Langton Capital – 2017-06-13 – Merlin, RTN, High St footfall, confidence & other:
Merlin, RTN, High St footfall, confidence & other:A DAY IN THE LIFE: Bit busy today and it’s time for the news. If you would like to come off this email list please simply hit the unsubscribe button above. Similarly, if you are getting it forwarded and would like to go on directly or if you would like to recommend it to one of your colleagues, please just hit the subscribe button and/or suggest that your colleague does too. PUB, RESTAURANT & DRINK PRODUCERS: • Data released by AlixPartners CGA Peach Market Growth Monitor has reported that new restaurant openings have slowed due to rising input costs, however, managed and branded casual dining operators have continued roll outs. New managed licensed venue openings increased by 2.5% in the year to March, with managed restaurants openings climbing 6% on last year. • The Restaurant Group has announced that it has appointed Paul May as a Non-Executive Director. The Company also today announces that Sally Cowdry, Non-Executive Director, will be retiring from the Board on 31 August 2017. RTN comments that ‘as part of the Board’s succession planning, the Company intends to recruit one further Non-Executive Director in due course.’ • Consumer spending fell year-on-year in May by 0.8% reports Visa. It is the first fall in nearly four years. • Outlook for some high street restaurants a little tougher as bricks & mortar gives further ground to online spending. Footfall said to be down 2% in May. Visa comments, however, that its spending on hotels, bars & restaurants rose by 3.3% despite falling spend elsewhere. • Visa blames “rising prices and stalling wages” for consumer spending fall. Spending was down by 5.3% in the month in retail shops, but it rose by 6.9% online. • Visa reports ‘our index clearly shows that with rising prices and stalling wage growth, more of us are starting to feel the squeeze.’ It goes on to say ‘bricks and mortar retailers had a particularly challenging month, with sales dropping at the quickest level in over five years, at a time when warmer weather and the May bank holidays would usually drive shoppers on to the high street.’ • Some evidence, perhaps, that ‘experiential’ spending (i.e. on meals, games, visits etc.) could be holding up more strongly than spending on ‘things’. • Some observers suggest that we may have reached ‘maximum stuff’. • Markit comments ‘the outlook for consumer spending continues to look relatively bleak, with households facing faster increases in living costs and muted wage growth.’ It continues ‘the squeeze on household finances is likely to get worse as the Bank of England forecasts faster increases in consumer prices in the coming months.’ • Markit concludes ‘it’s likely we will continue to see weaker expenditure trends at least in the near-term.’ • The Society of Independent Brewers has released a report finding that 84% of breweries support charities, with 21% supporting more than 5 charities. • Gruppo Campari has exited from the still wine industry after the sale of its Château de Sancerre winery for €20.5m to the French based, Maison Ackerman. MERLIN H1 TRADING UPDATE: • Merlin updates on H1 trading (to date), says ‘group trading year to date has been broadly in line with expectations, reflecting the outlook and commentary provided on 2 March.’ • MERL comments on recent terrorist incidents saying: ‘attacks in Manchester and London over the past month have resulted in a further deterioration in domestic demand and, given the typical lag between holiday bookings and visitation, we are also cautious on trends in foreign visitation over the coming months.’ • MERL says ‘we continue to make good progress towards our 2020 New Business Development milestones’ • MERL has opened 250 rooms to date ‘with further rooms scheduled to be opened in the balance of the year.’ • MERL has opened ‘three Midway attractions to date, comprising LEGOLAND Discovery Centres in Melbourne and Philadelphia, and Madame Tussauds Nashville. It says ‘SEA LIFE Centre Chongqing will open on 15 June and, as previously announced, our new brand ‘Little Big City’ will open in Berlin in July.’ • MERL says ‘a number of our UK parks have been adversely affected in recent weeks by the terror attacks and subsequent heightened security measures.’ • MERL CEO Nick Varney says ‘I am pleased that we are making good progress towards our 2020 New Business Development milestones.’ • MERL CEO hints at short term hit to revenue as he adds ‘the impact of recent terror attacks on our London attractions is unclear at this stage. What is clear however is that London has bounced back before, and will do again. I have every confidence in the longer term resilience and growth trajectory of the market. London is very much open for business, welcoming visitors from the UK and from around the world to this exciting and vibrant city.’ HOLIDAYS, LEISURE TRAVEL & HOTEL • A poll by Asda Travel Money has found that staycations in the UK the most expensive holidays in terms of unexpected family holiday costs for two in five (39%) people. • Holidaymakers who make false sickness claims could face criminal charges and City of London police insurance fraud detectives are assessing relevant material. There has been a spike in tourists accusing their operator or hotel of giving them food poisoning and attempting to extract damages. • Blackstone Group is planning to trim its stake in Hilton through a secondary sale of 15 million shares worth as much as $900m following the hotel group’s $2.7bn IPO four years ago. The sale would cut Blackstone’s Hilton stake to 10.3%. • British Airways has confirmed that the proposed strike action by cabin crew has been called off and talks are set to take place regarding pay and benefits. • UKinbound is demanding a review of the new government’s approach to the upcoming Brexit negotiations and says the general election result demonstrates that voters are against a ‘hard Brexit’. The association surveyed its members regarding the new government’s tourism priorities and found that pressing issues include implementing a strong deal for the sector and visa reforms. The travel association The tourism industry employs more than three million people across the country and was responsible for contributing over £22bn to the UK economy last year. • A record number of passengers flew long haul and within Europe from Manchester airport in May, helping to drive a c12% uplift to 2.5 million passengers in May. Stansted, also part of the Manchester Airports Group, achieved a 7% increase to 2.3 million passengers as Jet2.com’s new southern base had strong second month and Ryanair and easyJet also grew passenger numbers. • The UK competition authority has been met with criticism after announcing it is to further investigate the proposed merger of the online food ordering businesses Just Eat and Hungryhouse. Hungryhouse described the CMA as having an ‘unduly narrow frame of reference’ and following an ‘overly cautious approach’. • Payday loans have received a large increase in complaints for a second year in a row, despite new regulation limiting interest charges. Complaints about payday loans reached 10,529 in the financial year 2016-17, compared to 3,216 received in the previous year. • Uber Technologies’ CEO Travis Kalanick is likely to take a leave of absence from the beleaguered ride-hailing service although no final decision has yet been made. Last Sunday, Uber’s board adopted a series of recommendations from the law firm of former U.S Attorney General Eric Holder following a sprawling, multi-month investigation into Uber’s culture and practices. The company is also adding a new independent director (Nestle executive and Alibaba board member Wan Ling Martello). OTHER LEISURE: • Barclays’ analysis suggests that a UK hung Parliament is more likely to mean an aggressive cut to the size of stakes allowed on gambling machines, which have been dubbed the ‘crack cocaine’ of the gambling industry. People can bet as much as £100 a time on fixed odds betting terminals (FOBTs) but both Labour and the Liberal Democrats want to slash the size of a maximum bet to £2, meaning bookmakers could lose hundreds of millions of pounds in revenue. FINANCE & MARKETS: • Government: o Uncertainty remains as government policy yet to be thrashed out. This despite 80+ page manifesto. o Some doubts that the Queen’s Speech (planned for 19 June) will be made on time as talks with DUP continue. o Weird comment that it has to be written on goat skin & won’t be dry in time for the Queen to read it. Is it April first? o Theresa May tells Tories “I got us into this mess I’ll get us out of it.” Says she will serve for as long as her MPs want her to. That’s in the absence of a lost vote of confidence. o FT says ‘Mrs May is hanging by a thread.’ It says ‘it is hard to believe she can last more than a few more weeks.’ o Telegraph reports Survation poll that has Labour now 5pt ahead of the Tories should a new election be held tomorrow. o Still possible that the Tories, who are wearing Brexit & the economy, will give way to Labour later this year. Telegraph says ‘the dramatic reversal in the Labour leader’s fortunes comes after the most damaging 48 hours of Theresa May’s career. • Brexit: o Engineering body EEF says HMG should rethink its Brexit strategy. o Business confidence sharply lower. IoD says only 20% of respondents to recent survey are now optimistic o IoD poll shows 34ppt swing from confidence to pessimism over last year. IoD comments ‘it is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy.’ o Reuters says ‘the political shock of Prime Minister Theresa May’s failure to win a majority in a national election could put the brakes on takeover activity in Britain’. o Telegraph reports Tory & Labour MPs are ‘plotting soft Brexit’. Norway model would see nothing change except UK would have no voting powers at table. o What is a ‘soft divorce’ anyway? • AG reported by Reuters as set to sue Trump over allegedly illicit foreign business payments • Oil up 25c or so at $48.6p • Sterling lower vs US$ at $1.2653 • Pound down vs Euro at €1.1302 • UK 10yr gilt yields 4bps lower at 0.96% on slowdown concerns • World markets: UK down yesterday with Europe & US also lower. Asian markets mostly higher in Tuesday trade RETAIL NEWS WITH NICK BUBB:
• Ted Baker: Ahead of today’s AGM trading update (for the 19 weeks to 10 June), the Ted Baker share price has been under the cosh a bit, but the headline of the statement is reassuring: “Positioned for further progress and to meet full year expectations”. Despite tough trading conditions in some markets, Retail sales were up by 14.3% (8.4% in constant currency terms), helped by an underlying 32% jump in Online business, with average Retail selling space up by 4.9%. Wholesale sales for the period increased 13.8% (8.9% in constant currency) reflecting good performances from both the UK and North American businesses. Both Retail and Wholesale gross margins were in line with expectations. And Ray Kelvin, the Founder and CEO, says: “The continued expansion of the brand remains underpinned by an unwavering focus on quality and attention to detail as well as the passion, skill and Tedication • Power Watch: Few people will be surprised about who is sat atop this year’s Retail Week Power 100 List, which has been published today: it’s Jeff Bezos of Amazon again. But a fifth of all the entrants work for a pureplay retailer and Boohoo joint chief executives Carole Kane and Mahmud Kamani, Amazon Fresh boss Ajay Kavan and Asos chief executive Nick Beighton are all among the highest risers in this year’s list. • News Flow This Week: Tomorrow brings the Mulberry finals, along with a WH Smith trading update. The Majestic Wine finals, the Morrisons AGM and the ONS Retail Sales figures for May are on Thursday. Then Friday brings the Tesco Q1/AGM. • “Grocer Gold” Watch: This evening the prestigious “The Grocer” Gold Awards for the food industry are being held, in the posh surroundings of the Guildhall in the City. Last year the key “Grocer of the Year” Award was won by Aldi UK. This year we were one of the judges…so we can say no more, but it’s fair to say that Iceland, Morrisons and Tesco were amongst the strong list of contenders for the Award. • Sheffield Watch: We flagged on Friday that we went to Sheffield for a “stag” weekend and as a venue its vibrant bar and restaurant area has much to offer. As a shopping area, however, central Sheffield (which is surprisingly hilly) leaves a lot to be desired, unless you like charity shops and discount stores. But the city centre is fighting back against the attractions of the vast out-of-town shopping centre and retail park at Meadowhall (just 3 miles away to the north-east) and next to John Lewis a new mixed use development called Charter Square is taking shape… |
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