Compass FY numbers, inflation, WFH, JDW, MOD (in the US) & other:

A DAY IN THE LIFE:

Newspapers have been around for a long time but it might be worth asking just why did they get the names that they did?

I mean somebody must have got out their Victorian or Georgian thesaurus and looked up ‘communicate’ because we have names like Bugle, Sentinel, Chronicle, News, Herald and Tribune etc.

And then there are the ones that we know and that also have a link to communication, some, admittedly, better at it than others. They may induce a warm smile or a curled lip but include Telegraph, Guardian, Times, Express, Mail, Post and the like.

And then there are the passive Observers, Spectators etc alongside the more active, take-no-prisoner Inquirers and also the megalomaniac Statesmen, Stars, Suns and Globes.

Indeed, I seem to remember that the church’s newspaper was the Universe and you can’t get much grander than that. Langton’s is just a newsletter, of course, and not even a capital N at that. On to the news:

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COMPASS GROUP FULL YEAR NUMBERS:

The figures:

Compass Group has reported full year numbers to 30 Sept 2021 saying that revenues were £18.1bn (down 6.3% from last year) with an operating profit of £811m (up 55.4% on 2020). The group says it earned 29.5p per share (2020: 17.1p) and it will pay a 14p dividend (versus zero last year).

The company says ‘underlying revenue recovered to 88% of 2019 revenue by Q4’ with an underlying margin of 5.4% in Q4 (versus 4.5% for the full year). The group says it saw ‘strong FY operating cash flow of £1 billion whilst maintaining gross capex at 3.6% of underlying revenue.’ It has reduced its leverage ratio to 1.6x. The group intends to pay out via dividend around 50% of its underlying earnings.

Divisional performance, Company Comment, Next Year, More on Outlook etc.

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PUBS & RESTAURANTS:

Inflation:

Greene King boss Nick Mackenzie has said that cost increases are cumulating and operators will have to put prices up in the New Year.

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The CBI says inflation is “very real” and warned at its annual meeting that inflationary pay rises will “spill over” into prices. The implication here may be that labour (with a small L) should take one for the team and not seek cost of living pay rises.

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There is still no sign of a return to the use of vouchers. This was a big deal pre-Covid and it had a negative impact on trading margins and, arguably, on customers’ perception of the value for money they were getting (or not getting) when they paid full price.

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Meanwhile, a historic investigation into Black Friday last year, 2020, by Which? has found that nine out of 10 Black Friday deals are the same price or lower than they were in the 6mths prior to the deal. Some 98.5% were also cheaper (or the same price) than they were 6mths after Black Friday. The day, therefore, could be a slight depressing factor when it comes to inflation.

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Working from home:

The jury is very much out when it comes to the return to work. Some observers say it’s happening (it is, but how much?) and others say it isn’t and it won’t (here it depends on whether the observers mean it won’t get back to 100% or it won’t happen at all.

The Telegraph does a Thursday & Friday shot of Bank Station to illustrate that Tues, Weds and Thurs (rude initials, btw) is the ‘new normal’. This is what we hear from bar operators. Whilst The Times says younger workers want flexibility, The Telegraph quotes 1960s entrepreneur and octogenarian Gerald Ronson as saying they (younger people) can’t wait to get back to the office and The FT says the flood back to workplaces has stalled. This matters if you run say a bar or a coffee shop in The City.

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In light of the above, the Tube strikes due on Friday 26 November and Saturday 18 December may have targeted the wrong days if they wish to disrupt life for commuters. It won’t help weekend trade, of course The RMT has called the strikes to coincide with the reintroduction of Night Tube services. London Underground says ‘at such a pivotal time for the capital’s recovery, we are hugely disappointed that the RMT is threatening London with this unnecessary action.’

Lockdown 4.0 unlikely say most observers.

PM Boris Johnson has said he sees nothing in the stats to suggest that a 4th lockdown will be necessary. His record on calling this is not good but, in this case, many others agree that, as the UK is soldiering on with high but flat-lining levels of infection, a lockdown is not likely. Foodservice analyst Peter Backman says, when contrasting the UK with continental Europe, ‘the atmosphere…is more relaxed.’ He questions whether this is down to ‘the wisdom of our political leaders’ or ‘the insouciance of the public, many of whom have learned to don masks only when absolutely necessary.’ It is likely the latter but, for hospitality, provided we don’t have a horrendous winter during which the NHS falls over, it is arguably the better of two suboptimal outcomes.

COMPANY & OTHER NEWS:

JD Wetherspoon has announced that it will extend the budget drinks offer that has seen it sell certain beers and other alcoholic drinks for just 99p each. The deal had been scheduled to end on 30 November, but it will now continue for another three months. Chairman Tim Martin said of the previous price cut ‘our pubs are known for their excellent choice of drinks at value-for-money-prices at all times.’

Mintel has reported that, of consumers in the 25-34 age range, some 45% had cut back on their meat eating in recent months. Separately, the MA reports that Finder has said that the number of vegans in the country rose by 40% last year. With this in mind, Whitbread has partnered with Nestlé to feature new plant-based dishes on menus at its pubs in the coming months.

MOD Pizza Inc. in the US has filed its intention to list its shares. The Seattle-based chain has said that it has submitted draft documents with the Securities and Exchange Commission. The number of shares to be placed and the price have not yet been determined. The chain was founded in 2008 by Scott and Ally Svenson and has over 500 units including those operated under franchises. The UK business, which opened with a unit in Leeds in 2016, was closed in 2020. The chain had reported losses in its years since incorporation.

Lockdown Liquor & Co reports that it has agreed a new partnership with C&C group. It says ‘under the new agreement, Lockdown Liquor & Co’s full range of premium cocktails will be exclusively distributed through all C&C GB’s wholesale businesses: Tennents Wholesale, Bibendum Wine and Matthew Clark. C&C says ‘Lockdown Liquor is a fantastic example of a business that was born from the pandemic’ and adds ‘we are delighted to partner with them, increasing our ever-growing portfolio of agency brands.’

Treasury Wine Estates is to buy Napa Valley winery, Frank Family Vineyards, for a transaction value of $315m.

Byron Burger owner, Famously Proper, has said that its newly-acquired chicken brand, Mother Clucker, could be good for 50 sites in the UK over the medium term.

LEISURE TRAVEL & HOTELS:

The CAA has recommended that would-be travellers use the £132m worth of unspent vouchers that were issued during the pandemic before they lose financial protection. Atol says ‘with over £130m of Atol refund credit notes yet to be redeemed, and international travel opening up again, we want to remind consumers to redeem any unused credits to make sure they do not lose out.’

Travelodge has announced it will be opening four new hotels ahead of Christmas. The units are in Elephant and Castle and Manor House in London (both already open), with a further one in Walton-on-Thames in Surrey and a fourth in Newcastle.

Travel Weekly reports agents as saying that cruise sales are bouncing back quicker than anticipated as ships return to service and new vessels enter the market.

TUI has said that bookings should grow for next year. The group told Reuters that ‘the announcement of the opening of the USA to tourists alone has spurred demand. Incoming bookings already show that clearly.’

Savills has said that UK hotel transaction volumes for this year as a whole are set to total £4.1 billion and appetite is set to increase further.

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Staycity is opening its largest Wilde Aparthotel in London’s Paddington.

Parkdean Resorts has announced a partnership with the Army Central Fund which will allow the British Army to offer specially selected serving personnel and their families holiday breaks across nineteen holiday parks in the UK. It says Parkdean Resorts will provide free accommodation, in addition to entertainment passes and a discount on food and beverage available at restaurants and bars on park.

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Virgin Atlantic has declined to comment on press speculation that it is considering a £400m fund raise.

OTHER LEISURE:

The Rank Group yesterday updated on its VAT refund claim saying that it ‘has reached agreement with HMRC on the quantum of its claim for the refund of VAT paid on slot machine income in the period from April 2006 to January 2013.’ It says ‘the refund has been agreed at £77.5m and should be received by the Group shortly.’

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Zoom has reported Q3 numbers ahead of expectations. It reported revenue of $1.05bn (vs forecasts of $1.02bn) and EPS of 111c vs estimates of 109c. Revenue is up 35% on Q2. The shares, prior to the announcement, had given back earlier year gains and were down 28% on 2021 to date.

Netflix has announced that it has bought Scanline, the visual effects company that was involved in the effects on programmes including Game of Thrones and Stranger Things. Netflix says ‘going forward, the company will continue to operate as a standalone business and work with their variety of clients. Netflix will invest in Scanline’s pipeline, infrastructure and workforce.’

Video games company Frontier Developments saw its shares fall by 32 per cent yesterday as it missed sales targets.

FINANCE & MARKETS:

After PM Boris Johnson’s disturbed speech to the CBI yesterday, Labour’s Kier Starmer has said ‘when business profits, we all do.’ He says the Labour Party will not simply throw money at problems. He seems set to launch a charm offensive aimed at winning over business.

Sterling weaker at $1.3388 and $1.1917. Oil price up at $79.04. UK 10yr gilt yield up 6bps at 0.93%. World markets mixed yesterday but London set to open down around 42pts as at 7am.

RETAIL WITH NICK BUBB:

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