Millennium & Copthorne, Punch, pub spending & other:

A DAY IN THE LIFE

Languages tend to evolve and words take on different meanings over time.

There are too many examples to run through in depth (nice, silly, gentle, myriad, decimate etc.) but, at the moment, the word that seems to be coming under the most pressure to ‘evolve’ is ‘truth’.

Now as an accountant (yes, honestly) I know that the word ‘fair’ came in for a bit of a battering around the time of the dot-com boom and the credit crunch but, I would suggest, ‘fair’ isn’t really an absolute whilst ‘truth’ is.

And we can point the finger at politicians. Indeed we perhaps should. Ms Clinton swore in front of billions of TV viewers that she lept from a helicopter in the former Yugoslavia under sniper fire and, with Messrs Trump, Farage etc., where do you begin?

Indeed ‘great’ (as in make America great again) used to mean big, thick or coarse but the commercial world is hardly blameless in its twisting of meaning. A pizza company tells us its mission is to ‘surprise and delight’ (rather than stun and impoverish) its customers and Marketing Week suggests people buying a bun really want to ‘interact with the sales team’.

Anyway, it’s been a busy week so, with the weekend to look forward to, let’s move on to the news:

PUB, RESTAURANT & DRINK PRODUCERS:

The Competition and Markets Authority has launched its investigation into Heineken’s proposed acquisition of 1,900 Punch pubs, the first phase of which will last until 24 April. A spokesman for Heineken said: ‘This morning’s announcement confirms an important and fully expected stage in the process to finalise our acquisition of the Securitisation A pubs from Punch, and Heineken will be fully co-operating with the CMA.’

The latest Family Spending Survey from the Office for National Statistics shows that families in the UK are spending less on cigarettes and alcohol and more on restaurants. There was little change in overall spending, with families using up an average of £528.90 a week.

Nando’s has widened the gap on competitors as the nation’s number one restaurant chain brand for dinner, per MCA data. The MCA’s Q4 2016 report also found Frankie & Benny’s fell from 2nd to 3rd, being replaced by PizzaExpress.

London based fitness food group Protein Haus is to open a further two sites in the capital, reports the MCA. The group is set to run a crowdfunding round to finance its expansion. The concept is targeting high footfall transport hubs and Waitrose supermarkets.

Groupon beats analysts’ estimates as sales reach $934.9m in Q4. Five million new customers subscribed in the US, with total global customers at 52.7m.

Ei Publican Partnerships is boosting support for its publicans looking to access independent advice on their business rates. The new revaluation is effective April 2017 and represents a significant shift in overheads for many publicans. A competitive success-based fee has been negotiated by Ei with advisers Colliers, Harris Lamb, and Lambert Smith Hampton, with payment only made if rates are reduced.

Simon Millar, Estates Director at Ei Group, said: ‘We recognise that the changes to business rates will be a concern to our publicans and we are determined to offer them the best support possible to help them navigate their way through the appeals process.

‘In the past, we have heard of circumstances of publicans being cold-called by perhaps less scrupulous advisers, which is really not how we would prefer our publicans to be accessing business rates advice. Some of these less reputable firms give a relatively poor service and take a large up-front, non-returnable, fee from publicans.’

Cashless stores, ordering food via an app, and an increase in healthy living will be key Millennium & Copthorne reports Q4 & FY numbers, says total revenue +9.3% £926m (aided by Sterling’s fall).

Wendy’s is to add 1,000 locations by 2020. It has said that these units will be of a ‘smart design’ such that smaller sites can be occupied. The co said ‘the new designs enable the company to build on half an acre or even a quarter of an acre if needed.’ Wendy’s currently has just over 6,500 locations worldwide.

Some 70% of spirits sold in Russia could be ‘surrogate’ alcohol as a result of the country’s widespread illicit alcohol trade.

Disappointing results from Nestle have led the company to unveil a steep cost-cutting plan. Nestle’s profits reduced to 8.5bn francs (£6.78bn) from 9.1bn francs on last year. Nestle CEO, Mark Schneider, stated ‘Our 2016 organic growth was at the high end of the industry, but at the lower end of our expectations’.

LONDON HOTELS: MLC FULL YEAR NUMBERS:

MLC FY: Says ‘pressure on revenue and profit was intense in all of our key gateway cities.’ London much better in Jan 17

MLC FY: Group reports PBT down £1m at £108m. Basic EPS is 24.0p, against 19.9p last year. Dividend +20.6% at 7.74p.

MLC FY: Co says hotel revenue in constant currency declined by 2.3% to £814m in 2016 as a result of lower contributions from the Group’s hotels in New York and Singapore. Chairman Kwek Leng Beng reports ‘our trading performance in 2016 declined with Group RevPAR in constant currency falling in each quarter of the year.’

MLC FY: Says ‘in London, leisure business in the first quarter was impacted by the November 2015 Paris terror attacks and in the second half of the year trading was affected by reduced corporate business.’

MLC FY: Says ‘in the first 31 days of trading in 2017 Group RevPAR increased by 4.5%. London, which had a very poor comparative quarter in 2016, was up by 19.5%. New York was up by 8.9% and Australasia was up by 12.3%. RevPAR for Singapore fell by 5.2%.’

LEISURE TRAVEL & HOTELS:

Two French ski companies have announced deals in China. China is to host the Winter Olympics in 2022. Equipment maker Montagne et Neige Developpement has agreed a JV with China Coal Zhangjiakou Coal Mining Machinery to make ski equipment and Compagnie des Alpes is to partner with China’s Thaiwoo Ski Resort.TripAdvisor disappoints. Q4 numbers came in below estimates & shares, down 11% on last year already, fell by further 5.3%. Co said hotel sales fell by 3.1% to $252m in Q4. TripAdvisor CFO Ernst Teunissen comments ‘as expected, our significant investments in these growth initiatives dampened full year 2016 financial results.’

What’s expected for one person may not, however, be expected by another. TripAdvisor nonetheless comments ‘we believe we turned a corner in the fourth quarter, as growth rates improved, led by the US.’

TripAdvisor reports Q4 profit of only $1 million, down from $3 million a year ago. Unique website visitor numbers were +14% in the summer.

TripAdvisor numbers illustrate disruptor can be disrupted & confirms that, as a financial investment, you need to make money at some point. CEO Steve Kaufer says ‘2016 was an important transition year and one of great progress towards creating the best user experience in travel.’ He says ‘we rolled out hotel instant booking globally and strengthened our position in attractions, restaurants and vacation rentals.’

Record numbers of British holidaymakers are flying long-haul in search of winter sun this school half term, per data released by Gatwick. Almost a third (30%) more passengers than last year will be spending the time in a long-haul holiday spot and passenger numbers at the airport are expected to be 14% higher across the February half-term compared to the same period in 2016.

Luxury operator Carrier had a 9% rise in January peak booking period bookings. This positive monthly performance in bookings comes after a strong 2016 for the company. The top performing destinations are the Caribbean, Europe and Africa.

LDC places £6.5m in the online travel agency Blue Bay Travel, taking a minority stake in the company. The company specialises in long-haul holidays and saw bookings increase 31% in 2016.

The majority of MPs believe post-Brexit air service deals with EU and international countries should be a top priority for the government. A study on behalf of the Airport Operators Association (AOA) found that 86% of MPs agree the UK’s international air connectivity and continuity is ‘more important than ever before’. Chairman of the AOA, Ed Anderson said: ‘The UK was the driving force behind the open and liberal approach to air connectivity within the EU and between the EU and countries like the US and Canada. This move away from the old, restrictive approach to aviation has benefited consumers and businesses alike: more destinations are served from the UK more frequently and at lower fares.’

Between the 5-11 February, the US hotel industry announced negative results in the three KPIs. Y-o-y, occupancy was down 4.4%, ADR down by 1.6% and RevPAR down 5.9%.

UK trains running on time hits lowest level in a decade. The Office of Rail and Road found that 12.3% of trains last year were not on time, the worst figure since (12.5%) 2006.

OTHER LEISURE:

Spotify intends to add 1,000 jobs in New York by 2018 and is moving its headquarters to the World Trade Center in anticipation of its IPO.

Snap Inc, owner of Snapchat, lowered the company’s valuation on Thursday after concern from investors about the unproven business model, slowing growth and overbearing founder control. The company was expected to IPO at $20-25bn but now has been scaled back to $19.5-22.3bn.

MGM China shares fell 3.7% in early Friday trading as its Macau casinos were unable to display a strong recovery in their fourth quarter. Q4 EBITDA for MGM China increased by 5.5% y-o-y, but for the full year fell by 3.8% y-o-y, to HK$4.49bn.

FINANCE & MARKETS:

ECB minutes show that policymakers are willing to look through oil-driven price increases when assessing interest rate policy

World markets: UK down yesterday with Europe & US also lower. Far East mostly down in Friday trade

Gilt yield in UK down a little, 10yrs offering 1.26%

Brent almost static at $55.74

Sterling up a little vs $ at $1.2501 (was $1.2467) but down vs Euro at 1.1714 (was 1.1740)

TODAY IN A NUTSHELL:

CMA to investigate Heineken’s proposed acquisition of 1,900 Punch pubs. Should report back by 24 April.

Families in the UK are spending less on cigarettes and alcohol and more on restaurants per ONS

Wendy’s is to add 1,000 locations by 2020. It has said that these units will be of a ‘smart design’ such that smaller sites can be occupied

MLC FY: Says ‘pressure on revenue and profit was intense in all of our key gateway cities.’ London much better in Jan 17

MLC FY: Says ‘in London, leisure business in the first quarter was impacted by the November 2015 Paris terror attacks’

Two French ski companies have announced deals in China. China is to host the Winter Olympics in 2022.

Snap Inc, owner of Snapchat, lowered the company’s valuation on Thursday after concern from investors

ECB minutes show that policymakers are willing to look through oil-driven price increases when assessing interest rate policy

Later tweets yesterday. What does a roll out do when it’s rolled out? Ask Restaurant Group. Woops. Also, ask PETS. Shares now down 42% in little over a year

Cost expectations at 3yr high. Not a surprise. And why focus on CPI (not RPI). Aren’t housing costs real costs. Joe Public thinks they are

Laura Ashley warns on profits, Dunelm agrees trading challenging. Fewer cushions out there? We’d imagined big ticket would be impacted first

Coffer Peach Tracker shows provincial LfL sales moving backwards in real terms. London ahead of CPI but lagging RPI

Outlet growth to slow (per CGA) but only to 3.7%. Do we really need that many new food outlets? Clue, answer is ‘no’.

Wage growth slows & now negative in real terms if compared with RPI (as we maintain housing costs are real costs)

RETAIL NEWS WITH NICK BUBB:

BDO High Street Sales Tracker: We flagged on Wednesday that the calendar shift of Valentine’s Day had adversely impacted on John Lewis last week and today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains flags that w/e Feb 12th saw Fashion Store LFL sales drop back against last year by 6.9%, not helped by the cold and gloomy weather at the weekend…Including Homewares and Lifestyle chains, total Store LFL sales were down by 6.5%, but overall Online sales were up by 20.2%, on top of 18.8% growth last year.

Trade Press: In Drapers magazine today the Editor focuses in her column on the speculation that the launch of Amazon’s own-label fashion brands is imminent and that “rumour has it that its own-label ranges will aim for the mid-market”, ie M&S and Next country, rather than try to take on Boohoo and ASOS. And Drapers’ main News story is that Amazon has poached design and buying experts from Marks & Spencer and Primark. Drapers also flag their scoop that the “Flash Sale” website SecretSales has been sold to the private equity owned Excalibur Group (the owner of discount deals website Wowcher) for an undisclosed amount. Drapers also highlight that John Lewis has moved its Homeware Buying director Christine Kasoulis into the role of Fashion Buying Director on an interim basis, the Chinese menswear retailer Bosideng has closed its flagship London store at the top of South Moulton
Street and H&M Group has confirmed that the first UK store for its new Weekday fascia will open on Regent Street this summer. Drapers also have a feature on how Cath Kidston’s CEO Kenny Wilson is extending the reach of “the quintessentially British retailer” and an article about how specialist sportswear brands are fighting back (as fashion labels muscle in on the athleisure trend).

News Flow Next Week: The hard-pressed spin-doctors at Asda will try to put their gloss on the weak sales on Tuesday afternoon, on the back of the Wal-Mart Q4 results, with new CEO Sean Clarke soon due to set out his strategic plan. And next week is a big one for the big Retail Property companies, via the Hammerson finals on Monday, the CapCo finals on Wednesday and the Intu finals on Thursday. Wednesday also brings the Hotel Chocolat finals and the outlook for “white van man” will also be in focus on Thursday, via the Howden finals.