Tortilla, McColl’s, IPOs, online taxes, Peet’s Coffee, Dr Pepper & more:

A DAY IN THE LIFE:

So, the start of another full week when the corporate news-flow could be relatively light but where there’s likely to be plenty more occurring on the world scene to keep the markets interested.

The market indicators swung from a suggested positive 100 this morning to their current minus 121 on geopolitics. There are just a smattering of news out this week. Revolution Bars tomorrow, Nichols & some economic stats. A bit early to see whether the crisis in Ukraine has impacted the numbers – and it will be hard if not impossible to disaggregate the impact of the various macro-events that have buffeted the markets over recent months.

And it’s the start of meteorological spring tomorrow. On to the news:

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GENERAL THOUGHTS: THE MARKET FOR SHARE FLOTATION (IPOs):

Client copy.

PUBS & RESTAURANTS:

Cost of living crisis:

Inflation numbers will remain higher for longer as a result of the conflict in Ukraine, according to a number of observers. Bank of America has said that UK households could suffer the biggest annual decline in living standards since the 1950s. Inflation is already at its highest level in 30 years. It will rise further in April when the fuel cap increases and wheat prices have just hit 13 year highs. Gas prices, however, eased back on Friday. The RAC said petrol prices rose to four consecutive record highs last week.

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Inflation – the impact on the consumer:

JP Morgan has said that UK inflation could hit 8%. It points to fuel and food price increases. Oil is at multi-year highs and it points out that Russia and Ukraine are major fertiliser exporters. Delivery costs and fertiliser prices will, all things being equal, impact many if not nearly all, other costs across the economy. The Bank of England, which said that inflation was transient and should be 2% this spring (then raised this to 5%, then 6% and latterly 7.25%) has been raising interest rates this year. This will feed through to prices when property costs are included. The fighting in Ukraine may dampen what would have been further interest rate increases in the coming months.

Delivery

In a sign that companies are attempting to add more capacity, Motortransport.co.uk points out that heavy goods vehicle (HGV) registrations rose by 12.9% year-on-year in 2021, according to the Society of Motor Manufacturers and Traders. It says ‘growth in key industry sectors such as construction saw demand outstrip supply, with truck registrations surging from a locked-down 2020 fall of 32.2%. However, availability was hit by the global semiconductor shortage.

Online sales taxes.

The BBPA has responded to the Online Sales Tax Consultation released by the government saying ‘we welcome the Chancellor’s decision to open a consultation on Online Sales Tax which we have been calling for as part of fairer taxation review. Pubs currently overpay rates by £570million relative to their turnover and an urgent rebalancing is needed.’ CEO Emma McClarkin says ‘within our response we will be recommending the introduction of an Online Sales Tax explicitly used to reduce the burden of rates from physical properties, especially those ones that cannot shift to digital platforms, like the great British pub.’

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Lockdowns:

Sapient Corporate Finance’s Peter Hansen has told the MA Leaders Club conference at Fabric nightclub that further lockdowns will not be announced not least because the government “cannot afford it”.

The London Borough of Hammersmith and Fulham has not renewed its cumulative impact policies for Fulham and Shepherd’s Bush.

Austrian Wine reports that the 2021 Niederösterreich (Lower Austria) vintage has ‘pronounced notes of stone fruit and a creamy, mellow mouthfeel’.

COMPANY & OTHER NEWS:

Tortilla has this morning announced a strategic partnership with Compass Group. It says ‘through the strategic partnership, at least 14 Tortilla sites will be opened by Chartwells [a part of Compass] on a franchise basis across their estate of universities over the next five years.’ It says ‘this is the latest in Tortilla’s continued expansion into new locations and formats beyond the high street, following the opening of sites at Gatwick Airport and Leeds Skelton Lakes Services, in partnership with SSP Group plc.’

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The MCA reports that Tim Hortons will open four drive-thru restaurants in the UK, located in Oldbury in Wolverhampton, Mansfield, Teeside and Portadown. The business opened two drive-thru sites last week taking its total estate to 48 sites.

World Coffee Portal reports that Paris Baguette is set to open its first UK site, located at the Battersea Power Station Development in London.  In July 2021, the bakery and coffee chain announced its intention to operate 100 US stores by the end of 2021.

Keurig Dr Pepper reports full year sales up 9.2% to $12.7bn, driven by growth for its cold beverage portfolio. The company’s Q4 net sales rose by 8.7% to $3.4bn, with its brands Canada Dry, Dr Pepper, Sunkist, A&W, 7UP and Squirt CSDs, Mott’s and Snapple led the Q4 net sales performance.

In the US, JDE Peet reports full year sales up 5.2% to €7bn, with its European consumer packaged goods (CPG) business’ sales up 2.6% to €3.6bn. The company noted ‘particularly strong contributions from the German, French, Polish and Danish markets.’

Alibaba reports Q4 revenue growth of 10%, its slowest rate since going public in 2014, to 242.6bn yuan. Analysts on average had expected revenue of 246.37 billion yuan, according to Refinitiv data. Customer management revenue, a key metric which tracks how much money merchants spend on ads and promotions on Alibaba’s sites, fell 1% year-on-year.

The Mail on Sunday has suggested that Burger King UK’s £600million flotation has stalled due to investor nervousness concerning the invasion of Ukraine and associated uncertainties. BK UK had appointed advisors at Investec, Peel Hunt and Bank of America. Sources tell the Mail the IPO has ‘been delayed, but not indefinitely. It’s market conditions. You have such a big sell-off. The sentiment right now is really difficult.’

Monster Beverage Corporation – with a comment on inflation & supply issues.

Monster Beverage Corporation has reported financial results for the three- and twelve-months ended December 31, 2021 saying ‘the Company achieved record fourth quarter and full-year net sales, with annual net sales exceeding the $5.5 billion mark for the first time in the Company’s history, notwithstanding the impact of the COVID-19 pandemic on the Company.’

The company says ‘despite certain challenges in the 2021 fourth quarter, the Company achieved solid results overall.’ It refers to supply issues when it says ‘during the 2021 fourth quarter, the Company continued to procure additional quantities of aluminium cans from suppliers in the United States and abroad in response to increased consumer demand.’ This will beggar the company’s neighbours.

China Post opened its first ‘Post Coffee’ store in the Xiamen International Trade Building on 14 February. China Post has a network of 54,000 post offices across the country, and the new coffee concept has the slogan ‘drink a cup of coffee and write a letter to the one you love.’

The Royal Lion Hotel in Lyme Regis is to close for refurbishment after being bought by Dorset based brewer & pub co Hall and Woodhouse.

The convenience market. Sky reports that ‘McColl’s Retail Group, one of Britain’s biggest convenience store chains, is racing to secure new funding to stave off a collapse that could put thousands of jobs at risk.’ It says the retailer is ‘working with advisers on attempts to find a buyer or third parties willing to inject fresh capital into the business.’ The company has commented this morning.

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LEISURE TRAVEL & HOTELS:

Clear Sight comments on the international travel market saying that holidays are ‘back on the menu’. It says ‘the proportion of Brits booking an international holiday rose to its highest level in two years during January. Consumers’ comfort with the idea of getting on a plane recovered sharply, though still remains 20+ points below the pre-pandemic norm.’ It says that staycation bookings have hit new highs.

BA cancelled short haul flights from Heathrow over Friday and into Saturday due to a computer problem. Long haul flights operated as planned.

The ECJ has ruled that British nationals living in the EU should be stripped of their EU citizenship now the UK has left the bloc.

IAG, owner of BA, has said ‘a strong recovery is underway’ and it expects its operating result to be profitable from Q2 2022. The company reported an operating loss of €2.8bn in 2021, compared with a loss of €7.45bn in 2020, with passenger revenue rising by 5.9% to €5.8bn.

Viking Cruises has cancelled all 2022 departures on its Kiev, Black Sea & Bucharest itinerary as Russia invades Ukraine. The line said it was also evaluating 2022 itineraries that call in Russia with the view to modifying them where necessary.

Russia has banned British airlines from landing in Russian airports and from crossing the country’s airspace. Russia said the move was a response to ‘the unfriendly decisions by the UK aviation authorities’.

The RMT union has announced three days of Tube strikes next week, due to a pay and pension plans row with the mayor. Industrial action will occur on Tuesday, Wednesday, and Thursday.

Marriott International has signed a management agreement with Cola Holdings and The Westbury Hotel Limited to bring the St. Regis brand to Mayfair. The St. Regis London is expected to welcome its first guests in 2023.

OTHER LEISURE:

The MCA reports that Lane7 has 18 sites in legals across the UK, with the boutique bowling concept targeting 6 openings a year over the next 5 years.

In response the Russia’s invasion of Ukraine, Formula 1 has cancelled the Russian Grand Prix and UEFA has relocated the Champions League final to Paris.

FINANCE & MARKETS:

Sterling mixed at $1.3361 and €1.1975. Oil price higher at $102.62. UK 10yr gilt yield up 5bps at 1.49%. World markets better on Friday but mood soured over the weekend & London set to open down around 121pts.

The Russian rouble has fallen by 30% against the US dollar after the announcement of new sanctions. The currency is trading at another record low.

RETAIL WITH NICK BUBB:

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