleased to have started what looks like being a challenging year on a positive note.’

• Coffer Peach Tracker: Total sales in January were up by 5.4% suggesting that new capacity added >3% to sales

• Coffer Peach Tracker: Says ‘companies trading away from London saw the best of January’s sales uplift’. Says sales outside M25 were +2.4% with London sales up by only 0.4%. Peter Martin comments ‘the capital was a tougher trading environment for all in January’.

• Coffer Peach Tracker: Casual diners outperformed pubs & bars in January. Sales there +3.6% nationally and +4.7% outside London. Tracker comments ‘this January’s pattern was similar to last year’s, when overall the market was up 1.4% on 2014, and with restaurants outstripping pubs, perhaps reflecting the continued impact of ‘dry January’. It adds ‘the weather also always plays its part. Although it has been extremely wet, it hasn’t snowed to any large degree and rain does not have the widespread disruptive effect that winter snow can have on people’s decisions to go out’.

• Coffer Peach Tracker: LfL sales for the 12mths to end-January 1.8%.

• Coffer Peach Tracker: David Coffer says ‘the January like-for-like sales figures for inside London reflect, to some extent, the emotional sentiment Londoners experienced as a result of the November Paris atrocity.  It is comforting to note the apparent small rebound in January. It will be interesting to see whether this trend continues onwards through to the summer.’

• David Coffer says ‘superior like-for-likes for outside London are no surprise and confirms the trend of expansion away from an ever more expensive London market – in terms of property acquisition, and indeed consumer prices. This trend is expected to continue. The very high cost of London living is seeing the boundaries of Greater London extend to the provinces with many now commuting on a daily basis from provincial cities. This trend will also continue and further enhance trade outside of London.’

• Enterprise non-exec (and former MAB CEO) Adam Fowle has bought 60k shares in Enterprise at c80p per share

• Domino’s Australia has reported a hefty 56.7% rise in net profit for the six months to December on the back of ‘organic growth’, to 45.6m AUD (£22.7m). The largest Domino’s Pizza franchisee outside the US, which holds the master franchise rights to Australia, Belgium, France, Germany, Japan, and the Netherlands, also announced its second profit upgrade since December. The firm said its operations in Japan had increased by 48 stores in six months to December, while its Australia and New Zealand operations were on track to open more than 50 stores for the 12 months to June. It currently has more than 1,700 stores globally.

• Premier Foods is entering its Ambrosia brand into the frozen category, with the launch of Ambrosia Frozen Custard (850ml/rsp: £3.75). The product aims to tap into US dessert trends and will come in four flavours: Vanilla; Vanilla with Strawberry Marble; Vanilla with Chocolate Swirl; and Vanilla with Chunky Fudge.

• Hippo Inns, the first Enterprise Inns ‘Managed Expert’ partnership and joint venture with Rupert Clevely, is set to open four sites in the next three months. On 7 March The George in Crossharbour will open, becoming Hippo Inns’ second site since its launch reports M&C.

• M&C Allegra’s Food To Go Tracker shows the category continued to outperform the wider eating out sector in Q4 2015. The report shows the average number of food to go visits has increased from 5.6 a month in Q4 2014 to 6.2 in the last quarter, with time-poor consumers happy to spend more for quality and convenience. Gareth Nash, head of consumer insight for M&C Allegra, said: ‘The unprecedented levels of Food To Go purchasing are due in no small part to more macro changes in consumer behaviour.  As the day-to-day life of many, particularly working, customers becomes busier and less structured, there are escalating needs for fast, convenient, informal and flexible food and drink offerings.’

• The Coyote Ugly chain of bars is making its way to the UK and its first site will open in Cardiff in March.

• Pret A Manger is looking to open more hospital and university sites this year.

• McDonald’s is opening a restaurant in Korea that will serve beer and ‘premium’ burgers, joining branches in other markets that also serve beer.

• Casual Dining Group brand Bella Italia is opening four new sites this month as part of a schedule that will see it open some 20 units between now and May.

• Easyfoodstore has been forced to limit the amount of items customers can buy to prevent other retailers reselling its stock for a profit. In a statement detailing the latest changes to its policies, the company said it was responding to overwhelming demand for its 25p offer.

• Auto Trader updates on trading, says ‘has performed well during the last 4mths’. It adds ‘the Board continues to be positive about the trading environment in which the Group operates.’

Leisure Travel:

• STR Global’s preliminary January 2016 data for London, England, indicates a negative YoY performance. The capital reported a 1.1% fall in demand and a 3.8% decrease in occupancy to 66.6%, while average daily rate was down 1.7% to £121.68 and revenue per available room tumbled 5.4% to £81.04. The 66.6% absolute occupancy level will be the lowest for a January in London since 2013, if proven correct.

• UK visitor numbers are being driven by significant growth from Asian markets, including Japan, Hong Kong, South Korea, Singapore, Malaysia, Thailand. Q4 2015 figures released by Expedia show demand from the six Asian markets has more than doubled year-on-year.

• Business travel company Hogg Robinson has noted promising trading in H2 despite ‘strong competitor pricing.’ The firm is on track to hit market forecasts despite ‘softness in parts of Europe’ and said in a statement: ‘We continue to actively manage the business against the ongoing backdrop of a move to online adoption and strong competitor pricing, while ensuring that we continue to deliver excellent service to our existing clients at all times.

• ‘Our pipeline of new business opportunities remains strong and we see ample scope to grow our business profitably. The company’s financial position remains robust and cash generation across the group has remained strong through the period.’

Other Leisure:

• Alibaba has bought nearly 33 million shares of online daily deal service Groupon, sending the latter’s shares rocketing up by more than 40% yesterday.

Finance & Markets:

• UK inflation rose to a 12mth high of 0.3% in the year to January reports ONS. Says year ago falls in petrol prices were not repeated

• UK house prices rose by 6.7% in calendar 2015 reports the Office for National Statistics. Though this is materially ahead of inflation (at just 0.3%) it does represent a slowdown on last year’s 9.8% increase. Prices rose by 7.3% in England last year whilst in Scotland they actually fell by 0.2%.

• World markets: UK mostly better yesterday but Europe down. US up as it caught up post-holiday but Asia down in Weds trade

• Oil price up a smidge after giving up much of its gains yesterday on disappointment over lack of production cuts

Retail Roundup from Nick Bubb:

Signet: 
Ever since Signet moved its main stockmarket listing to the US in 2008, to reflect the fact that most of its business was in the US, there has been speculation that it would lose interest in its UK jewellery chains (Ernest Jones and H Samuel) and after the big Zale jewellery acquisition in 2014 the UK seemed even more of an afterthought. At Christmas, the US accounted for 89% of total sales, with the UK just 11%. In that light, yesterday’s long-awaited announcement that Signet is to de-list in the UK, because of low trading volumes, was hardly surprising. The last day of dealings in the shares on the LSE is expected to be 14 March, ten days before the Signet Q4 results. With a market cap of about $8bn, Signet is a relatively big beast on the US specialty retail scene and it will be interesting to see in the future if it still feels it is worth retaining a presence in the
UK.

Today’s Press and News: The good Pendragon results yesterday get a fair amount of coverage and are widely attributed to strong sales of used cars. Otherwise the cupboard is a bit bare, but the Times steps manfully into the breach, with a series of stories: Sports Direct founder Mike Ashley has offered to meet MPs and show them around the infamous Shirebrook warehouse; the beleaguered BHS has secured a £10m loan from Gordon Brothers (via a charge over BHS’s leasehold store in Bristol) to help it to roll out the food hall business; Game Digital has moved further into the social gaming event market with the purchase of Spanish-based SocialNAT and landlords of more than 50 Brantano stores could lose £8.3m in annual rent after the footwear chain fell into administration.

John Lewis Partnership Sales Watch: Yesterday morning’s official John Lewis Partnership sales figures showed that last week (w/e Feb 13th) was again very solid for John Lewis and a bit weak for Waitrose. A year ago poor Electricals sales were holding John Lewis back, but last week they bounced by 15.6%, pulling total sales up by 7.0% (c5.5% up LFL), helped by good Valentine’s Day trade, whilst Waitrose was only 1% up (c1.5% down LFL), despite highlighting that “Shrove Tuesday drove a 77% increase in sales of home baking and…Chinese New Year celebrations meant that Oriental food sales increased by 60%”. This week is school half-term, when Waitrose sales usually dip, as many of their customers disappear off on holiday…Nick Bubb – nicholas_bubb@hotmail.com

Tuesday Wrap:

This was produced for distribution yesterday afternoon: 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:

Brexit:

• Last seen, the odds favoured us staying in.

• And we would be big buyers of that (dependent on price) and, when the date of the referendum is announced, we could have live prices & take a position

• However, for the record, it would appear as though business leaders would prefer that we stay in

• And the young (who admittedly aren’t as good as their older relatives at hauling themselves down to the polling station) also want us to remain a part of Europe

• Hence we could (just could) see economically inactive older people voting for us to leave the EU potentially against the wishes of their (lazy when it comes to voting) peers

• The older generation could (just could) then pop its clogs and leave younger people and the economically active to deal with the consequences

• Democracy, don’t you just love it?

Punch & Enterprise:

• Punch’s shares fell sharply yesterday in an apparent partial-unwinding of its outperformance (at least versus Enterprise) over the last few months

• But today (at time of writing) the shares are up 6%.

• Langton is beginning to suspect that this is the work of a wide-spread between bid and offer prices rather than to any fundamental factors

Inflation:

• ONS reports UK CPI rises to 0.3% in January, highest level since Jan last year and up from 0.2% last month.

• Restaurant & hotels annualised inflation 1.6%, down from 1.7% in year to December. The number is at a 20yr low

• The Bank of England recently said that inflationary expectations were roughly flat

• It has ‘blamed’ its undershooting of the official 2% target mostly on moves in commodity prices

Oil prices:

• Some saying that it could rally to c$50 before the end of the summer

• And, having fallen from $120 to $30 over little more than a year, that’s entirely plausible

• In fact it’s more than that, it’s likely

Random information, hopefully not all of it useless:

• We were going to mention that red wine staves off dementia but, as we are strictly beer-drinkers around here, we forgot

• Equity rally following through (at least at time of writing). Looks set to record third straight up-day. US should have a bit of catching up to do & is forecast to open positively.

• Volatile markets. Bears will suggest sharp rallies are a feature of bear markets but, when they happen, they can be abrupt and painful for short-sellers.

• Goldman Sachs Asset Management says we’re at the bottom & that prices may recover from here – or at least stop going down. And it’s not like they would have an agenda, right?

• It was a ‘risk-on’ type of day yesterday with recently bombed out stocks performing well. Under-performers included ‘near-cash’ stocks such as SAB Miller and Rexam.

• Gold falling over last day or so. Recent chart looks impressive but shorter term moves have been down.

• Gold price flirted with $1,250 then fell. Traders said there was support at $1,232. In reality, not so much. Now trading at around $1,205 having been below $1,190 earlier in the day.

• Sugar price now looking really rather weak. Politically it’s out of fashion but still an important input for a number of other food products.