Langton Capital – 2022-04-11 – Tortilla, inflation, drink sales, labour market, Whitbread, Nightcap & other:
Tortilla, inflation, drink sales, labour market, Whitbread, Nightcap & other:A DAY IN THE LIFE: Good morning and welcome to another Monday. • See premium. Reply to this email to upgrade. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many 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 PUBS & RESTAURANTS: Food price inflation: The UN says that the Ukraine war led to a ‘giant leap’ in food prices last month to another record high, with ‘war in the Black Sea region spread shocks through markets for staple grains and vegetable oils’. The price of vegetable oils soared 23% while cereals were up 17%. Sugar rose 7%, meat was up 5%, while dairy – which has been less affected by the war – only climbed 3%. • See premium. Reply to this email to upgrade. Energy prices: The MA reports that one operator has said that the rising cost of energy poses a bigger threat to the sector than the pandemic, with no help on the horizon. Bath Pub Company managing director Joe Cussens said ‘this energy crisis has come along and is a different matter altogether, because there are some horrendous cost rises we’re being hit with, and unlike the pandemic, there’s no help coming, in fact, quite the opposite.’ • See premium. Reply to this email to upgrade. Drink sales: CGA’s latest Drinks Recovery Tracker shows that drink sales across the on-trade are still running below 2019 levels. The Tracker says that, in the week to 2 April, sales of beer were down 5%, cider sales were 7% lower and wine was off by 10%. Soft drink sales (helped for a part of the week by lower VAT charges) were down by a lesser 3% and spirits sales, perhaps helped by the popularity of cocktails, were up by 10%. Total drink sales were 2% lower. • See premium. Reply to this email to upgrade. Supply issues: Delays in Dover are currently hitting exports rather than imports. Supply into the UK should not be immediately impacted. Hauliers say they are losing an average of £800 per lorry due to wastage whilst vehicles are sitting in queues. Cost of living crisis: Although knocked off the front pages by Ukraine and the tax affairs of the chancellor’s wife, this has not got away. Reduced pay cheques will only be noticed at the end of the month and the impact of higher energy bills will be staggered. Other costs may have gone up immediately and the Mail reports that the British Chambers of Commerce saying that the ‘chancellor must help businesses out of crushing cost-of-living crisis.’ • See premium. Reply to this email to upgrade. Labour: Another issue that hasn’t gone away. The Telegraph over the weekend reports ‘restaurants face a growing battle for talent.’ It quotes Chris Galvin, co-founder of Galvin Restaurants, as saying ‘restaurants are absolutely desperate.’ Disposable cups: Ireland plans to become the first country in the world to eliminate disposable coffee cup use by introducing the Circular Economy Bill. The bill introduces a mandatory €0.20 ($0.22) charge for disposable cup use, with a complete ban introduced for sit-in customers in cafés and restaurants being introduced over the coming months. Other industry news: The Cross-Party Group on Beer and Pubs is launching an inquiry into the Scottish Deposit Return Scheme and would welcome written evidence from businesses, individuals and organisations about its impact. The Group is interested to explore what this means for Scotland’s beer and pubs sector. COMPANY NEWS: Tortilla Mexican Grill has reported maiden full year results (for the 52 week period ended 2 January 2022) as a listed company. It says it has generated ‘record results’ with revenues up 79.5% to £48.1m and LfL sales up 23.8% compared with 2019. The company says adjusted EBITDA (pre-IFRS 16) increased 262.5% to £8.7m. In 2019, it was £2.5m. The company says it has a ‘strong balance sheet, with net cash of £6.7m at the period end, supports ability to self-fund roll out plans.’ • See premium. Reply to this email to upgrade. Nightcap reports that it is secured a site for a new opening for its Tonight Josephine brand in Liverpool later this year. • See premium. Reply to this email to upgrade. The MCA reports that BrewDog plans to open 27 new bars in 2022, with its latest UK site having opened in Basingstoke on 8 April. Other new upcoming UK openings include Canterbury, Durham, Chester, Bristol Harbourside, Ipswich, Lincoln and Waterloo. BrewDog featured in the Sunday Times yesterday, where co-founder James Watt ran through some of the travails of the last year. McDonald’s Restaurants has acquired its largest UK franchisee, Appt Corporation, which has 43 sites. McDonald’s says ‘we can confirm that McDonald’s Restaurants Limited has completed a buy-out of Atul Pathak’s shares in APPT Corporation, meaning its restaurants are now owned and operated by McDonald’s Restaurants Limited.’ The Sunday Times carries an interview with Pret boss Pano Christou. The Times says ‘Pret and its rivals are being forced to hike prices as they stare down the barrel of double-digit inflation, while the same rise in the cost of living threatens to dent consumer spending.’ Serial sector investor Imbiba has invested £5m into Big Fang Collective, the Liverpool based entertainment venue operator, which runs the Ghetto Golf concept. Imbiba says ‘today, the collective boasts venues in four cities; Birmingham, Liverpool, Newcastle and Glasgow, across its Ghetto Golf, Golf Fang and Birdies Bar brands.’ Constellation Brands last Thursday reported Q4 numbers saying that sales rose to $2.103bn from $1.953bn in the prior year. Net income was $395.4 million or $2.07 per share in the fourth quarter, higher than $382.9 million or $1.95 per share in the same quarter a year ago. Westrock Coffee, the beverage solutions provider, is to list at around $1.1bn via a merger with Special Purpose Acquisition Company, Riverview Acquisition Corp. Sainsbury’s will raise pay for its outer London staff to £11.05 to match their inner London colleagues. It means all Sainsbury’s shop workers will get the voluntary Real Living Wage, which is higher than the compulsory National Living Wage. Walmart’s Indian e-commerce company Flipkart has internally raised its IPO valuation target by around a third to $60-70 billion, and now plans a U.S. listing in 2023 instead of this year. HOLIDAYS & LEISURE TRAVEL: Travel Weekly reports that the cost-of-living crisis has yet to hit sales, but travel agents warn that the critical time will be when summer holiday balances are due. Jill Waite, director of Pole Travel in Manchester, believes some families will be forced to forfeit holidays. • See premium. Reply to this email to upgrade. Outgoing Whitbread CEO Alison Brittain is reported to have asked the company not to pay her an accrued £729k bonus in light of the fact that the company was in receipt of significant taxpayer cash during lockdown. • See premium. Reply to this email to upgrade. Charlie Cornish, chief executive at Manchester Airports Group, apologised to passengers for the recent disruption and delays – and pledged to improve service levels. P&O Ferries last week cancelled plans to resume services at the weekend and told passengers to book with another operator. It said on Twitter on Friday ‘all P&O Ferries Passenger Services are suspended this weekend. For travel 8/9/10th April please re-book directly with another operator before arriving at the port. DFDS will not be able to transfer P&O customers onto their services.’ STR reports that US hotel performance ‘fell slightly from the previous week’ in the week to 2 April. Occupancy was 64.1%, down 6.4pps from the same week in 2019. Achieved room rate was up 11.7% and REVPAR was some 4.5% higher. VisitEngland forecasts that 7.4 million people plan an overnight holiday in the UK for the Easter weekend, bringing levels back to pre-pandemic 2019 levels. The domestic break forecast by VisitEngland would provide an estimated £1.8 billion boost to the economy. CBRE Investment Management has awarded Clegg Construction a £16m contract to build a Premier Inn hotel in York, the sixth in the city. The 188-room hotel will be on the site of a former Carpetright store in Peasholme Green. OTHER LEISURE: The Daily Mail reports that Cineworld boss Mooky Greidinger saw his pay nearly double to £1.48m in 2021 despite the company posting a pre-tax loss of around £542m as its cinemas remained closed for part of the year due to lockdown restrictions. Elon Musk is reported to have U-turned and decided not to join the board of Twitter, a company in which he is the largest shareholder with a 9.2% stake. FINANCE & MARKETS: Problems with post-Brexit IT systems are said to be contributing to delays for lorries attempting to cross the Channel. A 23-mile coastbound stretch of the M20 has been closed. The Kent Resilience Forum has told the BBC that disruption is at its worst since 2020. Ukraine’s economy is reported to have been cut by around a half as a result of the war in the country. The ONS has reported that the UK economy grew by just 0.1% in February. The BCC says ‘while economic output continued to rebound in February, the significant slowdown in growth indicates that the UK economy was losing steam even before the impact of Russia’s invasion of Ukraine.’ • See premium. Reply to this email to upgrade. Sterling lower at $1.3015 and €1.1955. Oil price unchanged at $100.57. UK 10yr gilt yield up 3bps at 1.76%. World markets heading lower on Friday and in the Far East this morning. London set to open down around 34pts as at 6,45am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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