Recovery, supply, Thwaites, Coke HBC, Brakspear, Nightcap, DPP etc.:

A DAY IN THE LIFE:

I read a good line in a book the other day. It mentioned an older gent getting a bit down in the dumps because he was pretty sure that he was going to be outlived by his socks.

Indeed, I know what the author means as, though I intend to be around for some time to come, I fully expect to be outlived by the pile of envelopes I bought years back and which I never use.

And I don’t think I’m alone, either, because, if you could take a moment, when did you last use one yourself?

Greetings cards excepted, of course, and only for use for their intended purpose. Not the ones you might have scribbled a phone number or a website address on the back of and the question isn’t directed at junk mail senders (including the Inland Revenue, parking fines people, other pests etc) or the like.

I shouldn’t say I ‘never’ use them, of course, as it’s an absolute often best avoided.

However, if I use one every three months that would be a marked acceleration from my current rate and, as I have several hundred, I would have to make it well into the next century if I’m going to live to stick them all in the post.

Before I get started on estimating the date on which I’ll finish my current chequebook let’s move on to the news:

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PUBS & RESTAURANTS:

Trading:

CGA’s Drinks Recovery Tracker has found that average drink sales in the week to 23 October were down by 6% on the same week in 2019. Beer was down 10%, wine down 14% and spirits sales were up by 11%.

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The Local Data Company reports that after Debenham’s finally failed after earlier losses and a pre-pack in 2019 followed by a straight administration in 2020, it has been a struggle to relet properties. Some 160 units were left vacant. LDC says that ‘of the 48 stores that have been selected for re-letting or repurposing so far, 14 are open and operating. The biggest new occupier in this group is Next with its Beauty & Home format, with four stores open…and two more stores planned.’ Boohoo has bought the brand and online presence but the last of the company’s physical stores closed in May.

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Supply issues:

Sky reports shipping giant Maersk has warned there is “little visibility” about when bottlenecks in global supply chains will end. CEO Soren Skou says ‘the whole system has become one gigantic bottleneck.’ That isn’t very encouraging.

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Suppliers are likely to favour loyal, bigger or high-paying customers when it comes to deciding who gets what. Sharp-elbowed, smaller operators who are slow to pay may find themselves towards the back of the queue.

Market Finance has reported that supply chain issues and increasing costs led 79% of SMEs contacted to say that they have faced increased prices from suppliers over the past six months. Some suppliers have passed costs on and others have made an attempt to absorb them.

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The consumer:

Four more energy suppliers have gone bust in the last few days. Customers of Omni Energy Limited, MA Energy Limited, Zebra Power Limited, and Ampoweruk Ltd will be moved to other suppliers and, presumably, to spot price contracts. This will reduce the consumers’ spending power. Around 19 energy suppliers have so far gone bust accounting for around two million customers in total.

COMPANY & OTHER NEWS:

Coca-Cola HBC has updated on 2021 Q3 trading saying that it has seen ‘strong Q3 FX-neutral revenue growth of 17.1%’ alongside a ‘sharp acceleration on a 2 year basis, closing 16.8% up on Q3 2019 or 8.9% ahead YTD, on a like-for-like basis.’ The company says it has gained market share, that volume growth was 13.1% and that it is ‘on track to complete the acquisition of Coca-Cola Bottling Company of Egypt by Q1 2022.’

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Daniel Thwaites has reported H1 number for the 6mths to end-September saying that the company is ‘recovering strongly from the pandemic.’ It reports turnover up 119% to £47.8m (2020: £21.8m) and operating profit of £9.3m (2020: loss of £1.4m). The company says that debt has been reduced by £17.4m since March to £61.4m. The co reports earnings per share of 10.7p (2020: loss of 8.2p).

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Brakspear is to launch a new identity for its 9-strong, managed estate, Honeycomb Houses. It says ‘underpinning the Honeycomb Houses branding is a new ethos, ‘Our House, Your Home’, which informs every aspect of the pubs’ operation and will be brought to life by the division’s 230 team members.’

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In the US, Outback Steakhouse parent Bloomin’ Brands Inc. has reported Q3 sales saying that it has maintained it takeaway and delivery sales as dine-in has recovered. The company says the off-premises business “has proven be very sticky even as in restaurant volume improved in Q3.” It adds that ‘off-premises represented 27% of U.S. sales, which was only slightly down from 28% in Q2. Off-premises revenues were 29% of sales at Outback and an impressive 36% of sales at Carrabba’s.’

Nightcap has updated again saying the ‘Board expects results for 53 weeks ending 3 July 2022 will be significantly ahead of current market expectations.’

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Diageo has reported that it has broken ground on the site of its first malt whisky distillery in China. It says ‘located in Eryuan County in Yunnan Province, the Diageo Eryuan Malt Whisky Distillery will produce our first China-origin, single malt whisky. Details of the US$75 million investment were officially unveiled at a special ceremony today in Eryuan, attended by provincial and local government officials, industry representatives, and the local community.’

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DP Poland plc yesterday announced an accelerated book build in order to raise £3m in new equity at 8p per share. It says the monies raised will be used to cover the costs of integration with Dominium and ‘strengthen the working capital position of the Company in order to support the Company’s growth strategy.’ The company held a webinar to outline plans yesterday at which it said that a number of M&A opportunities were now presenting themselves in the Polish market.

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On Trade Consultancy has announced that Lassou has become its new ecommerce partner. It says the company’s ‘unique approach in offering support and an ecommerce platform to innovative, independent drinks companies to showcase their brands is to be applauded.’ Rupert Culme-Seymour, Commercial Director at OTC, says ‘I look forward to working with Lassou and seeing OTC clients enjoy their benefits going forward.’ Lassou.com is an online marketplace that provides ‘a marketplace for small independent drinks brands, free from having to compete with the big global brands.’

The Valiant Pub Company has announced its first acquisition after reaching agreement to buy 17 pubs from SA Brain for an undisclosed sum.

US brand Popeyes has confirmed its first UK site will open on Saturday 20 November and has outlined its proposed menu. The unit is located in London’s Westfield Stratford.

Savills reports that community pub company Amber Taverns is looking to open sites in the South West and South Wales. Savills says ‘with the economy opening up we’ve seen pubs and restaurants benefit from the positive and energetic response from consumers. The sector is expected to continue to perform resiliently and as such we have seen active interest from investors, both new and established.’

Hello Fresh reported numbers in Germany yesterday. The company beat expectations and its shares rose on the news. The company says sales could grow between 57% and 62% this year with an EBITDA margin of between 8.25% and 10.25%.

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LEISURE TRAVEL & HOTELS:

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The Dalata Hotel Group has announced that Dermot Crowley has succeeded Pat McCann as chief executive.

STR reports that rising labour costs have held back US hotel profitability. It says ‘higher labour margins meant less room for profits, and the GOP margin fell for the second consecutive month to 33%.’ There has been some sign that business travellers are returning. STR says ‘to accommodate that demand, hotels reopened F&B operations and increased their overall staffing levels in an inflationary environment with higher wages.’

OTHER LEISURE:

Flutter’s shares fell by 7.7% yesterday on the back of its trading update. The group revealed, after a positive start to its announcement, that a run of adverse results meant that there would be an undershoot relative to expectations.

Netflix is to launch its first games worldwide on its Netflix app on Android smartphones. The company says ‘while this is just the beginning of a long journey, we’re excited to provide a gaming experience that is differentiated from what is available today – exclusive mobile games with no ads, no in-app payments, included with your Netflix membership.’

Yahoo is reported to have pulled out of China. It says this is due to an ‘increasingly challenging business and legal environment.’

FINANCE & MARKETS:

Sterling down at $1.3628 and €1.1584. Oil price lower at $83.83. UK 10yr gilt yield down 4bps at 1.03%. World markets mixed yesterday. London set to open around 21 pts lower.

RETAIL WITH NICK BUBB:

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