Langton Capital – 2022-01-20 – JDW, Deliveroo, City Pubs, Entain, Gym, G4M, Revolution Bars, PFD etc.:
JDW, Deliveroo, City Pubs, Entain, Gym, G4M, Revolution Bars, PFD etc.:A DAY IN THE LIFE: I was reminded yesterday that popping the top off a bottle of frozen beer is a rather hazardous exercise in that, not only will you get a shock when the cap pings off your head and flies into the slips, but you’ll be squirted in the face with pressurised beer a fraction of a second later and, whilst that might be great on the podium after a Grand Prix, it’s not much fun if you’re wearing a suit. Or even casual gear for that matter so, in the hunt for someone or something to blame, I gave the office mini-fridge a sound thrashing before calming down, realising it didn’t have a temperature dial, was the budget end of a budget retailer’s own-label, ‘budget essentials’ range, and probably cost the firm less than a hundred quid ex-VAT more than a decade ago. Apply a 20pc depreciation rate to that on a reducing balance basis, once an accountant, always an accountant, and it’s in the books at around a tenner so maybe, just maybe, I only had myself to blame and, if you’re going to be splashed in the face with something, rather it be beer than red wine or blackcurrant juice. And, rather than waste a decent bottle of beer, it went in the casserole. A blizzard of trading updates today so 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 JD WETHERSPOON – Q2 & H1 UPDATE CONFERENCE CALL: Following its Q2 & H1 update, JD Wetherspoon hosted a conference call for analysts and our comments thereon are set out below: Trading: • Can you split out the impact of discounting? Very hard to do this. How much did prices drop? Complicated by the rise in VAT from 5% to 12.5% (and accompanying price rises). Won’t give a number. • Different age-group of customers? Pre-Omicron, fewer older customers had returned to pubs. This ‘remains the case’. Trends are now blurred by Omicron. • Very recent trading? That is, are Omicron already receding? Not seen ‘too much difference’. Things have ‘settled down at a slightly better rate than pre-Christmas’. Confidence may be slightly better. But not materially. • London vs provinces? London ‘is still the slowest area in which we trade’. • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: Plan B restrictions are to be dropped in England from next Thursday, 26 Jan. Advice to work from home and the use of Covid passports will also both be dropped. Face coverings on public transport will no longer be mandatory. The reaction from trade bodies and corporates has been positive, though there are further requests for taxpayer help. Further down the line, the government has said it will end the legal requirement for people to self-isolate after they test positive for Covid. • See premium. Reply to this email to upgrade. Rising costs: The oil price is at a 7yr high, fuel costs are about to rise sharply for consumers as the fuel cap ends and VAT on food and non-alcoholic drinks in pubs & restaurants is to rise from 12.5% to 20% in April. Overall, the ONS reported yesterday that the rate of increase in Consumer Prices was 5.4% in the year to December. This is the highest level for 30yrs and is ahead of wage growth, which is around 4.1%. National Insurance will rise for both employers and employees in April, suggesting that the cost of living squeeze will get worse before it gets better. • See premium. Reply to this email to upgrade. The squeeze on consumers: With costs rising faster than wages, the consumer squeeze is on. Energy costs, National Insurance and VAT on pub food will all push this further in the coming months. • See premium. Reply to this email to upgrade. Lumina Intelligence’s latest Eating and Drinking Out Panel shows that average spend per head declined by 30.7% to £10.27 in the four weeks to 26 December. Overall participation in the eating and drinking out market fell from 55% to 53%, however breakfast, brunch and snacking occasions all saw a rise. • See premium. Reply to this email to upgrade. Sales of Cognac in China increased by 56% last year compared to a modest 8% growth in Europe. A total 223.2 million bottles of Cognac were shifted globally in 2021, a YoY increase of 16% in volumes. Delivery. Delivery in the US. Trade press suggests aggregators during the pandemic have benefited in an environment that has threatened many restaurant operators with economic failure. • See premium. Reply to this email to upgrade. The Oxford Partnership has said that inflation, at a 30 Year high, will squeeze consumer’s wallets, but it says a return to Plan A provides hope for hospitality. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Deliveroo plc has updated on trading for 2021 saying that it had a strong finish to the year. It says a ‘strong Q4 completes excellent year of growth in 2021, with full year pro forma gross transaction value up 70% year-on-year in constant currency – the top end of previously-upgraded guidance for 60-70% growth.’ • See premium. Reply to this email to upgrade. City Pub Group PLC has updated on trading for the 52-week period to 26 December 2021 saying that ‘the Group generated a 38% increase in revenue to £35.4m in 2021, compared to £25.8m in 2020, as a result of pubs being less affected by closure and restriction.’ • See premium. Reply to this email to upgrade. Revolution Bars Group has updated for its H1 TO 1 Jan saying that ‘as previously reported, LFL sales for the majority of the half, from 19 July 2021, when restrictions were relaxed in England, to 13 November were very strong at +14% versus the comparable period two years ago.’ It updates for Christmas. • See premium. Reply to this email to upgrade. Premier Foods has updated. The company says it has had a strong Q3 (to end December) and it is upgrading full year expectations. • See premium. Reply to this email to upgrade. Nightcap acquires Exeter pub John Gandy’s for its first Cocktail Club in the South West. The acquisition brings the chain up to 14 sites and is set to open in April. East Imperial has signed a long-term distribution agreement with Republic National Distributing Company (RNDC), one of the largest distributors in the US operating across 37 states. The deal will bring the company’s ‘ultra-premium’ brands to the US. Temper, the open fire barbecue restaurant chain, is set to open a fourth site, located at 78 Great Eastern Street in Shoreditch, London. Lion, the Australian brewer, is set to sell Fourpure and Magic Rock after ‘difficult’ two years in the UK. LEISURE TRAVEL & HOTELS: Rental Republic, trading under the online brand Travelopo.com, has collapsed. The failure emerged as the company was criticised by the advertising watchdog for claiming to be ‘the number one holiday website on the planet’. Skyscanner’s global flight data shows that Mexico and the Maldives are the long-haul destinations of choice for many European travellers. UK travellers are favouring the US, with Orlando and New York the top spots. Savills reports that the Scottish hotel market saw investment volumes reach £185m in 2021, which represents a 166% increase on the £70m transacted in 2020 and is 12% up on the 2019 total of £165m. Domestic buyers accounted for 54%, while international buyers represented 46% of 2021 transactions in Scotland. • See premium. Reply to this email to upgrade. Crystal Cruises is suspending its operations as its owner, Genting Hong Kong, makes moves that could see it be wound up as it faces debt and cash flow issues. • See premium. Reply to this email to upgrade. OTHER LEISURE: Entain has updated on trading. Ditto Gym & G4M. • See premium. Reply to this email to upgrade. BBC director general Tim Davie said he still thinks ‘the BBC can offer extraordinary value for £13 a month’ after government plans will leave the broadcasting company with a £285m gap in funding from its six-year licence fee settlement with ministers. Davie said there was ‘no doubt’ the deal would affect the broadcaster’s frontline output. FINANCE & MARKETS: Inflation. See also Pubs & Restaurants above. Bank of England governor Andrew Bailey is rowing back on his suggestion that inflation is transitory. He says there is now “great concern” that inflationary pressures in the UK economy could be more deep-seated that the Bank expected. • See premium. Reply to this email to upgrade. The Bank would appear to be softening people up for a 3 February interest rate rise. Oil prices are at their highest in 7yrs. Sterling higher at $1.3623 and €1.2003 as markets bet on higher interest rates. Oil price up at $88.38. UK 10yr gilt yield up 5bps at 1.26%. World markets mixed yesterday with London set to open around 46pts higher as at 7am. . RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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