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:

Gregg’s FY numbers:

• Numbers look good despite the fact that the co is now lapping tough comps.

• The group’s shares stumbled (after a tremendous run) at the end of Q4 when Gregg’s reported that LfL sales were +4.7% for the year.

• They had been up by 5.6% LfL at the end of Q3 (they were +4.9% in Q3 itself) suggesting that there had been a sharp slowdown in Q4.

• Today, the group is able to say that ‘this year has started well and like-for-like sales in the eight weeks to 27 February 2016 have grown by 4.2 per cent, with total sales up 6.8 per cent.’

• Gregg’s says ‘the consumer outlook remains positive with disposable incomes expected to grow further in 2016.’ It adds ‘overall 2016 will be another year of significant change as we advance with our strategic plan and propose major investment in our supply chain.’

• Gregg’s concludes ‘we are confident of delivering a further year of underlying growth. The Board’s expectations for the year ahead remain unchanged.’

• We would suggest that 1) there has been an improvement (at least in LfL sales) between Q4/15 and Q1/16, 2) this may be due to pricing (as there is no mention of margin) but, if we take it at face value, it is a very good performance

• And Gregg’s shares have responded positively. They are up 127p (+12.3%) at the time of writing.

• This puts them, at 1158p, on around 19.6x suggested earnings for the current year which, for a pie shop, looks a little stretched.

Input prices:

• Oil showing some signs of life, holding well above the $36 mark at $36.83 (at time of writing) and challenging recent high (intraday) of around $37.00 on 26 Feb.

• Oil continued. This is micro-analysis as far as timing is concerned. Chartists maintain that the longer term trend is still down but this is how rallies happen. Like bull markets, they ‘climb a wall of worry’ at the end of which, hey presto, prices may have partially recovered.

• Commodity of the Day – Copper: You don’t get much copper in a meat pie, not on purpose at least, but it’s often a good indicator as to how prices are faring up in the non-precious metals space.

• Copper continued. And here we have some evidence of stabilisation. Prices troughed at around 194c per pound back in January and they are now 213c per pound. Prices were over $4 per pound in early 2012 but, nonetheless, chartists will be suggesting that maintaining prices over say 215c look bullish for the future.

• Volatility levels in soft commodities may be diminishing. This would make some sense if the products’ initial drop were due to China fears. The markets may be waiting for further news to move prices firmly either one way or the other. Most observers may be betting on that being upwards – and hopefully not simply because they are being seduced by the fact that most charts are not logarithmic and therefore they suggest, wrongly, that prices cannot go down in percentage terms forever.

Random information, hopefully not all of it useless:

• Big companies reporting numbers this morning seem to have gone down (Barclays, Glencore) whilst smaller companies (Gregg’s, Just Eat) saw their share prices rise.

• Re the wider markets, the UK held above its 50dy moving average yesterday whilst US markets breached them on the downside. Today’s upward move (at the time of writing) in the UK looks like persuading some observers that we remain in recovery mode.

• Just Eat uses the word ‘excellent’ and shares go up by 5%.

• Travelodge numbers good, has plans to grow. Does this threaten to put more pressure on Whitbread’s Premier Inn chain? London market is slowing and extra capacity being put on by a competitor will not help matters.

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

1. Gregg’s FY numbers. Says has turned in an ‘excellent operational and financial performance’. Sales +5.2% at £836m.

a. GRG FY: Managed LfL sales +4.7% over full year (after +4.5% last year). PBT +25.4% at £73m. Dividend up 30% to 28.6p

b. GRG FY: Says has seen strong cash generation that has supported capital investment & has paid a £20m special dividend

c. GRG FY: Says 202 shops refurbished in the year, 122 opened, 74 closed. Has 1,698 shops at year end

d. GRG says ‘this year has started well and the consumer outlook remains positive with disposable incomes expected to grow further in 2016.’

2. Just Eat FY numbers. Says is ‘excellent performance’ and ‘momentum continues into 2016’. Orders +57% to 96.2m, revenues +58% to £248m.

a. Just Eat: Underlying EBITDA +83% at £59.7m, adj. +57% at 6.6p, says ‘strategy of continuing investment for long-term growth is delivering’

3. Revolution H1 numbers: Sales +2.2% at £59.2m, EBITDA £7.9m vs £7.6m, PBT £4.7m vs £4.3m. EPS 8p, H1 DPS 1.5p

a. Revolution: Says has opened 3 new Revolución de Cuba bars in H1. Estate is now 60 units with 2 more planned for H2.

4. McColl’s Retail reports FY numbers. Sales +3.1% at £932m, LfL sales for FY down 1.9%. Underlying EBITDA up to £37.7m (2014: £37.3m)

5. Wagamama CEO David Campbell believes the expanding chain will become a global brand ‘by the end of the next decade’.

6. Starbucks is ready to open its first store in Italy ‘with humility and respect’ early next year

7. New data from reservation platform Bookatable suggests this Sunday will be the biggest Mother’s Day yet for restaurants.

a. Mothers’ Day now more important than Christmas (Day at least) for some pubs.

8. PPHE Hotels announces will acquire 80% interest from its joint venture partner in Croatia.

9. Hilton is to spin off its lodging properties & timeshare business into a separate listed entity, effectively a REIT

10. Travelodge reports FY numbers, says EBITA exceeded £100m in year to end-Dec for first time in group’s history

a. Travelodge FY numbers. Revenue £558m, REVPAR +11.7%, room rates +10.2% and occupancy +1.0 percentage point

b. Sale of Travelodge for figure in the region of £1bn effectively put to one side for the time being per Times

11. Research from ATPI Group and ITM shows that buyers are forecasting a ‘confident outlook’ for business travel in 2016.’

12. Data yesterday showed Eurozone inflation has fallen back into negative territory as CPI down 0.2% in 12mths

13. Yanis Varoufakis, self-professed “erratic Marxist”, is reported to be advising Jeremy Corbyn’s Labour Party in the UK