SSP, GAW, TUI, Hostmore, consumer spending, regulation & other:

A DAY IN THE LIFE:

We live in a world drowning in data.

There are various stats out there saying things like ‘90% of the world’s data was generated in the last two years’ (a genuine estimate but already out of date before the ink on the statement was dry, of course) and it does bring home the vital differences between data, information, knowledge and, critically, any guidance on how that knowledge would be best-used.

Because a massive pile of till receipts (or the electronic equivalent), a list of temperatures at midday in Middlesbrough and a virtual phone book with numbers, names and addresses for the UK as a whole are all data, but this isn’t much use unless it is mined, refined and interpreted.

And at the micro level, such real world data could include the fact that it snowed yesterday afternoon, sales at the Dog and Duck were about a grand, pretty good for a Tuesday, but the unit is 40% food, VAT’s going to ‘normalise’ on April Fool’s Day next year, the operator hasn’t been able to forward-buy his power for 2022 and half his staff have resigned to serve pizzas as the Franco Manca down the road put its wages up by 20% in August.

All of the above information goes in the pot and (caution here, Langton is a firm of analysts) that’s where the analyst comes in to try to add a bit of value. On to the news, the analysis is in the premium version:

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CURRENT UK REGULATIONS IN CONTEXT:

Trade operators and representative bodies are making their views known re any further potential tightening of restrictions.

They don’t want any further tightening and they want more financial aid. But maybe we don’t know when we’re well off as the UK (let alone England) isn’t operating in a vacuum and it may be worth having a quick look at what’s going on around us to our nearest geographic neighbours.

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BARCLAYCARD NOVEMBER SPENDING REPORT:

Barclaycard has updated on consumer spending for November. The data was collated before the appearance of the Omicron variant. Barclaycard says ‘consumer spending grew 16.0 per cent in November as early festive pursuits boosted retail, hospitality and leisure.’ It says ‘spending on non-essential items saw its highest increase since before the pandemic, with growth recorded across many sectors.’

Stay at home Brits?

• Barclaycard says the ‘colder and darker evenings’ led to ‘surges in spend on takeaways, subscriptions, and electronics.’ It says ‘spending on essential items rose 12.5 per cent – slightly less than in October (13.2 per cent), as spending at supermarkets (13.0 per cent) and specialist food and drink stores (64.7 per cent) recorded marginally smaller month-on-month increases (14.2 per cent and 69.2 per cent respectively).’

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PUBS & RESTAURANTS:

Kantar reports that the average cost of a typical festive meal for four has risen by 89p, year on year (or 3.3%) to £27.48. This is actually by less than the current rate of inflation. Kantar says that, whilst carrots are cheaper, the cost of frozen turkey was up 7%, Christmas pudding up 5% and Brussels sprouts rose 5%. Cauliflower cost 5% more and gravy granules rose 3%.

Springboard reports that the Omicron variant is starting to impact shopper behaviour in Britain, with its central London ‘Back to the Office Benchmark’ footfall falling 2% in the week to 4 December. Overall UK shopper numbers, or footfall, rose 0.7% versus the previous week and was up 0.5% in central London.

Nicola Sturgeon has said she expects to see the numbers of Omicron cases to increase over the next few weeks, ordering Scots to work from home wherever possible until mid-January. She vowed to consider the need for further Covid measures on a daily basis, including measures such as Covid passports.  

French prime minister Jean Castex has ordered nightclubs to close for four weeks from this weekend to counter a Covid surge that has put hospitals under severe strain. The government stopped short of imposing stricter measures for the general population or targeting the non-vaccinated.

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COMPANY & OTHER NEWS:

SSP Group has reported results for year ended 30 September 2021 saying that it has ‘delivered a resilient performance in a very challenging market, materially strengthening its balance sheet and continuing to demonstrate tight control over its operating costs and cash usage, and is in a strong position to benefit from the expected recovery of the travel market over the medium term.’ The group says revenue was £834.2m, down 41.8% vs 2020 and 70.1% vs 2019. The company reports an operating loss of £309.2m on a reported basis under IFRS 16. It says the underlying, pre-IFRS16 operating loss was £209.0m (2020: £211.7m loss). The group reports a loss per share of 51.3p vs a loss in the prior year of 66.2p.

The group says its financial position was ‘strengthened significantly following the Rights Issue in April 2021, including the extension of our main bank facilities until January 2024 and the waiver and amendment of covenants for both the main bank facilities and US private placement notes. The co says it has a ‘growing pipeline of new business to mobilise, comprising approximately 200 units, which is expected to add a further 15% to revenue by 2024, and many new business opportunities emerging.’ SSP announced on 25 November that Patrick Coveney would be group CEO from 31 March next year.

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Newly-listed Hostmore plc has updated on trading saying that ‘for the months of October and November 2021, trading was ahead of the comparable EBITDA achieved in the 2019 financial year. The net booking rate for the Christmas season remains encouraging, with the week up to 5 December 2021 experiencing a net booking rate which was similar to the previous two trading weeks despite the onset of the new coronavirus strain and some inevitable cancellations.’

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AB InBev forecasts 4% to 8% growth in core profit over the next four years as CEO Michel Doukeris highlighted how the beer market had expanded over the past four years. Doukeris also predicted the company will expand its share of the alcohol market in the next four.

Coconut Tree, a Sri Lankan street food chain, is opening a restaurant in Birmingham early next year, taking the chain up to 9 sites. The 1,600-square-foot two-storey bar and restaurant will be based in a listed building at 22 Gas Street. 

Citrus Durham will develop Gregg’s first County Durham stand-alone drive-thru at the £300m mixed-use Integra 61 development.

Big Hospitality reports that the Hakkasan Group has closed its Japanese Sake no Hana on St James’s Street in London. The restaurant’s closure comes after the US-centric Tao Group Hospitality acquired Hakkasan Group earlier this year.

AG Barr has acquired a 60% stake in porridge and oat milk maker MOMA Foods, with the company assuming full ownership of MOMA Foods over the next three years.   

Some Amazon services were out of action yesterday due to computer problems.

LEISURE TRAVEL & HOTELS:

TUI AG has reported full year numbers saying that it came close to breaking even in its fourth quarter, which is traditionally the most profitable of the year. In Q1 of the year just started, the company says it is running at c69% of pre-pandemic sales. The group says that Q4 revenues were €3.4bn, up €2.1bn versus FY20 Q4, ‘reflecting the success of vaccination programmes and the rebound of leisure travel.’

TUI says it has an ‘encouraging pipeline of 4.1m bookings across both Winter 21/22 and Summer 22, with 1.4m bookings added since 3 October (2.7m bookings).’ The group says ‘trading continues to be in line with winter capacity assumption of ~60% to ~80%, with Q1 already 93% sold, if current sentiment prevails, winter capacity will likely be modified towards the lower end of our assumptions.’ The co says ‘summer 2022 is well-booked and in line with current capacity assumptions.’

TUI says it ‘will continue with our disciplined cash management, drive operating effectiveness, maximise opportunities to de-lever and continue our debt reduction in order to return to a solid and healthy balance sheet.’ It says it aims to ‘emerge stronger, leaner, more digitalised and more agile, and ready to exploit market recovery and growth opportunities’ and adds ‘TUI is strategically well positioned and will benefit from the strong rebound in the leisure industry.’

There have been reports of UK residents struggling to find quarantine hotel rooms on their return from South Africa.

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Travel Weekly reports operators as saying that confidence ‘had taken a hit amid tightening restrictions on international travel, but reported few cancellations after a second weekend of extra measures being announced by the government.’

In a move aimed at pulling what money there is available earlier, Jet2.com has put winter 2022-23 on sale. The company will operate ski services from 10 UK airports to the Alps and the Pyrenees for winter 2022-23.

MD of STR Robin Rossman has said ‘We’re still in mid-pandemic, but hotel occupancy is staggeringly well recovered – the UK at an average 70% occupancy, the Middle East at 90%. The range in Europe has varied depending on the reliance on international or domestic markets, but the UK is up to 95% recovered [to 2019 levels].’

Alex Shamash, and joint venture partner Boscalt Hospitality have secured a £34.3m loan from OakNorth Bank. The capital will be used to convert the 15 Old Bailey property from office space into a new luxury hotel, restoring it to its former use whilst preserving its ‘unique history’.  

OTHER LEISURE:

Games Workshop has updated on trading saying that ‘trading since the last update in September 2021 is in line with expectations.’ The board expects H1 sales of ‘not less than £190 million (2020: £186.8 million) and profit before tax of not less than £86 million (2020: £91.6 million).’ The co says ‘licensing income has increased to c.£19 million (2020: £8.7 million) driven by significant computer game licensing deals with Nexon and other major licensees. The related guarantee income is recognised on signing the contract in line with our usual accounting policy.’

Instagram announces new features designed to help teenagers and parents manage time spent on the app. The announcement comes a day before Instagram chief Adam Mosseri is due to appear before US Senators investigating online safety.

FINANCE & MARKETS:

The Halifax has reported that house prices rose for fifth straight month last month and says that house prices are rising at their fastest rate in 15yrs. The Halifax says the annual rate of inflation rose to 8.2%. Some caution below on how valuations could have become somewhat stretched.

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The share of wealth owned by the world’s richest people rose during the Covid pandemic according to a major study on inequality, The World Inequality Report. It says ‘2020 marked the steepest increase in global billionaires’ share of wealth on record.’ It adds that the world’s richest 1% has taken over a third of all wealth created since 1995 whilst the bottom 50% took just 2%.

The Treasury has warned that high public sector pay settlements could embed inflation into the system.

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Sterling weaker at $1.3254 and €1.1734. Oil price up at $75.24. UK 10yr gilt yield down 1bp at 0.73%. World markets better yesterday. London set to open around 5pts lower as at 7am.

RETAIL WITH NICK BUBB:

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