Langton Capital – 2019-11-22 – Governance, turnover rents, Xmas, Playtech etc.:
Governance, turnover rents, Xmas, Playtech etc.:A DAY IN THE LIFE: I bought some milk for the office yesterday. The sell-by date was 1 December and, though it shouldn’t have been because this year has been no shorter than any other, that was a bit of a shock because where did the year go? And what did we achieve? More importantly perhaps, what did the country achieve? I suppose we kept things broadly on the rails whilst we cycled through one Prime Minister and on to another, sailed through two (immovable, I really mean it this time) deadlines and pushed the sunny post-Brexit uplands further into the future and that’s an achievement of sorts, I suppose. But still, the year could have a few surprises left in it yet. On to the news: LANGTON PREMIUM EMAIL: Corporate Offer: Premium email just £295 (plus VAT) for a single subscriber or £495 (plus VAT) for multiple subscribers. Drop us a line to get involved. Retail Offer: Easy in, easy out. £30 per month (inclusive of VAT, £25 net) via PayPal. Email us for details or check here. ADVERTISE WITH US: Langton’s free email now carries adverts. See front page of website for today’s copy & contact us for further details. TALKING SENSE: Company bosses often, of necessity, toe the company line. Optimism is more often than not mandatory but occasionally we get flashes of inspiration and some straight talking. 22 Nov 2019: Very recent comments – corporate governance – JD Wetherspoon: Running larger companies – Rowan Gormley: Turnover rents – Mike Ashley: See Premium Email. PUBS & RESTAURANTS: • CGA reports that around 62% of people visit the on-trade to eat or drink out over Christmas ‘with half going out more than they would at other times of the year.’ • Only half, you may say but, as the CGA goes on to say, because last year’s weather was benign and Christmas fell midweek (re the latter at least, it will again this year), there are some pretty tough comps to beat. • In 2018, it’s worth remembering, ‘the on-trade saw impressive sales growth over the festive period’ with sales of food up 4.3%, and drink sales rising 4.7%, according to the annual CGA Christmas Report 2018. • CGA said last year the weather was ‘mild and ice-free.’ It says ‘with Christmas Day and Boxing Day again falling mid-week this year, we should see consumers tempted out – although that does depend on the weather and sentiment following the General Election. A festive sales boost will be a welcome relief to restaurant, pub and bar operators who have experienced a difficult trading year.’ • CGA says ‘some 66 million visits are made to the on-trade in GB over Christmas with 43% of consumers spending more on drinking out than they normally do and 45% spending more on eating out.’ • JD Wetherspoon’s shareholders have approved the company’s Report & Accounts despite regulatory advisor PIRC telling them to vote against. Chairman Tim Martin told shareholders he has been 40 years in the role next month and was ‘hoping to do another 40’. • The Chief Executive of the BBPA, Emma McClarkin has commented on the Labour Party’s manifesto: ‘The Labour Party has rightly noted in its manifesto that too many pubs are closing. When it comes to community pubs, what is needed is investment and support. It is important that measures to bolster the rights of individual communities to purchase pubs do not act as a disincentive to invest in or operate a pub business’. • The chief executive of SIBA, James Calder also commented on the Labour Party manifesto: ‘Any targeted support for the alcohol sector needs to consider the UK’s national drink, beer, and the people who make and serve it. All parties need to commit to fair and positive review of small breweries relief and at least a freeze in all excise duty for the next Parliament’. • Hawthorn Leisure, the pub operating branch of NewRiver REIT, has seen a 5.5% increase in LfL income per pub in its latest H1 results. • Drinkaware has relaunched its night-time economy safety scheme with a new name, Nightlife Crew. The scheme offers five different training regimes to extend the campaign into a wider range of environments. • Itsu and dessert dining brand Heavenly Desserts has signed leases for new restaurants at International Quarter London. • The masterchef finalist, Chef Dean Banks has launched a new premium Scottish Gin, Lunin Gin. • The closures of three Peruvian Ceviche restaurants in a pre-pack administration deal have seen sixty staff lose their jobs. • PayPal has announced the acquisition of Honey Science Corporation for $4bn, mostly in cash. The acquisition, which is PayPal’s largest to date, will give the payments giant a foothold earlier in the customer’s shopping journey. • Müller scraps plastic straws, pledging to offer fresh school milk with paper straws instead. HOLIDAYS & LEISURE TRAVEL: • Abta urges political parties to recognise the importance of travel and tourism, which it says contributed £146bn to the economy in 2018. The association highlights that the outbound and inbound sectors support more than three million jobs and has said cutting carbon emissions, reviewing airline insolvency and guaranteeing overseas workers’ rights must be a priority for the UK’s next government. • DART shares finished trade up 4.6% yesterday on the back of the company’s report that estimates for the current year needed to be materially upgraded. • The US hotel industry saw occupancy fall by 3.6% in the week to 16 November reports STR. It says daily rate was down by 0.6% with REVPAR some 4.2% lower. • Hays Travel, which bought Thomas Cook’s retail stores after the tour operator collapsed, has announced plans to hire an extra 1,500 staff. • Rail commuters are to face 27 days for strikes from 2 December on lines running into London Waterloo after talks with the RMT broke down. The RMT says ‘no proposals that would enable the development of a resolution to the dispute have been put forward by SWR.’ • A Spanish court has deemed Ryanair’s policy of charging a fee for hand luggage as ‘excessive’ after a passenger was forced to pay an additional €20 fee to carry her 10kg luggage on board. The budget airline said it would not change its baggage policy. • IHG has rebranded an Oxford city centre property into an upscale ‘voco’, making it the UK’s fourth voco hotel. The hotel features 181 rooms and is located alongside the River Thames and on University College Oxford grounds. OTHER LEISURE: • Profit warning from Playtech. • Playtech has updated on trading saying that ‘following a positive start to the second half, trading conditions in TradeTech have been highly challenging during September and October. Overall, Adjusted EBITDA for FY 2019 is now expected to be a little below current consensus.’ • World Chess has announced that it will have a ‘hybrid initial public offering’ where it will raise funds by issuing digital tokens to would-be investors. The body intends to float on AIM next year. FINANCE & ECONOMICS: • Government borrowing last month was up to £11.2bn, the highest October figure for five years. Spreadsheet Phil’s rainy-day fund is being spent. • Year to date borrowing for the financial year is up 10% on last year. Reuters says ‘Britain ran a much bigger than expected budget deficit last month, showing government borrowing on the rise even before politicians have a chance to implement costly election spending pledges.’ The likes of Moody’s and S&P will be looking at this sort of stuff with interest. • The OECD says risks to global growth have increased. • World markets: Sterling unchanged at $1.292 and €1.1672. Oil up at $52.51. UK 10yr gilt yield up 2bps at 0.75%. World equity markets down yesterday but Far East higher in Friday trade. • Brexit, politics etc.: o Labour manifesto out. More spending promises (these at least with tax and borrowing increases costed in). o Google will no longer allow political advertisers to target voters based on their political affiliation it says. Twitter has said something similar. o Radical Labour Party manifesto both praised for its boldness and attacked as perhaps inoperable depending upon which newspaper you read. o The Tories have raised 26x more money for this General Election than the other two national parties combined. START THE DAY WITH A SONG: Yesterday’s song was Careless Whisper by George Michael. Today, who sang: “If I could have it back All the time that we wasted I’d only waste it again If I could have it back” RETAIL WITH NICK BUBB: • Land Secs: The property company Land Secs (which owns the White Rose Leeds shopping centre and jointly owns Bluewater, Westgate Oxford and St David’s Cardiff, inter alia) announced back in July that its long-serving Chief Executive Robert Noel wanted to retire next year, so it was expected that Land Secs would soon be announcing the result of the hunt for his successor and…today’s news is that it is an outsider, Mark Allan, the boss of the St Modwen property company (which has a market cap of about £1bn). • BDO High Street Sales Tracker: We noted on Wednesday that the John Lewis sales figures for last week were quite weak, on the back of tough comps in Electricals, but today’s BDO High Street Sales Tracker for medium-sized Non-Food chains (which has been reporting surprisingly good progress in recent months, possibly through sampling issues or the over-weighting of Online sales) is surprisingly good…In w/e Sunday Nov 17th, BDO Fashion sales were up by as much as 10.7% LFL (albeit against a soft comp). And Total BDO LFL sales (including a handful of Homewares and Lifestyle retailers, as well as Fashion retailers) were up by 8.7% last week (up by 3.9% in Store sales and up by 24.1% in Online sales). • Trade Press (1): The front cover of Retail Week magazine today is a rather striking photo of a robotic hand holding up an apple, to flag up the main feature on “The future of food” (“Vertically farmed and flexitarian – the trends determining how we’ll eat in the next decade”). Retail Week also have features on “Morrisons on the move” (a look inside Morrison’s new food-to-go store in Canning Town), “Ready for Takeoff?” (a look at the US tech start-up Takeoff, which is vying for Ocado’s Online Grocery crown) and “Growing pains” (a look at whether it is time for retailers to focus on getting better, not bigger). Finally, the Editor looks in his column at the new Marks & Spencer Christmas TV ad, noting that it “feels energetic and contemporary” and thunders that “M&S should be more like its Christmas jumper ad”.
• Trade Press (2): In Drapers magazine today and the Editor looks in her column at the recent party political announcements about reviewing Business Rates and thunders that “Business rates need a radical rethink”. The main focus, however, is on the glittering Drapers Awards 2019 ceremony held last night at the new Exhibition London venue next to Westfield London at Shepherd’s Bush: Primark swept the board, picking up the prizes for Best Fashion Marketing Campaign, Best Store Design and Fashion Retail Business of the Year in its category. The prestigious Fashion Leader of the Year Award went to Peter Cowgill of JD Sports and Dame Margaret Barbour was recognised with the Lifetime Achievement Award. In terms of News stories, Drapers highlight that John Lewis re-launched its Southampton store as an “experience playground” this week and John Lewis will also be pleased to see that it came top • News Flow Next Week: There is again enough going on in the Retail sector next week to distract us from all the General Election campaigning…kicking off on Tuesday with the Pets at Home interims and the Topps Tiles finals. Wednesday brings the ASOS AGM and the ScS AGM (although no trading updates are expected). On Thursday we get the Motorpoint interims and then Friday brings us the GFK Consumer Confidence survey for November, the McColl’s pre-close and…the annual discount jamboree that is BLACK FRIDAY. TRADING STATEMENTS & EVENTS: Upcoming results are set out below: • 20 Nov 19 M&B FY numbers • 20 Nov 19 SSP FY numbers • 20 Nov 19 Fevertree trading update • 21 Nov 19 William Hill Q3 update • 21 Nov 19 DART Group H1 numbers • 21 Nov 19 Hotel Chocolat AGM • 21 Nov 19 JD Wetherspoon AGM • 25 Nov 19 Wagamama (RTN) report to bond holders • 27 Nov 19 Marston’s FY numbers • 27 Nov 19 Britvic FY numbers • 27 Nov 19 On the Beach FY numbers • 28 Nov 19 Greene King H1 numbers • 3 Dec 19 Gym Group analysts site visits • 4 Dec 19 Loungers H1 numbers • 4 Dec 19 Stock Spirits FY numbers • 6 Dec 19 Gfinity AGM • 6 Dec 19 Whitbread AGM • Est 6 Dec 19 EasyHotel FY numbers • 12 Dec 19 General Election • 12 Dec 19 TUI Group FY numbers • 12 Dec 19 Fulham Shore H1 numbers • 12 Dec 19 Fuller’s H1 numbers • 12 Dec 19 Vianet H1 numbers • 13 Dec 19 Hollywood Bowl FY numbers • 19 Dec 19 Bank of England MPC interest rate decision LANGTON CAPITAL: Made in Hull. Like all the best things. Langton Capital is a financial advisory company providing insightful views on the UK and global leisure industry and the wider consumer sector in general. Subscription to the daily email is free. Unsubscribing is painless. We provide daily off the shelf and bespoke research. We have helped with transactions, fund-raisings, disposals and other corporate issues. We have a good ear, we are impartial, independent and not half bad at what we do. If you think that we could help you or your business, drop us a line. |
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