Langton Capital – 2016-03-16 – Wages, crowd funding, cruise market, Budget & other:
A Day in the Life:I think it must be because time passes so slowly when you’re little but I used to spend the period to at least March every year writing down the wrong date as my then-little (and now not much bigger brain) struggled to accept that the year had changed and that time had moved on. But that doesn’t seem to happen now. And it’s not a skill, getting the year right pretty much from January 1st, because I think it must be a sign that you’re getting older and that time now passes so quickly that the evolution of one year into the next is simply no big deal at all. But it is what it is, I suppose so, firm in the knowledge that it’s 2016 and that it will be for another ten and a half months or so, let’s move on to the news: The News:Pub, Restaurant & Drinks Producer News: • JDW buys back more shares, retires 80k at price of 697p. Takes recent totals to 1.37m retired for £9m (av. 653p). • JDW has retired around 1.2% of its equity in the latest round of buybacks starting in Jan this year • The ALMR has called for the government to clarify details of future wage increases in order to provide visibility for the hospitality industry. ALMR Chief Executive Kate Nicholls warned: ‘If businesses are to have any chance of absorbing theses costs then we need time to allow these increases to settle in. That means no additional increases to the rate of either National Minimum Wage or the National Living Wage until businesses have adjusted to this change. The next review of rates by the Low Pay Commission must be conducted in the round and the dates of changes aligned going forward. We cannot continue to have two dates for different rates. • ALMR and wages. ‘The Government has stated that is considering synching the rates of both the Minimum and Living wages. Confirmation of when this is likely to occur will provide employers with some stability and transparency and it would be sensible for this to be an April change. By delaying any further increases in the rate of National Minimum Wage until April 2018, and synching the rates at that time, we can avoid a situation whereby we have two increases in a short space of time to help provide stability for businesses.’ • Pull’d has launched a second crowdfunding campaign with a target of £350,000 in exchange for 36.42% of the diner’s equity. A total of 13 investors have so far raised £13,890, £10,000 of which comes from a single source. The restaurant raised £100,000 last year but is now seeking new funds to open a second site in the City of London. • New research from PwC and The Local Data Company shows that takeaway food stores and coffee shops continue to flourish. Overall net closures halved in 2015, from 987 to 498, falling to their lowest level since 2010. American-themed restaurants (+37 sites), food stores (+45) and coffee shops (+80) all enjoyed a strong 2015. • Evolving trends have led the ONS to drop nightclub prices from its official inflation figures, with many sites closing down or moving to free or low-cost entry. • Scientists claim to have found a new way to use natural chemicals in beer hops to potentially help fight cancer and other diseases. Cancer-fighting compounds found in beer hops are now being extracted and duplicated synthetically to increase their reliability, according to a team of researchers presenting a study at the National Meeting & Exposition of the American Chemical Society in San Diego. • Gruppo Campari is to purchase French-based spirits producer Société des Produits Marnier Lapostolle (SPML), the makers of Grand Marnier, for €684 million. Campari has acquired 17.19% of SPML’s shares, and intends to gain majority control via a tender offer on the French stock exchange. • Would-be customers of BrewDog’s Dog Eat Dog hotdog concept say they have found the brewer’s London Islington site unexpectedly closed, writes PMA. • Input prices. Milk price slipping again after attempt at rally. Price at Farm Gate now around 23p vs 34p in Nov 2013 • Sports retailer Go Outdoors is moving into cycling with its Go Cycling department set to be introduced in its UK locations by the end of May. • Big firms including Tesco and Whitbread are cutting recruitment and staff perks and slashing overtime, ahead of the new National Living Wage. Leisure Travel: • The British cruise market is closing the gap on Germany as Europe’s premier cruise nation, according to industry figures for 2015. • Eurostar profits have been hit by the November Paris attacks and a strong pound, falling from £55m to £34m for 2015. Passenger numbers remained stable at 10.4 million despite a ‘sharp drop off’ following the terrorist attack on the French capital. Eurostar CEO Nicolas Petrovic said: ‘After a challenging end to 2015, trading is picking up and the outlook for the summer is positive. With our new state-of-the-art trains and highly competitive fares to a range of destinations, we expect this trend to gather momentum over the coming months.’ Finance & Markets: • The Chancellor George Osborne will present his latest Budget to the House of Commons at 12.30 today. • The US Federal Reserve meets yesterday and today. Odds are distinctly against an interest rate rise • World markets: UK & Europe down yesterday. US also lower and Far East down in Wednesday trading • Oil price holding around $39.15 per barrel Retail Roundup from Nick Bubb:
News Flow This Week: Retail Week Live Watch: As noted above, the big 2-day industry conference “Retail Week Live” starts today out at the O2 Centre and the first keynote speaker is a late replacement for Dave Lewis from Tesco, namely Matt Davies from Tesco UK. He’s followed by a presentation on “Tackling A High Performance Culture” by the rugby coach Clive Woodward, then a presentation on “Thinking differently to deliver profits without losing your brand value” from the CEO of Virgin Atlantic and then a presentation on “How Starbucks have been brewing up innovation”. After umpteen break-out sessions, the day then concludes with a keynote speech from Darren Topp, the CEO of BHS…and an interview with the great Ray Kelvin of Ted Baker. 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: JD WETHERSPOON: • Group still buying back shares. • Bought back 50k at 699p on Monday. • Takes recent total to 1.29m shares for £8.42m (av. 650p per share). • Recent buy-back commenced in Jan with the purchase of a whopping 625k shares at the bargain basement price of 613p. • Group is clearly putting its money where its mouth is. • As long as this continues, we are unlikely to see a blip-up in the rate of new builds. • Co said at its H1 numbers that ‘around 15 unite per annum’ could be the norm for a couple of years at least. TOURISM & TERRORISM: • Egyptian authorities saying that tourism flights to Sharm will resume ‘sooner rather than later’. • We’d bet modest money that that turns out not to be the case. Bombs in Ankara (yes, we know that’s in Turkey rather than Egypt) will not help • Holiday programmes have been re-scheduled (at great effort but at modest financial cost) and this won’t flip on a sixpence • Perhaps such comments should be caveated or asterisked with the words ‘this is our hope rather than our expectation’. • Elsewhere, the Western Med is selling out and, with margins thus firming, the holiday majors should be heading towards a satisfactory summer season HOTEL CYCLES: • We see nothing to dissuade us from the view that the UK hotel cycle, particularly that in London, is past its peak • STR yesterday reported that, regarding new-build, there were ‘163,826 rooms in 1,139 hotels Under Contract in Europe’ • It says ‘the total represents a 14.9% increase in rooms Under Contract compared with February 2015 and an 8.6% year-over-year increase in rooms In Construction.’ • Capacity is therefore on the up. • STR continues ‘among the countries in the region, the United Kingdom reported the most rooms under construction with 14,785 rooms in 178 hotels.’ • The number of rooms under construction in the UK was 1.5x that in Germany, an economy that is around 1.5x that of the UK • REVPAR looks to be still rising but, with occupancy under downward pressure, we would expect rates to follow at some point this year RANDOM INFORMATION, HOPEFULLY NOT ALL OF IT USELESS: • Equity prices down today after rise yesterday. Whitbread putting in a bit of a bounce but Restaurant Group rather less so. Share price still pants. • Betting stocks down yesterday as somebody realises there’s a Budget tomorrow. • Oil price off the ‘top’ & trading around $39 per barrel. • Gold-Oil ratio reasonably stable as the prices of both commodities fall. Ratio now means takes 31.9 barrels of oil to buy an ounce of gold. Yesterday it was 31.6. • Gold price off the top. Trading at around $1,233 per ounce. Once again fails to break through the c$1,280 level. • Soft commodity prices up a little on US$ weakness. |
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