Langton Capital – 2021-10-06 – TUI update & rights, trading, inflation, supply, WFH, labour, Pepsi etc.:
TUI update & rights, trading, inflation, supply, WFH, labour, Pepsi etc.:A DAY IN THE LIFE: I read somewhere that human beings don’t look up much. Maybe that’s because we’ve in the past had less to fear from eagles than from snakes but, in the 21st century, it does mean that it’s possible to walk down a street without once absorbing the detail of buildings above eye level, in which case you may miss the wealth of history that can often be found there. For example, 1920s, art deco cinemas may have been subdivided into two or more shops at ground level but the arched windows etc are visible above. And corner shops were very likely pubs, often the faded signs are visible and, as the website www.ghostsigns.co.uk makes clear, there’s an active group of people who like nothing better than to find, highlight and brag about the various signs that can still be seen in spectral outline on many an end-terrace building. Indeed, the Bile Beans (they keep you healthy, bright-eyed and slim, according to some – and they’re a wonderful tonic & laxative according to others) sign in York has just been repainted, leading to an earnest and alcohol-fuelled row as to whether a) repainting it in the first place was really cricket and b) whether a comma hadn’t been scandalously dropped after the word ‘healthy’. Anyway, there’s nowt s’queer as folk. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Full stories are in the Premium Email. Reply to this email if you would like to upgrade. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new format. Prices for the Premium, unchanged for 2yrs, are £295 for one subscription, £495 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE PUBS & RESTAURANTS: Trading: Markit’s latest services PMI, for September, showed a slight increase to 55.4 in the month from 55.0 in August. It says ‘although the latest reading signalled a solid increase in overall business activity, the rate of expansion was still much weaker than the peak seen in May (62.9).’ It says ‘around 34% of the survey panel reported an increase in output during September, while only 13% signalled a reduction. Markit says ‘a lack of candidates to fill vacancies and persistently high numbers of departing staff acted as a considerable brake.’ Re inflation, Markit says ‘supply chain difficulties resulted in another round of steep input price inflation at service sector companies during September. Exactly half of the survey panel reported an increase in their average cost burdens, while only 1% signalled a reduction. This pointed to the second-fastest rate of cost inflation since the survey began 25 years ago, exceeded only by that seen in July.’ Markit comments, farm costs (£30 per hour for labour), FDF view on food inflation etc. • See premium. Reply to this email to upgrade. More on inflation. The British Chambers of Commerce has reported that 62% of members polled believe they will raise prices in the run-up to Christmas as a result of mounting cost pressures. Companies reporting yesterday, Gregg’s and Hotel Chocolat, both referred to cost problems building up. Oil is now at a three year high, transportation costs have risen and wages are under upward pressure. • See premium. Reply to this email to upgrade. Supply difficulties. We reported a press comment yesterday that only 27 visas had been applied for by foreign HGV drivers. Other reports now put the number at 127. The UK is short some 100,000 drivers meaning that this has moved from being a drop in the bucket to being a slightly bigger drop. More on blame game, where we are etc. • See premium. Reply to this email to upgrade. Labour. Minimum wage to rise. Leaks of PM Johnson’s speech continue. The PM is to say that he will change the UK into a high wage, high skill economy and he ‘will announce a significant rise in the minimum wage within weeks’ according to reports. A figure of £9.42 is being mooted. The Times says it ‘has been told that the prime minister will accept the recommendations of independent advisers that are likely to boost the pay of the lowest earners to about £9.42 an hour.’ Disaster capitalism. The feeling that somebody, somewhere, could be profiting from our problems runs deep. Tory MP Chris Loder told a fringe meeting that busting things could be good in that it would lead to a resurgence in corner shops. Per The Telegraph, however, Kantar figures suggest that if supermarket supply chains were broken up it would cost families an extra £700 a year. • See premium. Reply to this email to upgrade. Working from Home. The PM Boris Johnson is reportedly set to tell the nation to get back to work in his wrap-up speech from the Tory Party conference this week. The Daily Mail quotes a ‘source’ as saying that he (Mr Johnson) ‘believes very strongly in the value of face-to-face working. It is critical for the training and development of young people. How can you learn a new job on Zoom?’ More on Tory comment, ICAEW view, tube station footfall etc. • See premium. Reply to this email to upgrade. Covid passports to be introduced in Wales. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Gregg’s said in its trading update yesterday that it had seen some ‘disruption to the availability of labour and supply of ingredients and products in recent months’ and that ‘food input inflation pressures are also increasing’. The shares of companies reporting yesterday performed well. Those of both Hotel Chocolat and Gregg’s finished the day up around 11%. Pepsi yesterday evening reported fiscal Q1 numbers saying that revenue was $20.19bn against estimates of $19.39. EPS was 179c against estimates of 173c. The shares rose in early trading on Wall Street, though by less than 1%. The company reported organic revenue growth of 7% for the quarter in North America. For the full year, the company says it believes its organic revenue to increase by 8%, up from its earlier forecast of 6% growth. As to the future, the company says revenue growth and earnings per share growth should to be in line with the company’s long-term objectives. Cake Box reports that its sales have almost doubled to £16.4m for the past six months amid a strong recovery in customer demand. • See premium. Reply to this email to upgrade. Amazon is to open its first non-food store in the UK. The unit will be located in the Bluewater shopping mall near Dartford, and will sell around 2,000 non-food products. Wendy’s and REEF have reportedly announced the opening of the first Wendy’s delivery kitchens in the United Kingdom. The unit will be at Blackwall in Docklands. TUI – TRADING UPDATE & RIGHTS ISSUE: TUI – further fund-raise/ TUI has announced a ‘further strengthening of its balance sheet via fully underwritten c.€1.1 bn capital increase.’ The company will offer 523.5m new shares at a ratio of 10 to 21 already held at a price of €2.15 to existing shareholders. • See premium. Reply to this email to upgrade. Re trading, TUI says ‘overall, Summer 21 programme totals 5.2m bookings, an increase of c.1.1m since Q3 update.’ It says ‘over 2.6m customers have taken a TUI holiday during July & August (FY20 Jul & Aug: 1.3m customers)’ and adds ‘Summer 21 bookings in Germany and the Netherlands well ahead of Summer 19 levels in recent weeks.’ It says it will have capacity of around 50% to 60% of ‘normal’ for the summer as a whole due to ‘subdued UK bookings.’ • See premium. Reply to this email to upgrade. LEISURE TRAVEL & HOTELS: Research from Holidays Extra has found that more Brits have been booking shorter overseas holidays following the government’s announcement last month of more relaxed rules. • See premium. Reply to this email to upgrade. Data from Business Travel Association shows that the UK lost £4.76 billion in GDP in the last week of September due to the decline of business travel trips following Covid-19. Domestic business travel bookings were at 53.24% of pre-pandemic levels, but international travel was still struggling at just 21.37%. Jet2.com has agreed to buy 15 Airbus A321 NEO aircraft reports the aircraft manufacturer. • See premium. Reply to this email to upgrade. Business travel. Per BTN, Travel management company CWT is filing for bankruptcy in the US as it completes a financial restructuring plan. Airlines. IATA estimates that the aviation sector will return to profitability in 2023, with the industry facing losses of around $201bn as a result of the pandemic. Director general Willie Walsh said stakeholders from all sides – including governments and industry partners – need to work together to keep aviation safe. Hotels. Accor has acquired a stake in Ennismore, the hotel developer which owns the Hoxton brand. Under terms of an all-share merger, the French hotel giant becomes the majority owner of the new entity, with a two thirds holding. TUI has said that it cancelling flights to La Palma for three weeks as a result of the volcanic eruptions on the island. TUI says it would ‘like to reassure customers due to travel to any other Canary Islands that our flights are currently operating as planned, however we will continue to monitor the situation and contact them should their holiday be impacted.’ OTHER LEISURE: The whistle blower talking to Congress, Frances Haugen, has said that Facebook’s products “harm children, stoke division and weaken our democracy.” Ms Haugen was a product manager at the company. • See premium. Reply to this email to upgrade. FINANCE & MARKETS: Markit reports a UK September services PMI of 55.4, up from 55.0 in August. It says ‘supply chain difficulties resulted in another round of steep input price inflation at service sector companies during September. Exactly half of the survey panel reported an increase in their average cost burdens, while only 1% signalled a reduction. This pointed to the second-fastest rate of cost inflation since the survey began 25 years ago, exceeded only by that seen in July.’ Markit’s seasonally adjusted UK Composite Output Index ‘posted 54.9 in September, up fractionally from 54.8 in August but still much weaker than the peak seen earlier this summer.’ It says ‘manufacturers saw a particularly steep slowdown in employment growth, with staffing numbers rising at the weakest pace since January. Shortages of candidates to fill vacancies were widely reported across the private sector.’ The SMMT has reported a set of “desperately disappointing” car production numbers with volumes 44.7 per cent down on the pre-pandemic ten-year average for September. New registrations were 34 per cent down on the same month last year. The central bank of New Zealand has raised its raised interest rates for the first time in seven years. Sterling higher at $1.3605 and €1.1744. Oil price up at $82.9#82. UK 10yr gilt yield up sharply by 7bps at 1.09%. World markets better yesterday until the Far East turned lower in Wednesday trade. London set to open down around 45pts as at 7am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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