A Day in the Life:

So when you’re going on holiday, are you like us, do you shop around for weather forecasts until you find the best one?

Very human but pointless but, I would contend, that’s not such a stupid thing to do.

I mean I know that the weather will be the weather whichever forecast you alight upon but, that being the case, isn’t it better to be in a good mood ahead of a holiday rather than a bad one?

Because I’d maintain that it is. If you think the weather’s going to be awful then you’ll just mope around and threaten to cancel it and the like and that just strikes me as a waste of time & effort as it doesn’t change anything. Unless you decide not to go, of course, and then you’ll be tempted to check the conditions every day to see what you’re missing.

Anyway, weather permitting, Langton is on or near a beach next week. Shortened email but otherwise little change given that even the licensed hut that we’ll be staying in can afford WIFI. On to the new:

The News:

Pub, Restaurant & Drinks Producer News:

• Enterprise updates on H1 trading ahead of capital markets day, says LfL net income +1.5% in 25wks to 19 March.

• ETI update. Says its ‘implementation of strategy [is] progressing at pace’ and says its leased estate has been ‘reinvigorated’

• ETI update: Group now has 245 commercial properties with an annualised average rental income of £58k per site.

• ETI now operates 60 managed units and has announced a new managed expert partnership with Laine Pub Group.

• ETI to buy back up to £25m of its shares. Says ‘we are making good progress.’ CEO Simon Townsend adds ‘the expansion of our managed operations and commercial property portfolio is on track.’ He says ‘we are confident that the delivery of our strategy will provide a clear path to maximising shareholder value and are today outlining a returns-based approach to the allocation of available capital. The announcement of a share buyback programme demonstrates our approach and underlines our confidence. We remain on track to meet our expectations for the full financial year and look forward to outlining the progress we have made in more detail later today.’

• JDW buys back another 500k shares at 701p.

• Mitchells & Butlers is to hold a craft keg festival showcasing British breweries at its 115 Castle sites from 3 April to 26 June, with BrewDog and Meantime providing some of the drinks on show. Ben Lockwood, craft beer and cider procurement manager at M&B, told PMA: ‘There’s a huge appetite for craft beer at the moment. It’s the perfect time to do one of the largest ever craft beer festivals in the UK and with all 115 Castle pubs taking part, it’s a sure way to attract more beer enthusiasts to our pubs.’

• US burger chain Five Guys has overtaken Nandos as the UK’s most popular fast-food chain just two years after entering the market, according to a survey of 4,565 customers. Meanwhile, Pret a Manger was ranked the country’s favourite café while Caffe Nero leapfrogged Greggs into second place, closely followed by Costa Coffee and Starbucks. Pret was also voted the country’s top sandwich chain, followed by Subway and Greggs.

• The British drinks trade is reportedly preparing to question the science behind the government’s new drinking guidelines.

• The BBPA is organising the ‘Pub Industry Energy Symposium’ in order to help operators find energy-related cost savings. Aimed at those with key operational roles within their companies, the event takes place at the DoubleTree by Hilton West End, in Bloomsbury, Central London on 5 May. CEO Brigid Simmonds said of the symposium: Energy policy is becoming an ever bigger issue for pub operators, and there are many changes coming down the tracks. I hope those within pub operators responsible for their energy policy and purchasing will take advantage of this unique opportunity to keep on top of these big issues.’

• Website Stay In A Pub has launched a set of best practice guidelines for pubs with accommodation online. Compiled in association with VisitEngland and Eviivo, the guidelines are part of an ongoing drive to support the pub accommodation sector.

• City Pub Company has purchased the four storey Varsity pub on London Road, Southampton, for £1.525m. Clive Watson, chairman, commented: ‘We’ve been looking to get into Southampton for quite a while and are delighted that we have acquired a great freehold. The site will be refurbished and we hope to re-open it sometime during the late summer.’

• Burger King’s Waterloo Station branch can now serve beer not more than 5% abv in plastic containers between the hours of 11am to 8pm. ‘It’s very successful everywhere else so we’re just catching up with the rest of the world really,’ said a spokeswoman for Burger King. ‘It’ll probably be an American beer to fall in line with the brand.’

Thomas Cook Q2 Trading Update:

• TCG updates on H1 trading, says ‘winter 2015/16 is closing out as expected, with 90% sold and higher pricing’.

• TCG Q2: Says ‘summer 2016 is 40% sold, with bookings below last year as we continue to prioritise margins over volumes’.

• TCG says ‘market conditions remain challenging, with consumer confidence affected by continued disruption in certain key destinations’

• TCG reports ‘our early moves to rebalance capacity have seen us benefit from higher demand for Spain and long-haul destinations’. It says this is ‘limiting the downside from lower demand to Turkey’.

• TCG reports some evidence of later bookings. Says it is ‘doing all the right things as a business’. CEO Peter Fankhauser reports ‘Thomas Cook continues to operate in a volatile market environment. We know that customers want a summer holiday but we can see that some are leaving it later to book this year as they consider their options.’ He continues ‘I remain confident that we are doing all the right things as a business.’

• TCG says recent market disruption has enhanced value of packaged tours as customers ‘feel safer in our hands.’ CEO Fankhauser says ‘the early actions we took to move flights away from Turkey, Tunisia and Egypt have positioned us well for increased customer demand to resorts in the Western Mediterranean, with strong sales to the Canaries, Balearics and the Spanish mainland in recent weeks. We have also seen an increase in sales to long-haul destinations such as the USA and Cuba as customers look further afield for their holidays.’

• Thomas Cook maintains ‘we remain focused on delivering our strategy for profitable growth. Sales to our own-brand hotels have continued to increase while customer satisfaction is significantly up across all our markets. I am particularly pleased about this given the huge amount of work that our people have put in across all areas of the business. I am confident that, in spite of the current market conditions, the actions we are taking to implement our strategy will continue to deliver improved results.’

• TCG the numbers. No P&L but re Winter, bookings overall down 3% with selling prices up 3%. Summer is 40% sold (down 2pps on last year) with prices ‘firm’. It says ‘the uncertain geopolitical environment is causing some customers to postpone booking their holidays, leading to a later booking pattern.’

• TCG Q2: Western Med up, also US & Cuba, with Turkey down. Group had anticipated these trends.

• TCG conclusion. Group says ‘bookings continue to be disrupted by a volatile geopolitical backdrop’. This is delaying some bookings – though the group is only 2pps behind last year – ‘as some customers postpone their holiday decisions, leading to a later booking pattern for the Summer season.’ TCG maintains ‘we believe that underlying demand for our holidays remains strong’ and it says ‘we remain well positioned in this challenging market, with the scale and flexibility to offer our customers a wide choice of destinations.’

• TCG conclusion. Says ‘we…maintain our previous guidance for the full year, but as highlighted at our last update, this is dependent on seeing a sustained recovery in customer confidence as we progress through the Summer season.’

Leisure Travel:

• China tourist numbers on the up. FT reports drop in visits to HK, Macau, but rise in numbers further afield.

• WTTC says Chinese tourists spent $215bn outside mainland China in 2015, up 53% on the $140bn spent in 2014. Shows an acceleration in what was already an upward trend. WTTC says ‘outbound tourism is growing like crazy.’ WTTC’s CEO David Scowsill reports ‘there were some significant shocks last year, in the stock market and the currency, but it didn’t slow the growth of travel and tourism. Once people have started to travel, they are reluctant to give that up.’

• TCG JV with Fosun was established to service the above rapidly-growing market. Tourists are now travelling to more long-haul destinations. The WTTC registered “severe declines” in China tourism revenues in 2015 in Macau (down 32%), South Korea (down 10.2%) and Hong Kong (down 8.4%).

• Starwood Hotels has agreed an improved takeover bid from Marriott International worth $13.6bn following Anbang’s rival offer. The deal would make for the largest hotel company in the world, despite seeing Starwood’s timeshare business get spun off and acquired by Interval Leisure Group. Bruce Duncan, chairman of of Starwood, said: ‘We are pleased that Marriott has recognised the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders. We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment.’

• Marriott expects comparable LfL systemwide RevPAR to rise by 2-4% in the first quarter of 2016 and of between 3% and 5% for the year as a whole. Arne Sorenson, President and Chief Executive Officer of Marriott International, commented: ‘We feel good about how the first quarter RevPAR and unit growth are shaping up.  Our 19 lodging brands continue to deliver great returns, making them attractive to lenders as well as owners and franchisees.  Even excluding the Starwood acquisition, we expect our gross room additions will grow our system by 8 percent in 2016, outpacing our 7 percent growth last year which included the Delta transaction.’

• The US hotel industry reported growth in average daily rate (+3.6% to $120.80) and revenue per available room (+2.8% to $74.50), although occupancy continues to fall. ‘RevPAR growth was below the long-run average of +3.1% for all Februarys in our system,’ said Jan Freitag, STR’s senior VP for lodging insights. ‘The last time February RevPAR growth was +2.8% was in the year 2008, when we were on a downward trajectory, and this is certainly not 2008.  But it’s just not great.’

• Gatwick is ready for a record Easter holiday period, with some 2.2 million passengers forecast to travel between 25 March and 10 April. The figure represents 5% growth on last year, with Barcelona, Geneva, Dublin, Madrid, and Amsterdam proving to be popular destinations.

• UK travellers are facing more disruption on the second day of French air traffic controllers (ATC) strike action. The union is striking over a cap on recruitment, pay, and a lack of investment in systems and employees.

Other Leisure:

• 888 Holdings saw LfL revenues rise 12% to $507.7m for the year ended 31 December, with adjusted EBITDA dropping to $80.6m due to VAT measures. The group reassures that current trading is strong with average daily revenue in Q1 20% higher than the corresponding period last year, and 888 concludes: ‘With our excellent operational momentum, leading online gaming brands and technology edge, the Board remains confident of delivering long term sustainable growth and we look forward with confidence as we continue to develop 888.’

Finance & Markets:

• A Brexit would cause a ‘serious economic shock’ that could cost the UK £100bn and nearly one million jobs, according to the CBI. Director general Carolyn Fairbairn added an EU exit following the referendum on 23 June ‘would be a real blow for living standards, jobs and growth’.

• Moody’s however reports that the impact of the UK leaving the EU would be ‘small’ with minimal job losses. It believes that the UK could also be allowed to keep many of its trade terms with the EU allowing Vote Leave to interpret its comments as confirming that economic warnings from pro-EU groups “baseless scaremongering”.

• UK markets down a little yesterday, Europe also lower. US up later in the day but Asia mostly lower in Tuesday trade

• Oil price up over 24hrs but weakening a little. Currently trading around $41.50 per barrel.

Retail Roundup from Nick Bubb:

Today’s Press and News: There was plenty of Retailing news out yesterday, including Tesco’s launch of a range of “farm brands” and the announcement that Nick Wood is to step down as the CEO of Pets at Home, but the man in the spotlight today is Mike Ashley, after his appearance on Sky TV calling MP’s “a joke” and the exclusive interview in the Times today, on a visit to Sports Direct HQ in Shirebrook, in which he admits, sensationally, that “We are in trouble, we are not trading very well. We can’t make the same profit we made last year”.

News Flow This Week: Today has brought finals from companies as various as Jimmy Choo and the struggling menswear group Bagir, whilst Majestic have announced that Naked Wines has hit the £100m in sales milestone for y/e March, and the pace of company news accelerates ahead of the long Easter weekend, with tomorrow bringing the Kingfisher finals, the Game Digital finals and the DFS interims (as well as the vital BHS CVA vote), whilst on Thursday we get the Next finals and the Signet Q4 update (as well as the ONS Retail Sales figures for February). Nick Bubb – nicholas_bubb@hotmail.com

Monday 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:

DOMINO’S PIZZA POLAND:

• Spotting a success story is always something of a challenge because, like calling a bubble, it’s most easily done with hindsight and, as we’re meant to be in the prediction game, that’s not particularly useful.

• However, we would suggest that DPP is getting things right.

• At the group level, the company is still losing money but, as it rolls out its units, this should change.

• Indeed the company is currently profitable at the store level and, as it says it will open a ‘substantial’ number of new units this year, it should only be a matter of time before the stores’ profits feed through to the bottom line.

• Chairman Nick Donaldson writes ‘your board believes that the strong performance of our stores, existing and new, plus the contribution of the commissary will continue to build over the coming year and that 2016 will be another important year for this business.’

SUGAR TAXES:

• So Mr Osborne seems to be in the firing line.

• And this may be centring on relations with IDS and the left (and strangely enough the Brexit parts) of his party, but his suggestions on sugar taxes have also come in for some criticism.

• First, the industry seems to be considering launching a legal challenge. This has apparently already been successful in Finland and Denmark and, after the Scottish Assembly failed to make minimum price legislation for alcohol stick north of the border, this may cause problems.

• And second, and rather understandably, the soft drinks industry is saying that it is unfair that sugar is only being attacked in fizzy drinks and not in fruit drinks, milk-based drinks or in processed food.

• All of which suggests that the game is not over and that, however laudable may be the desire to reduce the obesity problem across our country, this may not be the easiest way to go about it.

JD WETHERSPOON’S SHARE BUY BACK:

• JDW has been putting its money where its mouth is.

• Today it announces that it bought back another 85k of its own shares on Friday, these at 700p.

• The group has now this year bought 1.46m shares for cancellation for £9.6m, an average of 656p per share.

• See our comments last week for the scale of JDW’s buyback over the last decade or so.

CURRENCIES:

• Sterling bouncing vs both Euro & US$.

• But more so against the US$ as this is currently a story about US$ weakness rather than Sterling strength

• This has implications for commodity prices which, as they are priced in US$s, tend to go up in price (at least in terms of the US$) when the dollar falls

• Most heavy users of foreign currency and commodities, for example the tour operators (users of aviation fuel, which is priced in dollars, and accommodation, which is often priced in Euros), will have hedged forward both their commodity and their currency exposures for at least the next season – and probably two.

COMMODITY & INPUT PRICES:

• Oil price down a little over the weekend, trading at present at around $40.90 per barrel.

• Re oil, the US rig count rose last week (apparently) for the first time since December.

• Gold price also down a little. Trading at around $1,243.50 per ounce suggesting that the gold / oil ratio is currently unchanged at around 30.4 barrels of oil per ounce of gold.

RANDOM INFORMATION, HOPEFULLY NOT ALL OF IT USELESS:

• A down-day today but the S&P in the US is now up for 2016 as a whole.

• All 3 FTSE indices are now ahead of their 50dy moving averages.

• Travel stocks a little better on Friday (oil price down) and recent fallers (ETI, MAB, WTB) also bouncing. Break-up rumours (really a spin-off of Costa) probably did WTB’s share price no harm.

• Whitbread converting its Taybarn units to Brewers’ Fayre. WTB is an excellent incubator of businesses, witness Costa, but Taybarn (arguably, being an all-you-can-eat offer) didn’t look like a runner.

• CPI numbers tomorrow

• Interesting to see the FT comment re Argos “Steinhoff executives concluded that they could not acquire the assets of Argos at a price that would offer shareholders an adequate return”.

• Next. Numbers on Thursday. Press not supportive, could be that halo is slipping a little?