Fuller’s, Jet2, Flutter, Playtech, Soho House, credit cards & other:

A DAY IN THE LIFE:

We tweeted yesterday:

‘Don’t you just love algorithms? WhatsApp would appear to know me quite well. On typing ‘do you fancy a meetup tomorrow for a…’ it supplied three words ‘pub, pint and curry’. What I was looking for was ‘coffee’. Honest…’

And it’s true.

WhatsApp (owned by Mata Platforms – better known as Facebook and a deep pocketed defendant if ever an ambulance-chasing lawyer saw one) tried to get me to drink alcohol and eat inappropriate food that might be injurious to my health so perhaps I should sue?

Or maybe, if I use the terms often enough, some algorithm somewhere will fill in the words ‘blow’, ‘crank’ or ‘smack’ after I type in ‘man, I know I shouldn’t but I really need some…’ and then we could be talking real money.

I mean, at least it’s an idea. On to the news:

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DELIVERY & TAKEAWAY:

Summary:

CGA & Slerp Tracker suggests ‘delivery and takeaway sales growth slows in October as eating-out confidence builds’. However, ‘at-home sales [are] still 98% higher than 2019 levels’ with the growth in deliveries coming in at 7x that of takeaway sales.

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PUBS & RESTAURANTS:

Supply issues:

The latest CGA Prestige Foodservice Price Index has that buoyant demand and product shortages are combining to put upward pressure on foodservice prices. It says that the return to school and a similar return to the office has contributed further to demand. The report suggests that prices were flat in September but says they are likely to rise in October. It says ‘from a flat September, we expect prices to be up between 3% and 6% year-on-year by the New Year, with an even higher peak thereafter.’

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Reuters reports ‘Greggs has admitted that its vegan sausage rolls are being hit by supply chain disruption.’ It says that it is seeing ‘temporary interruptions’ to supplies across the UK included vegan sausage rolls. Reuters quotes a spokesperson for the firm as saying ‘some shops may not have them or may not have them throughout the day. It varies.’ The company is reported by Reuters to be ‘working hard to minimise the disruption and did offer a broad range of alternative snacks.’

Other issues:

UK Hospitality Cymru has welcomed the announcement in Wales that there are ‘no immediate plans’ to extend Covid passes. UKH Cymru says ‘night time businesses in Wales are already reporting a double digit drop in trade linked to the enforcement of Covid Pass restrictions – and the wider industry fears economic instability and simply not having enough staff to cope with across the board restrictions.’

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The Insolvency Service has released monthly information on insolvencies in the UK for the month of October. It says that, in the month, there was a total of 1,405 registered company insolvencies across England and Wales. There were 1,248 creditors voluntary liquidations (CVLs). This is up 85% on October 2020 and 19% up on October 2019. There were 95 administrations and 46 compulsory liquidations alongside 16 company voluntary arrangements. The latter figure is 24% lower than in October 2020 and 56% lower than in October 2019. There were no receivership appointments.

FULLER’S H1 NUMBERS:

Fuller’s has this morning reported H1 numbers and our comments thereon are set out below:

The numbers: Fuller’s reports revenue in the 26 weeks to 25 Sept of £116.3m compared with £45.6m in FY21. FSTA says EBITDA is a positive £22.8m compared with a loss of £3.7m last year. The statutory PBT is £10.6m compared with a loss of £23.0m and adjusted EPS is 6.1p against a loss per share of 33.4p in FY21. There is an interim dividend of 3.0p per A and C share ‘reflecting the reopening of our estate, return to profitability and reduction in net debt.’

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COMPANY & OTHER NEWS:

Amazon is to stop taking Visa credit cards in the UK from 19 January. Amazon says ‘the cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers.’ Visa says it is disappointed.

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Plant-based food group Clean Kitchen Club has raised £1.4m in a seed round to give the company a £7.5m valuation.

Amazon is opening its latest UK till-free grocery shop in East Sheen.

The Scottish Beer & Pub Association has ‘cautiously welcomed’ the Scottish Government’s decision to delay the introduction of the Deposit Return Scheme. It says ‘the beer and pub sector cautiously welcomes confirmation of a delay. Unfortunately, due to a variety of factors, it would have been impossible for the scheme to be ready by the previous date of July 2022.’ The SBPA adds ‘we all share the ambition of the Scottish Government to reduce emissions, improve recycling and speedily move towards a more circular economy – this delay is crucial in that. DRS will have massive impact on both brewers and publicans, to ensure a successful roll-out of the scheme, a delay until at least September 2023 is required.’

Black Box in the USA says that restaurants in the US continue to report better sales than they did in 2019. It says sales growth was 6.0% during October, down from the 6.3% reported for September. The peak was the 8.2% reached in July.

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Soho House reports that revenues have recovered somewhat to $180m in the latest quarter but says it will charge more for membership going forward. Losses more than doubled to $76 million during the three months to October 3. The company hopes to be in the black by the end of next year.

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McColl’s yesterday warned on profits saying that supply shortages were driving it to ‘significantly lower revenues than initially anticipated’. Delivery drivers are still in short supply per the ONS’s Real time Indicators. Some companies are performing relatively well, however. JDW last week and Premier Foods this week said that supplies were getting through.

Restaurant and hospitality company Green & Fortune has announced that all current and future employees will be paid beyond the London Living Wage. It says its new hourly rates are significantly higher than the minimum wage, the London Living Wage and also the average rates paid by many companies in the hospitality sector.

LEISURE TRAVEL & HOTELS:

Jet2 has reported H1 numbers to end-September saying that revenues rose to £419.6m from £299.9m last year with an operating loss of £170.4m and a loss for the period before tax of £205.8m (2021: loss £119.3m). The loss per share is 76.2p compared with a loss last year of 56.9p per share.

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Online Travel Agent eDreams Odigeo has reported strong bookings growth in Q3. It says ‘trading continues to improve and year-on-year growth rates for bookings verses pre-Covid-19 levels are accelerating – September +33%; October +42% and November +53%, verses fiscal year 2019.’ The group cut losses for the quarter to €12.2 million from €19.3 million in the prior year. It says ‘despite continued travel restrictions, net cash from operating activities improved by €41.2 million.’

HotStats has reported that ‘the supply chain crunch and inflation are compounding what’s already a nettlesome recovery for hotel owners and operators.’ It quotes industry players as saying that prices can be increased in some areas but it will be a challenge to recoup all of the cost rises that the industry is having to bear,

US brand owner Hilton has said ‘Europe is instrumental to Hilton’s global growth because of the high volume of leisure and business travel in the region.’

OTHER LEISURE:

The Times has reported that Pure Gym ‘has been approached by private equity firms keen to back its expansion after a mooted initial public offering was shelved.’ It says the company ‘never formally declared its intention to float, although in a bondholder update in July it confirmed that it was “in the early stages of considering options for potentially raising equity, including in the public markets”’. The Times says that it is ‘understood that management, working with Leonard Green & Partners, its private equity backer, had been hoping to press the button on an IPO in October or November before market volatility forced it to put the idea on the back-burner.’

Flutter Entertainment has announced the acquisition of Tombola, the UK’s most recreational online bingo operator.

Commenting on Press speculation, Playtech says it ‘confirms that on 5 November 2021 the Company received a preliminary approach from JKO Play Limited seeking access to certain due diligence information, in order to explore terms on which an offer for all of the issued and to be issued share capital of Playtech might be made. ‘ It says ‘JKO is a company controlled by Mr Eddie Jordan and Mr Keith O’Loughlin.’

Hong Kong’s Disneyland had to close yesterday for staff to take compulsory COVID-19 tests after one person who visited the theme park over the weekend was found to be Covid positive. China (including Hong Kong) is attempting to enact a ‘zero Covid’ policy, which is proving to be rather problematic.

Netflix is reported set to double its presence at production facility Shepperton Studios. Pinewood says ‘we are thrilled to be going ahead with the next phase of expansion at Shepperton Studios and we’re especially pleased to be strengthening our partnership with Netflix. Their commitment to expand at Shepperton is an endorsement of our operational expertise and enables us to continue our investment into this great studio.’

Games studio Dubit has raised $8m to launch a live esports league.

Miramax is reported to be suing director Quentin Tarantino over his plans to release a collection of non-fungible tokens, a form of collectible that exist on blockchains, based on the film.

FINANCE & MARKETS:

The ONS yesterday reported that the CPI in the UK had risen from 3.1% in September to 4.2% in October. This is more than twice the level that the Bank of England has been mandated to target. This has raised concerns that interest rates may be raised at the Bank of England’s next MPC meeting, scheduled for 16 December.

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Sterling higher on interest rate rise hopes at $1.3488 and €1.1916. Oil price lower at $79.86. UK 10yr gilt yield down 3bps at 0.97%. world markets broadly lower yesterday and London set to open down around 5pts as at 7am.

RETAIL WITH NICK BUBB:

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