Langton Capital – 2017-12-12 – Mobile payments, crowd-funding, Uber, deliver etc.:
Mobile payments, crowd-funding, Uber, deliver etc.:A DAY IN THE LIFE: Don’t you find that accents ebb and flow? Or perhaps I should say ebben flerr’ because they depend on who you’re talking to (turkin to) and, as I’m in Hull more frequently (baccy Null) & generally tend to be in a more relaxed frame of mind in December (offer narf cut), this is the time of year when I catch myself reverting to Hull mode and not turkin posh. And interesting it is too because, though I can rehabilitate myself surprisingly quickly when shooting down the A1079 (gowie nerm), there’s a half-way point (which often coincides with the fourth or fifth drink) where I’m neither in one camp nor the other and nobody can understand me (ahm turking bollox). This can be frustrating but the next couple of drinks generally settles the issue and from then on it’s all downhill. Two home matches over Christmas, though. On to the news: MOBILE PAYMENTS: • Reality check. How much do you draw out of a cash machine? Whether it’s £50, £100 or £200 per go it’s likely more than your children do. Or will, if they are currently infants because mobile payments and contactless payments are on the up and cash is on the way down. • Langton may draw out £200. That suggests that, on average, it has £100 in its wallet. This isn’t quite true as the £200 tends to take an immediate hit on withdrawal but, on average, there is perhaps £50 to £80 knocking about in cash. Compare that to a millennial, who may have £3, £5 or on a good day £10 in cash about their person and you can see the way things are going. • NRN suggests that mobile payments hit a ‘tipping point’ in 2017. • GFK has reported that mobile payments adoption is set to rise. Perhaps not a revolutionary conclusion, the analyst says it is the fact that adoption is currently so relatively low that is surprising. • GFK reports ‘one obvious stumbling block is availability.’ Here it quotes bankers as saying that only 36% of retailers currently accept mobile payments. However, with up to 39% of US consumers agreeing with the statement ‘my mobile device is quickly becoming my most important shopping tool’, this is surely set to change. • Cyber Monday shoppers in the US spent $1.59bn on their smartphones on Cyber Monday per CNET. • GFK suggests that 36% of Americans are ‘always concerned about their safety and security’. Langton would suggest that approximately 100% do not want to get mugged. Though losing a smartphone would be a downer, it would be lost in a mugging anyway and, if you lose £200 or $200 cash into the bargain, the situation has been that bit worse. • Oyster Cards are great but, if you can pay for the Tube via a contactless payment card that you are carrying anyway, why have more plastic knocking around than is strictly necessary. The Only Fools and Horses days, when the volume of cards carried was positively correlated with your wealth and your standing in the world, are over. • Most respondents to recent polls believe that ‘making Making payments with mobile device is more secure than other methods.’ Directionally, this is only going to continue going one way. CROWDCUBE ROUNDUP: • With a number of operators and start-ups trying to get under the wire before the Xmas shutdown, it seemed reasonable to have a trawl through the offerings of the largest crowd-funder, Crowdcube. • Zing Zing (a four-site Chinese takeaway operator) is over-funding. It has raised £565k of an intended £500k & is selling 8.8% of the company. • Moody Burger’s Moody Delivery has raised £140k of an intended £150k. The company intended to sell 16.67% of its equity. • Toad, an Oxford-based craft distillery, has raised £589k of an intended £750k for c7% of the company. • Six-strong Burning Night Group has raised £567k of an intended £750k for 4.76% of the company. • Berrywhite Natural Drinks has raised £58k of an intended £150k for 5.26% of the equity. The offer has 10dys to run. • The Natural Drinks Co has raised £225k of an intended £750k with only 8dys left. The offer was for c7% of the company. • Ascot Brewing Co has raised £57k of an intended £200k (for 25.54% of the company) with 45dys left. • Mobile payments company Zapaygo Investments has raised £123k of an intended £500k with 28dys left. The issue is for 5% of the company. PUB, RESTAURANT & DRINK PRODUCERS: • EI Group has bought back another 107,188 of its own shares for cancellation at 146.3p per share. • Brighton Pier Group has announced it has raised £3m in order to complete the purchase of Lethington Leisure Ltd. • Deliveroo has submitted plans for nine-kitchen hub in Birmingham city centre. The site aims to serve 240 deliveries between 11am and 11pm each day. • New Nielsen data has shown that shopper purchasing confidence has dropped to its lowest level since Q2 2015. Steve Smith, Nielsen’s UK and Ireland managing director said: ‘Although consumer confidence, overall, stayed at the same level as the previous quarter, retailers will be concerned about shoppers falling confidence around spending’. • Oakman Inns & Restaurants has acquired the freehold of The White Hart, Ampthill from Punch Taverns for £2.6m almost exactly 10 years on from opening its first site. The White Hart has eight hotel rooms and a function suite in addition to the bar. • A record number of children are expected to be fed by food banks this Christmas, according to food charity The Trussell Trust. An analysis by You and Yours of Trussell Trust data covering half a decade shows demand from children at Christmas has tripled and looks set to rise further. The charity has a network of more than 430 food banks, part of an estimated 2,000-plus across the UK. • A division of Thai Beverage has put itself forward as the only bidder for state-owned shares in Sabeco. The auction of up to 54% of Sabeco is worth at least $5bn. • JAB Holdings has bought Malaysian halal coffee chain OldTown Berhad. JAB, a private company controlled by Germany’s Reimann family, has spent c$30bn over five years putting together a coffee empire. HOLIDAYS & LEISURE TRAVEL: • Transparency Market Research have forecast the global tourism industry to be worth $160.8bn by the end of 2025. The market was valued at $46.5bn in 2016. • Uber’s appeal against the loss of its London license is not set to start till April and even then could be postponed until June. • Google Maps will add live journey updates to its app for passengers on buses and trains. • Marriott International has today announced the sale of Avendra to Aramark for $1,350m. OTHER LEISURE: • Apple Inc. announced on yesterday that it had reached an agreement with Shazam Entertainment Ltd, the UK-based app that enables users to identify songs by pointing a smartphone at the audio source. The deal values Shazam at $400m. FINANCE & MARKETS: • Expert alert. Report from UK Finance suggests that a stronger safety net for home-owners struggling with their mortgages may be necessary • Labour has said that it may move the Bank of England to Birmingham • Labour says banks have distorted the economy by lending to ‘unproductive sectors’. • Oil price sharply higher at $65.54 (was $63.19) on North Sea pipeline shutdown. • Sterling down vs dollar at $1.3342 • Pound lower vs Euro at €.1329 • UK 10yr gilt yield sharply lower at 1.20% (was 1.28%) • World markets: UK up yesterday with Europe down and US higher. Asia mostly down in Tuesday trade • Brexit etc.: o Mrs May has said that her deal with the EU is a win for everyone o Mr Davis has said that the deal is not final o Mrs May says there is ‘a new sense of optimism in the talks’. She says ‘we are going to leave but we are going to do so in a smooth and orderly way.’ o Brussels suggests a ‘Norway deal’ and a ‘Canada deal’ are mutually exclusive. The former allows free movement and pays into the EU and the latter does not. Mr Davis wants any deal to include a provision for the free movement of services. The Canada deal does not. Services account for 40% of the UK’s exports. Some services are not exportable (hairdressing, window cleaning etc.) meaning that, for those that are, exports are pretty important. o Banks withdraw threat to leave UK by Easter. Keeping powder dry, regretting crying ‘wolf’. o More experts. US think tank The Rand Corporation reported in BBC as of the view that ‘nearly all the possible trading relationships between Britain and the European Union following Brexit would be less favourable than staying in the European Union’. Economically, a no-deal solution is the worst outcome, followed by a soft Brexit followed by staying in the EU. PRIOR DAY LATER TWEETS: • Later tweets: Nightclub operator Deltic reports lower profits off a slightly increased level of turnover. Co still interested in Revolution Bar Group • Airbnb may be close to buying holiday operations of Wyndham Worldwide for as much as $1bn. Not likely to put prices down, one might think • Inflationary expectations remain above Bank of England’s target rate of 2% over next 2yrs per Bank survey. Expect CPI of 2.9% by end-2019 • ASDA cutting jobs to compete with Aldi & Lidl. Activist may call for Whitbread to do splits. Some casual diner discounting still in evidence START THE DAY WITH A SONG: Yesterday’s song was Trooper, by Iron Maiden. Tady who sang the following: If the sky that we look upon, Should tumble and fall, Or the mountain should crumble to the sea, I won’t cry, I won’t cry RETAIL NEWS WITH NICK BUBB:
• Carpetright: In the pre-close update back on Oct 25th Carpetright was making bullish noises about improving sales trends in both the UK and Europe and although it said that H1 profits would be down it said it expected “a significantly stronger second half”, in terms of the full-year profit outlook. Six week on and the tone is much more cautious: today’s interims reveal that H1 profits were way down and gross margins in Europe were very poor. And, while trading over the first six weeks of the second half has been “encouraging”, with an acceleration in LFL sales growth in both the UK and Europe, shareholders wil groan to hear that “in light of the consumer outlook we are taking a more cautious view of the second half and now expect underlying profit before tax for the full year will be towards the bottom end of the current range of market expectations”. The ebullient CEO Wilf Walsh will • Unibail Westfield: Another day, another huge merger in the shopping centre industry, as hot on the heels of last week’s surprise Hammerson Intu takeover, comes the news that the French shopping centre giant Unibail Rodamco is taking over mighty Westfield, valuing it at $24.7bn… • Joules: Today’s pre-close update from the lifestyle brand Joules covers the 26 weeks to 26 November and reads perfectly well, with total sales up 18.2%, led by Wholesaling growth. Colin Porter, the CEO, says “The Joules brand has performed well in the first half of FY18, delivering further expansion across markets, channels and product categories. The group’s performance reflects the growing appeal of the Joules brand amongst both new and existing customers across our target markets. We look forward with confidence to the second half of the financial year, underpinned by the strength of the Joules brand and our collections. Whilst trading conditions will remain challenging, we have seen good growth in our wholesale order book for Spring/Summer 18 and are well positioned for the Christmas trading period.” • John Lewis Watch: Good Electricals sales helped that great bellwether, John Lewis, deliver surprisingly good trading at the end of November and early December, but it was all discount-driven and it’s hard to think that trade has not been pulled forward from the key Christmas weeks. John Lewis will announce its sales for last week at about 11am and, having been too cautious with our forecasts for each of the last 2 weeks, we hope it’s third time lucky today, as we are going for flat sales (at best) of £152m), for w/e Dec 9th, despite a weak comp (versus the bumper £214m sales in Black Friday week this year). • News Flow This Week: Tomorrow brings the Dixons Carphone interims and the Sports Direct EGM about the £11m back pay owed to Mike Ashley’s brother. Then on Thursday we get the Sports Direct interims, the Ocado Q4 sales update and the ONS Retail Sales figures for November. |
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