Langton Capital – 2017-06-02 – Drink sales, wine prices, UK holiday market & other:
Drink sales, wine prices, UK holiday market & other:
A DAY IN THE LIFE:
Part of Langton is on the Med this week. It’s in Malta. Valletta will be next year’s European City of Culture. It shares that, but little else, with Hull. The daily e-mail will still go out but in a shortened format:
PUB, RESTAURANT & DRINK PRODUCERS:
• Revolution Bars Group has announced that, following a period as Interim Finance Director, Mike Foster has been appointed as Chief Financial Officer and to the Board with immediate effect. The group says ‘Mike brings much experience in large multi-site retail and leisure businesses, including the last 20 years in major pub and bar companies. Most recently, he was Chief Financial Officer of iNTERTAIN Limited. Prior to that, he was Chief Financial Officer of Regent Inns plc from 2005 and held several senior accounting roles at Spirit Group, Esporta plc and First Leisure Corporation. Chairman Keith Edelman comments ‘we are delighted that Mike has decided to join on a permanent basis. We are already benefitting from his leisure sector experience and he has fitted in with the team well.’
• EI Group is introducing a further series of measures to help its lessees and tenanta. It reports that it has launched Pub Principles, ‘a comprehensive and growing series of guides designed to help new and existing publicans with training and best practice.’
• New EI Group guidance to ‘give new publicans the tools needed to create and run a successful pub business’ and to ‘give existing publicans the opportunity to refresh or fine tune their knowledge; and provide marketing collateral to help train managers and employees.’ EI Group’s Steve de Polo comments ‘we know that publicans face a tough job, and we have produced these guides to support them with running their business or training key members of their team.’
• ISWR reports that the rate of decline in global alcohol consumption is accelerating. It says the global market for alcoholic drinks shrank by 1.3% in 2016. The rate of consumption had averaged +0.3% over the previous 5yrs. Still wine consumption fell by 0.5%, cider fell by 1.5% and beer consumption fell by 1.8%. The ISWR reports ‘the global trend is a reflection of developments in three of beer’s largest markets: China, Brazil and Russia, which all saw steeper declines than in previous years, declining at -4.2%, -5.3% and -7.8% respectively in 2016.’
• CLMS reports that takings from fruit machines have fallen by £600m over the last decade. The average weekly take has fallen by 25% since 2007.
• Carlsberg’s specialist wine division Crown Cellars has launched its 2017/18 wine portfolio. It reports that the collection of 500 wines ‘is chosen based on the quality credentials of each wine as well as listening to customer feedback and responding to trends in the market and designed to help on-trade operators’ wine lists stand out from the crowd.’
• WSTA reports that wine price rises have been accelerated by Brexit. Prices are said to have risen by more in the last 12wks than they have in the previous 3yrs.
• MCA reports Motorway service station operator Welcome Break has secured a £440m funding package from a banking syndicate led by Lloyds Bank. The company reports ‘the funding package provided by Lloyds Bank, as part of a wider banking syndicate, gives us a solid platform to further grow our business.’
• PE house Partners Group has invested in Chinese operator Green Tea Restaurant. The operator has 78 sites in 19 Chinese cities
• Tesco is to trial some Curry’s PC World concessions in a number of its larger supermarkets
HOLIDAYS, LEISURE TRAVEL & HOTEL
• Growth in the UK outbound travel market is reported to be lagging growth in other source markets per ForwardKeys. The group reports that the UK market is just +0.1% this year with Germany and the US both +8%.
• Uber announced revenues of $3.4bn in Q1.
• Manchester United is reported set to build on its ranking as the world’s most valuable football club via a number of sponsorship and retail deals. The group spoke at the KPMG Football Benchmark Forum conference saying ‘our pre-tax profits could hit up to £195m this year so clearly being out of the Champions League has made more of an emotional difference than a financial one.’ The group adds ‘there’s also lots of categories we’ve not even entered into yet and an opportunity to attract new sponsors and partners. Partnerships are a great way to make money as our brand has so much history to be leveraged.’
FINANCE & MARKETS:
• UK house prices fell for the third consecutive month in May per Nationwide. The building society says this is the first 3mths consecutive fall since 2009. It reports that prices fell by 0.2% in May and that the annual rate of price growth slowed to 2.1%. This is the slowest pace for almost four years and is behind the rate of inflation. The group cites ‘affordability issues’ and says that this has led to the market “losing momentum”.
• Times reports ‘house price slump triggers fears of new property recession’
• Oil price down another buck or so at $50.23
• Sterling a fraction better at $1.2875 and €1.1475
• UK 10yr gilt yield 1.07%, up 2bps on yesterday
• UK manufacturing PMI fell to 56.7 in May from 57.3 in April.
• Meanwhile Eurozone manufacturing PMI rose to 57.0 in May with German PMI up to 59.5.
• World markets: UK up yesterday with Europe also higher. US up and Asia mostly higher in Friday trade
RETAIL NEWS WITH NICK BUBB:
• B&M: The B&M share price has had a good run and after last week’s finals guess what: the private equity fund Clayton Dubilier has dumped most of its remaining shares, placing 125m shares (2.5% of B&M’s total issued share capital) at a price of 363.4p, raising aggregate gross sale proceeds of £454m (CD&R will be left with a stake of 4.9%).
• Shopping Centre Watch: The shopping centre giant Intu Properties is being ejected from the FTSE 100 index, but we see from the Retail Week website that it has had some good news in the shape of Next, which has agreed to take the big vacant site in the Merry Hill centre in Dudley (that was occupied by Sainsbury until Christmas last year) to convert into a new state-of-the-art flagship. The new 76,000 sq ft Next store (which will feature a full homewares offer, Lipsy and a coffee shop) will open next spring and will be only 6,500 sq ft smaller than Next’s largest store, at the Manchester Arndale centre.
• BDO High Street Sales Tracker: We flagged yesterday that trading at John Lewis last week was very subdued, but today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains flags that w/e May 28th saw Fashion Store LFL sales edge up by 2.2% against last year, helped by a very soft comp and the warm weather. Including Homewares and Lifestyle chains, however, total Store LFL sales were only flat last week. But overall Online sales were up by as much as 29.7% (on top of modest 10.3% growth a year ago).
• Trade Press: Neither Retail Week or Drapers magazines have been published today because of the Bank Holiday…but a week ago Retail Week had a guest Editor, John Roberts of AO.com, with a focus on the “Rising Stars” of the Retail industry. And a week ago Drapers had a special focus on Crowdfunding, flagging that “once the preserve of experimental tech start-ups, hipster breweries and wacky niche products, crowdfunding platforms are increasingly becoming a popular tool for new fashion brands and retailers” and highlighting that Wool & the Gang, SilkFred, Bluebella, Me & Em and The Idle Man have all used crowdfunding to raise money for expansion. Incidentally, Drapers magazine has just been sold by EMAP/Ascential to the Metropolis International magazine group (which owns Property Week magazine, inter alia).
• News Flow Next Week: As we head on into June, next week gets busier, kicking off with the BRC-KPMG Retail Sales figures for May first thing on Tuesday. Tuesday also brings the AO World (aka AO.com) finals, whilst the Shoe Zone interims are on Wednesday. And the much-awaited General Election is on Thursday…