Langton Capital – 2021-11-25 – M&B full year, labour, supply, inflation, demand, Black Friday etc.:
M&B full year, labour, supply, inflation, demand, Black Friday etc.:A DAY IN THE LIFE: So, whilst I’m not a big fan of the Strictly I’m a Celebrity Bake-Off’s Got Talent kind of TV format, I can’t claim to be completely immune to its draw either and, provided the texts are free, I’m as likely to throw someone who’s irritated me into a vat of spiders as is the next man. Not entirely something to be proud of and furthermore, to the extent that Get Me Out of Here and other programmes keep punters out of the pubs, I feel as though I should be doing something actively to undermine their appeal rather than bolster it. Hence maybe I’ll go cold turkey, quit them all for the rest of November and December and get down the pub instead. The might last as long as it takes me to find out that IPA in London costs £6.25 a pint and the TV’s free but let’s see, shall we? Third win on the trot for Hull City last night, can’t be all bad. 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 MITCHELLS & BUTLERS FULL YEAR NUMBERS: Mitchells & Butlers has this morning reported full year numbers and our comments are set out below: Headline numbers: • M&B reports total revenue for the year, which was impacted heavily by the Covid pandemic, of £1.065bn compared with £1.475bn in the prior year. • The loss before tax is £42m vs a loss to Sept 2020 of £123m. The basic loss per share is 11.5p vs a loss last year of 23.6p. • The company reports that it has seen LfL sales growth of 2.7% in the first 8wks of the new financial year with total sales growth of 0.5% • M&B says it has ‘strengthened [its] balance sheet through successful £351m equity raise and refinanced debt arrangements.’ • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: Stint, a service provider that connects students to hospitality businesses for short shifts of work, says that the industry could be facing a difficult trading period. Dealing with supply – and particularly that of labour rather than demand – it says 2021 may be ‘a second tough Christmas for hospitality as vacancies set to hit all time high.’ It says ‘job vacancies in the hospitality sector could hit a record high of 163,000 in December – a 279% increase on ten years ago.’ It is calling ‘on the Government to increase the Employer National Insurance Contribution threshold to enable restaurants to attract more staff.’ • See premium. Reply to this email to upgrade. Inflation: Yesterday, Britvic faced a series of question about inflation on its analysts’ conference call. It said it was facing input price inflation of ‘mid to high single digits’ but said this would have been higher without the mitigating impact of longer term contracts. Pushed on the impact pre-mitigation, it said that spot prices of product (including the labour and transport costs included therein) was up by perhaps ‘high teens’ on this time last year. • See premium. Reply to this email to upgrade. Inflation is also evident in the mix (volume and price) that goes into a lot of F&B companies’ LfL sales numbers. Volumes are down and prices are up. That, in some cases, is generating increased LfL sales numbers – but they may come under downward pressure at some point. Pret a Manger yesterday reported that its sales were nearly back to pre-Covid levels. But the mix has changed. London, airports and mainline train stations are still down but the north of England is ahead of 2019. Pret says ‘on average around the country, we’re back at the level of business we were at before the pandemic hit. But we know we need to keep pushing in London’s business districts and constantly think about new ways to grow our business in those crucial markets.’ • See premium. Reply to this email to upgrade. Demand: Veteran The Times columnist David Smith questions: ‘Will consumers spend, when faced with rising inflation and higher taxes?’ • See premium. Reply to this email to upgrade. Product supply: Speaking of the situation globally, Alix Partners comments on supply saying fears over Christmas availability has fuelled runs on turkeys and Christmas pudding. It says ‘the consensus view seems to be that these issues are transitory and will work themselves out in the short to medium term’ but questions whether this is true, saying ‘from our perspective, this point of view underestimates the fundamental realignment of global supply chains that was already underway before COVID-19 but has been accelerated (like so much else) as a result of it.’ • See premium. Reply to this email to upgrade. Interestingly, research by KSA Group reported by www.companyrescue.co.uk shows that ‘there was a 30% increase in liquidations and administrations of companies in the haulage industry in the months from July to October 2021 when compared to the same period in 2019. In total during that those 4 months 117 went bust in 2021 and 90 in 2019.’ • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Christmas product availability: Shane Brennan, CEO of the Cold Chain Federation, told the Commons Transport Select Committee there was likely to be less choice as retailers cut range to ensure they can deliver core products. • See premium. Reply to this email to upgrade. The WTSA and 48 of its members have written to the Transport Secretary calling for urgent action over the disruption to freight and HGV driver shortages, which it warned could see drinks disappear from shelves. • See premium. Reply to this email to upgrade. Property REIT New River has reported H1 numbers today. CEO Allan Lockhart says ‘we are pleased to report that in the first half of FY22 our operational and financial metrics have improved significantly.’ He says ‘we have strengthened our balance sheet with LTV reduced from 51% at year end to 39% as a result of stabilising valuations and £236 million of disposals in the first half, including the disposal of Hawthorn.’ Regarding retail, he says ‘rent collection is moving to a normalised position and we have maintained our leasing momentum with average pricing exceeding valuers’ ERVs over the last twelve months.’ SALT, a Yorkshire-based craft brewery, has acquired a brewery and two tap rooms in London. The brewery, based on White Hart Avenue in Greenwich, will more than double the production capacity and the tap rooms will be located in Market Yard in Deptford and Royal Arsenal in Woolwich. Hostmore’s new cocktail bar and restaurant, 63rd+1st, will be opening its fourth location – in Cambridge – in spring next year. Hotel Chocolat reports ‘ahead of the Group’s key trading seasons, the business remains well positioned and recent trading remains in line with management expectations. The Board will provide a further update to shareholders at its half year trading statement in January 2022.’ Lidl plans to expand from its current estate of 880 stores to 1,100 by 2025, creating 4,000 new jobs. The company reported revenues up 12% to £7.7bn in the 12 months to the end of February. The first Leon outlet to open in Milton Keynes will open its doors in an ASDA supermarket later this week. South Korea saw whiskey imports up 70% in the first 10 months of the year, coming to a value of $93.2m. The spike represents the first on-year increase in the country’s whisky imports since 2014. LEISURE TRAVEL & HOTELS: Travel Weekly reports Global Rescue claims that Covid-19 fears are subsiding and travellers are significantly less concerned about taking domestic or international trips. Global Rescue found that three out of four people said they are ‘less’ or ‘much less’ concerned about travel today compared to the beginning of the pandemic. The company also found that fear of Covid-19-related quarantine or infection while traveling declined by 37% compared to January 2021. Research from Zonal and CGA shows that fewer than half of holiday park guests said technology for at-table ordering (45%) and table bookings (42%) were available on their latest visit, as staycationers demand better technology. • See premium. Reply to this email to upgrade. Center Parcs is facing pressure from green charities over its plan to build a £350m holiday resort at the heart of ancient Sussex woodland. In a joint statement penned by the Woodland Trust, Sussex Wildlife Trust, CPRE Sussex, Sussex Ornithological Society and RSPB the group wrote ‘the inevitable loss of habitat would make a mockery of the Government’s commitments to address climate change and its manifesto pledge to expand the acreage of protected landscapes and to plant 30,000 hectares of new trees by 2024.’ Offers have been appearing in the travel industry linked to Black Friday. There are new announcements out from easyJet holidays, Travelsphere, Globus, Cosmos and others. Booking Holdings, owner of Booking.com, is set to acquire Swedish flight booking OTA Etraveli for £1.63bn. Booking Holdings just acquired US-based B2B hotel rooms distributor Getaroom for $1.2bn a few weeks ago. FINANCE & MARKETS: The Guardian and several other papers, some perhaps with mischievous intent, are reporting a rising degree of disquiet with PM Boris Johnson’s handling (or failure to handle) current affairs. • See premium. Reply to this email to upgrade. Ex-Bank of England governor Mervyn King has said that some central bankers, maybe even his own successors, are ‘doing a King Canute’ in that they are hoping that their denial of inflation will make it go away. Current governor, Andrew Bailey, has said that inflation is transitory. That view may be subject to change. He denies being an unreliable boyfriend. • See premium. Reply to this email to upgrade. To QE or not to QE. Not reining back QE in the good times means it might need to be reigned back in the bad. That would push up interest rates further than they may otherwise have needed to go. New Zealand’s central bank has raised interest rates for the second time in two months. Rates are now 0.75%. The South Korean central bank has raised interest rates for the second time this year in order to combat inflation. It has now put rates up by a quarter of a percentage point to 1%. The Nationwide says that first time buyers now need to pay around 5½ times annual earnings to get on the property ladder. Sterling mixed at $1.3341 and €1.1901. Oil price lower at $82.40. UK 10yr gilt yield up 1bp at 1.01%. World markets mixed but Far East better in Thursday trading and London set to open up by around 24pts. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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