Langton Capital – 2021-03-29 – PREMIUM – Private Co’s, Brighton Pier, Ten Ent, WFH, staycations etc.:
Private Co’s, Brighton Pier, Ten Ent, WFH, staycations etc.:PREMIUM EMAIL – PLEASE DO NOT FORWARD: A DAY IN THE LIFE: Language is important because it can influence the way you view the world. It frames discussion and the interpretation of facts and that is very important. For example, Covid-19 may be three times as bad as the flu or one tenth as bad as the Black Death but, even if both of the above approximate to the same level of risk to health, you could expect the one to be taken much more seriously than the other – and that matters. That’s a hot political potato so we’ll change tack slightly. Don’t you find it annoying when politicians introduce a statement with the word ‘clearly’ because it means so very little. It could be replaced by a burp or a giggle and it would enhance what follows no less but, unfortunately, words such as clearly (or worse still, the tautologous ‘let me be clear…’) do frame it. Similarly, the way in which the words hope (or wish), think, believe and know are used interchangeably is also a bit disturbing. I hope it will be warm today, I think it will be warmer tomorrow and I believe it will be warmer still in July than it is this month but I actually know very little. Shakespeare had Prince Hal’s dad saying ‘thy wish…was father to the thought’ and, for all our technology and sophistication, not much has changed. Anyway, a four day week, a four day weekend and another four day week. That and 22 degrees tomorrow. Can’t be all bad. On to the news: ADVERTISE WITH US: Langton’s free email now carries adverts. See front page of website for today’s copy & contact us for further details. CHANGED EMAIL FORMAT: The Premium Email is unchanged. The Free Email is written and pre-sent the evening before. It may not include breaking stories nor Langton comment. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email. PRIVATE COMPANY ACCOUNTS: Gregg’s doesn’t have the field entirely to itself north of the Humber. Anyone familiar with Hull in the 1970s, 1980s and 1990s will know Skelton’s, Wallis’s, Fletcher’s and Woodhead’s. There are, admittedly, fewer large independent chains around now, but here are the accounts from a couple of them, bakeries & sandwich shop chains in the north of England. Coopland (Scarborough) and Thomas the Baker (York & Helmsely). The numbers are historic (March 2020 for Coopland and December 2019 for Thomas) but both companies refer to Covid. The accounts for the years just ended or just ending for both companies could make more relevant reading. Nonetheless: Coopland & Son (Scarborough): • Coopland reports revenues up for the year to end-March 2020 from £50.2m to £53.4,. Operating profit is down from £906k to £805k and PBT is down from £917k to £816k. Shareholders’ funds, after the payment of dividends, has have risen from £13.6m to £13.9m. • Coopland says ‘the final quarter’s trading was adversely affected by two named storms in quick succession, followed by a complete National Lockdown due to COVID in the final week of the year.’ • It says ‘the disruption that this caused continued into the first part of the new Financial Year, as footfall fell (especially in city centre locations) and Government restrictions resulted in the closing of all our cafes for the first quarter of the new year. Additionally, the Food to Go vans were re-deployed for the first two months of the year, as their traditional customer base disappeared overnight due to work from home directives.’ • The company adds ‘the vast majority of our shops remained open, with safety measures quickly installed and adopted. This allowed us to provide a valuable local service to our communities, with the addition of a range of bought in staple goods to assist our customers and provide a convenient one stop shop facility. For customers who were shielding or self-isolating, we introduced an on-line facility to allow ordering of food parcels, which were delivered by our fleet of Food to go vans. This was extremely well received.’ • The company furloughed some staff and says, not surprisingly, that ‘we continue to monitor the COVID situation closely and will ensure that we are there to serve our customers in a safe and friendly environment.’ Thomas of York: • Thomas of York reports numbers to end-December. This was a pre-covid world but, as the accounts were signed in December 2020, the company comments on Covid. • The company reports revenue up from £12.1m to £12.7m. Operating profit is down from £817k to £815k. PBT is up from £840k to £855k. Shareholders’ funds, after retained profit less dividend, was up from £6.6m to £6.7m. • Thomas says that its numbers are a little better than they look at first glance as there was a non-recurring credit in 2018 due to compensation being paid for a shop that was lost. • The company says ‘sailing a smaller, tighter ship in 2019 paid off handsomely and the outlook for 2020 was good.’ This was impacted subsequently by Covid but the company says ‘sales during January and February 2020 reflected the same solid core growth as the previous year – so too profitability.’ • It adds ‘March, for several weeks prior to lock down, showed some exceptional sales growth as the result of panic buying. Thereafter, as the first lockdown came into effect, sales initially slumped.’ • It says, with admirable honesty, that ‘April proved to be a dreadful trading month and we experienced substantial core decline. Much of this decline occurred in city centre York and larger towns such as Middlesbrough and Darlington. Our market towns fared somewhat better.’ • The company says ‘whilst in each month during the first quarter we were comfortably achieving budgeted results, our loss of budgeted profit in April combined with the actual loss incurred put us behind budget- a major factor for the remainder of the financial year.’ • It says ‘after April, despite lockdown, sales in our market towns continued to climb and shopping local seemed to be a more common pattern along with an increasing movement towards home deliveries rather than town centre shopping. Sales continued to rise until August when the market became more competitive and the Eat Out to Help Out Scheme was introduced. At that stage turnover reduced and core growth suffered. Trading improved in September and beyond until the second period of lockdown commenced and we were back on the rollercoaster.’ • Thomas is able to conclude ‘we are still forecasting a pure trading profit before tax by the year end that is in line with our expectations.’ Read across & other: • The numbers are historic and relatively meaningless. But comments made re trading during the Covid period are interesting. • Coopland says workers disappeared from city centres. • Thomas says market towns were strong but tourist centres, such as York, recorded poor sales. • Thomas mentions that consumers stayed local. Some shops were winners. It also mentions that retailers such as the bakery chains were net losers from EOTHO. PUBS & RESTAURANTS: 12 April reopening plans: • The latest Market Recovery Monitor from CGA and AlixPartners strikes an upbeat note saying that there are ‘signs of resilience in the managed sector and big cities as reopening nears.’ It says ‘around two in five licensed premises will have some kind of space to trade from when the market reopens for outside trading.’ It says ‘around 41,100 premises in Britain have a garden, terrace, car park or other area in which they could potentially seat guests—38.2% of all sites.’ The opportunity to trade outdoors is not evenly spread by product type or by geography. The Recovery Monitor says over 80% of community pubs in England are ‘able to offer beer gardens, patios or other outside space, compared to just 11.9% of casual dining restaurants.’ • Scope for outside trading also varies by region with 51% of all outlet types in the south west of England having space but just 33% in London. CGA says ‘with huge pent-up demand for hospitality and consumers’ confidence rising, outside trading could give sales a useful kickstart—but there are a lot of variables at play. Pubs with beer gardens will be popular if the sun shines, but some restaurants may find it harder to recoup the costs of reopening, especially if the April weather isn’t favourable. Well over half of licensed premises have no space at all in which to trade, though they could yet reopen in April if local authorities take a proactive approach and open up street space to serve on.’ • Langton comment: Sometimes, but not always, you get out of a situation what you are prepared to put in. It was Louis Pasteur who said that luck favours the well-prepared. We take a moment to consider a) the efforts that some operators either have or haven’t taken to reopen on 12 April followed by perhaps b) what is an important question, which is why open at all? Do you expect to make a profit? Or are you using outdoor reopening as a way of preparing units and staff for what we hope will be a fuller opening in May? • What effort has been put in? o Punters do not owe publicans or restaurateurs a living. Would-be customers have coped without the licensed trade for 7-8mths in the last year. They will surely appreciate being appreciated. o Several operators are referring to ‘making the outdoors, indoors’. Of course, that may run counter to the government’s intention in allowing outdoor opening but hopefully ventilation will be deemed adequate and pergolas and marquees and the like may well have four sides and a ceiling. o But a drive around any town or village is likely to throw up a range of outdoor solutions from none at all through to wedding marquee type structures with planking on the floor and a very ;’indoor’ feel. o It may be possible to ‘wow’ guests with the effort that has been taken to welcome them back. If a unit would be happy to leave its tables pre-set with cutlery, glassware and flatware, and not see the above rained on, blown away or stolen, then the customer might conclude that some efforts have been made to make the trip to the on-trade venue novel and enjoyable. o If, on the other hand, there are a couple of wind-blown parasols losing a battle against the driving rain, then the customer may resent paying on-trade prices to drink chilly beer and eat damp chips. • Will outdoor sales be profitable? o This will depend very much on product type and venue type as well as the volume of sales, fixed costs and the like. AlixPartners thinks trading could be at a loss. It says ‘we’ve seen a spate of operators announce plans to reopen for outdoor service on 12 April, and while it’s unlikely to be profitable for the majority to do so, businesses will do all they can to maximise their usable space. For those that do reopen, managing cashflow will now be of critical importance as work with supply chains begins again, and relationships with suppliers, landlords and other stakeholders will be tested.’ o We believe some operators could trade profitably. True, the weather in April can’t be relied on. But margins on products such as pizza are high and, if venues are welcoming and attractive, volume throughput could be good and contribution to fixed costs could be similarly substantial. o And reopening will help staff and the units themselves to scrub the rust off. AlixPartners points out that many operators have run up debts to landlords, banks and the government. The sooner a start on paying these off is made, the better. AlixPartners says ‘there is potential to drive stronger and more efficient operations on the other side of the pandemic, but the many in the sector will be weighed down by debt for some time to come and will spend the next year and beyond rebuilding their balance sheets and clearing their arrears. The overhang of rent liabilities also remains largely unresolved which means that, in spite of the clear pent-up consumer demand that exists, the hospitality sector is far from out of the woods.’ Closed units: • CGA comments in its Recovery Monitor on closed units suggesting that large provincial towns have performed relatively well. It says ‘there are other signs of durability in the market despite the challenges of the last year, including in major city centres. The Monitor shows that five big regional hubs—Bristol, Liverpool, Nottingham, Edinburgh and Sheffield—have all lost fewer than 3% of their licensed premises since March 2020, while many smaller cities including Plymouth, Aberdeen, Worcester, Exeter and Swansea have all lost more than 10%.’ Covid certificates: • There are some suggestions that the idea of vaccine certificates being necessary to allow entry to a pub is a cunning way of encouraging young people to get the jab. However, this is not without risk as they may simply choose not to go to the pub. Israel has reported apathy among u35s. Opinions are divided. Publicans, who would have to do the work, are not keen and the GMB Union has said that plans for pub vaccine passports were “reckless” and a “fast track to undo the gains of the present lockdown”. Staycations: • See Holidays & Leisure Travel Below. The pendulum is swinging away from overseas holidays & back towards staycations. Working from Home: • This will influence demand for some city-centre and travel hub outlets and it is consequently a hot topic. PM Boris Johnson is suggesting people have had enough “days off” at home and should return to their workplaces. Chancellor Rishi Sunak used different words to say the same thing. The official advice, on the other hand, is still to work from home where possible. • Langton comment: Scientists seem to be suggesting that any large-scale return to the workplace, which would involve much more use of public transport, would be premature. However, many workers seem to be voting with their feet and the ONS said that more than half of the country’s employees travelled to work last week for the first time since June, and possibly longer as records were only kept from that month. • The above will be welcome news to operators with sites at transport hubs or pubs, restaurants, coffee shops or grab & go outlets in city centres. However, all is not plain sailing as the Bank of England has suggested that 34 per cent of the workforce will continue working one day a week from home and there have been many comments from major employers, such as The Nationwide, which suggest that some changes could be long-lasting. This will impact revenues and viability in the short term and rents and occupancy costs before much longer. Other Covid news: • UK Hospitality Cymru has said that ‘Wales’ Hospitality businesses need clarity on further reopening and vital new cash support.’ It says ‘clarity on when hospitality can reopen outdoors in Wales and on crucial new financial support from April onwards for businesses forced to stay shut is now vital to avoid job losses and business closures’ adding ‘our businesses see retail and other areas opening up while they are frustrated and fearful for their existence. Existing support runs out in five days and they are hanging on by their fingernails financially.’ • CGA suggests that ‘consumers will have a renewed emphasis on brands’ contributions to local communities and environmental change when they return to eating and drinking out after lockdown.’ • The Pub Governing Body has confirmed that ‘rent review negotiations that were suspended can recommence from 31st March 2021, following the government’s decision to allow pubs that are able to comply with specific safeguarding measures to reopen.’ • KAM Media has reported that one in four visits to pubs, and one in three visits to restaurants last year did not involve alcohol. • Retailers will be able to stay open until 10pm six days a week says Robert Jenrick. This may lead to further questions as to why no equivalent stimulus is being planned for the on-trade. Jenrick says ‘this will provide a much-needed boost for many businesses – protecting jobs, reducing pressure on public transport and supporting people and communities to continue to visit their high streets safely and shop locally.’ A bit of that would be nice. Track & Trace: • Hospitality venues will need to take a note of contact details for guests until at least September. Hospitality tech platform Airship has relaunched its track and trace solution. CEO Dan Brookman says ‘I’m truly disappointed that track and trace will be required for re-opening the sector. The contact data previously gathered was not used and the effort of operators and inconvenience to customers went to waste. The only benefit for businesses is that they will be able to include an option for customers to opt-in to receive communications which will help to grow databases that have been decimated over the last 12 months.’ Company & other news: • Domino’s Pizza Group to exit Iceland. The group has announced that it has signed a binding Sale and Purchase Agreement with PPH ‘under which DPG will sell the entire issued share capital of Pizza Pizza (Domino’s Iceland) for a total consideration of ISK 2.4bn (approximately £13.7m) on a cash-free, debt-free basis, which will be satisfied in cash.’ DOM says ‘the proceeds from the disposal will initially be used to reduce Group debt’ and says the sale ‘is part of the planned exit from all directly operated international markets to allow management to focus on its core UK and Ireland operations, as announced by the Company in October 2019 and follows the exit in 2020 from Domino’s Norway and the announcement on 8 March 2021 of the exit from Domino’s Sweden. Discussions remain ongoing regarding a disposal of the Company’s Swiss operations.’
• The Brighton Pier Group has reported H1 numbers to 27 Dec 2020 saying that revenue fell from £17.3m to £8.2m with the group reporting profit before tax of £0.8m, down from £2.0m in the prior half year. CEO Anne Ackord says ‘we look forward to the reopening of all of our businesses, following what has been a traumatic time for the whole industry. We are encouraged by our performance during the relatively short times when we have been permitted to operate and have full confidence that the Group is well placed to take advantage of the opportunities that the anticipated staycation boom will present, along with the expected pent-up retail spend.’ The company says ‘we are pleased to note that the combination of the strong summer trading in the Pier and Golf coupled with the receipt of interim business interruption payments have resulted in earnings before tax 44% ahead of the same period • The Times reports that ‘all but one of the landlords that joined a legal challenge to a restructuring of Caffè Nero have dropped out of the battle, as the coffee-shop chain fights off a daring raid from the billionaire buyers of Asda.’ It says eight landlords have abandoned the challenge. • Bar restaurant company Albion and East, which is funded by Imbiba, has written to shareholders to say that it is planning to raise equity through a crowdfunding campaign, ‘which will help us to accelerate out of the pandemic towards an exit.’ The group has organised a general meeting for 13 April. The company says ‘we plan to go live with the raise in two or three weeks with more details. At this stage we are contacting our networks and asking people to express an interest in investing.’ The company has not set a price but says it plans to offer the shares at a valuation higher than our existing investors bought in at. • Marston’s commented on the request it had made for covenant waivers on Friday, saying ‘the waivers being requested are required solely as a consequence of the enforced temporary re-closure of its pubs in England and Wales by the UK Government as a result of the COVID–19 pandemic measures.’ The meeting of noteholders took place on Friday with 92.63 per cent voting in favour of the Extraordinary Resolution regarding the Proposals. • Molson Coors Beverage Company updated on Friday saying it ‘reaffirms key financial guidance for full year 2021.’ CEO Gavin Hattersley says ‘oover the past few weeks, we have faced significant and unforeseeable obstacles. While these obstacles will have a negative impact on our first quarter shipments and financial results, we believe the fundamentals of our revitalization plan are strong and our future remains bright. We continue to build on the strength of our core brands, aggressively grow our above premium portfolio, expand beyond beer, invest in our capabilities and support our people and our communities.’ • The Oakman Group has announced it has acquired The Woburn Hotel after signing a 25-year lease with The Bedford Estates. The unit is ‘a charming 18th-century property with 48 luxury bedrooms and seven individual cottages within the grounds, as well as three conference and events spaces, a restaurant and a large bar.’ • High Street photographic equipment chain Jessops has filed a notice to appoint administrators. HOTELS & LEISURE TRAVEL: Drop off in demand: • Travel Weekly says ‘travel agents have reported a fall in bookings following reports at the start of the week that overseas trips this summer may be unlikely due to a surge in Covid cases in Europe.’ Various ministers have suggested booking overseas holidays could be premature and £5,000 fines have been introduced for breaching no-holiday regs. The roadmap out of lockdown led to a sharp rise in sales, which has subsequently dropped off. The government will update on overseas travel on 12 April. Other travel news: • Jet2Villas has added capacity in Greece and Spain in response to a sharp rise in bookings. CEO Steve Heapy comments ‘all the package holiday benefits that customers get through booking with Jet2Villas is proving to be extremely attractive, as is the privacy that they can enjoy, and this has fuelled strong demand for our villa holidays. Knowing they can book a villa holiday with Atol protection, car hire and Jet2.com flights included is obviously a popular proposition for customers who are looking for that sense of freedom.’ • Langton comment: Upsets are said to prompt would-be holidaymakers to play safe and, as an integrated operator, Jet2 could be seen as a safer option that some, villa-only specialists. • Indeed, a quick look at a couple of villa sites suggested that those, non-integrated operators, were offering villa-only deals which might not have benefited from the same level of protection and which would leave the customer having to source their own flights. If the flights subsequently were withdrawn, the position with regard to the unused accommodation would then need to be resolved. • TUI has confirmed that former CEO and deputy chairman Peter Long is to leave the group’s supervisory board. • Cruises from the UK. • Carnival-owned Cunard has confirmed it will run ‘ten British Isles Voyages and three Sun Voyages, lasting between three and twelve nights’ from the UK. It says ‘British Isles Voyages include scenic sailings along Britain’s coastline including The Jurassic Coast, England’s only natural UNESCO world heritage site, Cornwall including Land’s End and Scotland including the Isle of Arran, Mull of Kintyre and Sound of Mull.’ Disney Cruise Line has also said it will offer trips for UK residents this summer. Passengers will remain onboard Disney Magic throughout a series of short trips from Tilbury, Newcastle, Liverpool and Southampton in summer 2021. • Eurostar is reported to be in ‘crisis talks over [its] £400m June debt deadline.’ The Telegraph says the operator is in ‘crunch talks with banks over £400m debt pile as British and French governments resist bailout.’ • STR has confirmed that it expects 2021 to be a better year for the US hotel industry than 2020. It says average daily rate is expected to increase 4.2% this year with room demand rising by 18% this year and 25% next. OTHER LEISURE: • Ten Entertainment Group has reported full year numbers to end-December saying that the numbers include only 11 weeks of normal trading conditions – but also 25 weeks of closure and 16 weeks of disrupted trading due to Covid-19 restrictions. The company reports revenue down by 57% at £36.3m with a reported loss before tax of £17.7m against a profit in the prior year of £9.0m. The loss per share is (23.2p) against a profit per share of 19.3p in 2019. The company says that it is ‘well positioned for growth and expansion post Covid’ and it saw ‘strong demand in the summer when the business reopened after first Lockdown.’
• Ten intends to reopen all of its centres on 17 May based on the Government roadmap. Outgoing chairman Nick Basing says ‘although the leisure and hospitality landscape has changed significantly, we know that our customers will more than ever be seeking out our great value experiences to reconnect with friends and family.’ CEO Graham Blackwell says ‘2020 has been extremely challenging but we can be proud of the way we have protected the long-term future of the business. We progress towards the reopening of hospitality and leisure with a business that is fit and ready and more digitally driven than ever before.’ The CEO adds ‘we used the time wisely in Lockdown to transform our digital platforms and to prepare our business for the future, to open our next generation centre in Manchester and refurbish two of our flagship centres. We are in great shape, prepared, and looking forward to • E-sports company Gfinity has reported H1 numbers for the six-month period ended 31 December 2020 saying that revenue rose by 212% to £3m with an adjusted operating loss of £0.9m, a ‘71% improvement on six months to 30 June 2020 (FY20 H2 £3.1m loss) and 63% improvement on the same period in the prior year (FY20 H1: £2.4m loss).’ The Company says it ‘has sharpened its strategic focus on its three core areas, positioning it to continue delivering positive results moving forward.’ The company has completed its strategic review and is no longer in a formal offer period. CEO John Clarke says ‘now it is time to accelerate the growth of the business by being focused on the growth areas identified under each of our strategic pillars.’ FINANCE & MARKETS: • The Federation of Small Businesses has said that 35 of the 132 exporters it surveyed have temporarily suspended trading with the EU or stopped permanently due to administrative difficulties. • Sterling little changed at $1.3767 and €1.1686. Oil up at $63.20. UK 10yr gilt yield up 3bps at 0.76%. World markets mostly better on Friday and London set to open around level. RETAIL WITH NICK BUBB: • Saturday’s Press and News (1): The front-page headlines of the Saturday papers were pretty mixed: the Times went with the news that the Government will allow extended opening hours for shops in England after April 12th (“High Street shops to open until 10pm”), whilst the Telegraph flagged that “Over-70’s to get booster jabs from September” and the Daily Mail highlighted that the end of the stay at home edict on March 29th will coincide with a mini-heatwave: “Here comes the sun”. The FT ran with the launch of a new Scottish independence party, Alba (“Salmond’s new party opens front in war with Sturgeon”), whilst the Guardian focused on an exclusive story about surveillance of working at home (“Call centre staff face being watched working at home”).
• Saturday’s Press and News (2): In terms of Retail stories, the Daily Mail went to town on the news that the Supreme Court has ruled that shop workers at Asda should be paid the same as its warehouse workers, whilst the main Business story in the Times was the backlash against Burberry in China for not being supportive of the cotton production from the troubled province of Xinjiang (the Business editorial in the Times noted that Burberry has kept its counsel on the situation so far and that it “looks like it’s waiting for the social media storm to blow over”). The Business editorial in the Times also stuck the boot in on Deliveroo ahead of the launch of its IPO on Wednesday, flagging that “Deliveroo is a tough gig for investors”, given the threat of tighter regulation of worker’s rights, thundering that “the law will catch up eventually with these gig economy mercenaries”. The
• Saturday’s Press and News (3): In other news, there were snippets in most papers about the announcement that the troubled Jessops camera chain has gone into administration, again. The ONS Retail Sales figures for February got uncritical coverage in the FT (“Record online sales propel retail rebound”) and the Times (“Retail sales bounce back after new year blues”). Next was the “Share of the Week” in the Daily Mail ahead of Thursday’s final results and the stockmarket report in the FT highlighted that Next was upgraded by the broker RBC on Friday. Further afield, the Guardian noted that the troubled owner of the new American Dream shopping mall in New Jersey has been forced to put nearly half the ownership of its 2 largest malls up for sale to stay in business…And the Money section in the Guardian began with a detailed survey of the Luxury Easter Egg market: the winner of its taste test • Sunday’s Press and News (1): The headlines on the front pages of the Sunday papers were quite varied, with the Observer going with “PM branded irresponsible over “back to the office” call” and the Sunday Times highlighting an investigation into how the scandal-hit Greensill finance company was given extraordinary access to No 10 (“Cameron and the toxic banker”). The Sunday Telegraph went with “Whitehall inquiry into elite school s*x scandal” and the Mail on Sunday focused on “Britain’s world-beating vaccine roll-out” (“Moderna jabs in 3 weeks for the under-50’s”).
• Sunday’s Press and News (2): In terms of Retail stories, the main front-page article in the Sunday Times Business section (“Full throttle for Deliveroo”) flagged that, despite the boycott by many UK fund managers and the storm about worker’s rights and governance, Deliveroo is expected to price its IPO this week towards the top end of its £8.8bn range. The column by the Sunday Times Business Editor, Oliver Shah, argued that the City “old guard” is, in effect, “waving two fingers” at Rishi Sunak via its Deliveroo revolt (many fund managers have been angered by the proposals approved by the Chancellor to allow companies with dual-class share structures to float on the “premium” part of the stockmarket). And the Mail on Sunday highlighted that Deliveroo have plenty of competitors, via an interview with the UK boss of the Hello Fresh meal kits delivery service, Laurent Guillermain, who • Sunday’s Press and News (3): In other news, the Mail on Sunday highlighted that Tesco has launched a major overhaul of the way its stores are run, with over 2000 managerial jobs at risk, whilst the Sunday Telegraph flagged that Asda has begun a discounting push and overhaul of its product ranges. The Sunday Telegraph also had a separate article on Asda, about how “Asda’s equal pay case risks opening the aisles to more claims” (Walmart is expected to pick up the tab for the extra wage bill rather than the Issa brothers). The Mail on Sunday also noted in its “Director’s Dealings” column that Roger Whiteside and his wife sold £2.1m worth of Greggs’ shares last week.
• Sunday’s Press and News (4): On the Non-Food front, the Mail on Sunday flagged that Mary Portas has called on the Government to encourage High Street shopping with a “Shop Out to Help Out” scheme and it also revealed that the Chancellor delayed a decision on an Online Sales Tax after Nick Beighton of Asos and Roger Burnley of Asda lobbied against the tax through the Retail Sector Council created by the Department of Business. The Sunday Times highlighted that landlords face a new threat to their rental streams through the “cram down” insolvency technique being pioneered by the embattled Virgin Active chain (“’Like CVAs on speed’: cram downs are landlords’ next headache”) and it also flagged that desperate owners of shopping centres are turning to an operator with a history of failures to take space for a fledgling chain of department stores called 15:17. The Sunday Times also looked at • Sunday’s Press and News (5): In terms of all the Economics comment columns in the Sunday papers, we would, as usual, highlight the column by the Sunday Times Economics correspondent David Smith (“Europe’s third wave will not derail our recovery”), in which he highlighted that “there have been false dawns before, but this time looks different”. And we also give the usual shout-out to the column by the veteran City commentator Jeremy Warner in the Sunday Telegraph (“England’s giant subsidy to Scotland is just how Sturgeon’s Nats like it”), in which he noted that “Europe is not exactly going to be rushing to fill the vacuum in Scotland’s finances”, if Scotland was to gain independence.
Today’s News: The week has kicked off quietly, with no real company news as such, although the embattled French Connection has announced that Neil Page (the former FD of Carpetright) has been appointed a non-exec Director with immediate effect. French Connection is still in the middle of a formal sales process and, ahead of the finals scheduled for April 13th, it no doubt wanted more help on the Board in weighing up the offers it has received. Otherwise, given the news in the Sunday Times that Deliveroo expects to price its IPO towards the top of the 390p-460p range, despite being shunned by many UK fund managers, we are musing why it chose the ticker “ROO” and how much of a pop there will be in the share price when conditional dealings start on Wednesday. And in case you’re wondering, French Connection is capitalised at £20m and Deliveroo hopes to be capitalised at up to This Week’s News: This is a short week, ahead of the Easter break, but, with the end of March fast approaching, there should soon be a Card Factory update on liquidity/refinancing. Tomorrow morning brings the latest monthly Kantar grocery sales figures, whilst on Wednesday we get the start of conditional dealings in the Deliveroo IPO and the Topps Tiles Q2 update, plus the Walgreen Boots Q2 results and the Kroger Investor Day out in the US. The highlight of the week, however, will be the Next finals on Thursday. |
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