Whitbread FY, PPHE update, Carlsberg, discounting, Vianet, labour etc.:

A DAY IN THE LIFE:

So, is ‘rewilding your garden’ really a thing or is it just cover for a CBA mindset whereby you can’t be bothered to cut the grass and would rather spend your time sitting in a deckchair, reading a book a book and swigging beer?

Because yes, butterflies love dandelions, ladybirds dig nettles and hedgehogs, and the various bugs and microscopic vermin that they eat care, for some reason, choose to inhabit piles of rotting twigs but hey, let’s get real, might not the above be a by-product of what’s going on rather than be the prime reason for the (in)action?

At least it can often look like that to the naked eye as, in the same way that you can often squeeze another cup of tea out the pot, maybe the grass will go another day, two days, a week without a cut…?

Asking for a friend, of course but, with a long weekend just around the corner, I must get some more beer in. On to the news:

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WHITBREAD – FULL YEAR NUMBERS:

Whitbread has released its full year numbers and our comments thereon are set out below.

Headline numbers:

• Whitbread reports that it has seen ‘continued significant market outperformance in the UK, driven by the strength of our commercial and operational initiatives along with the inherent strengths of our brand, scale and direct distribution.’

• The company says that revenue was £1.70bn for the year under review compared with £589m for FY21 and £2.07bn for FY20

• The group says that adjusted EBITDA was £472.6m against a loss of £194.9m last year and an EBITDA profit of £752.7m in FY20.

• Whitbread reports a statutory profit of £42.5m against a loss of £906.5m last year and a profit of £217.9m in FY20

• Adjusted EPS this year is a loss of 2.5p a share versus a loss of 287.6p in FY21 and a profit per share of 166.3p in FY20.

• In a clear indication that the company is signalling a return to normality, the dividend has been reinstated for this year at 34.7p (FY20 nil, FY21 32.7p).

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PUBS & RESTAURANTS:

The Campaign for Real Ale (CAMRA) and UKHospitality call for the government to make this year’s extra bank holiday a permanent fixture. The new holiday would be called ‘Thank Holiday’ with CAMRA saying that previous Government evaluations likely overestimated the economic cost of a new permanent bank holiday by 64%.

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With the Chancellor making clear to ministers that there was no money available to fund schemes to help hard-pressed households, the government is considering alternative measures, such as a plan to lower MOT test intervals from one to two years. 

Lumina Intelligence reports that Greggs, Costa, and Gail’s are expected to lead the growth in the value of the coffee, sandwich and bakery market segment in 2022.

Thinktank UK in a Changing Europe (UKICE) reports that Brexit has pushed up the price of food imported from the EU, with trade barriers producing an extra 6% price increase in food. Households across the UK are on track to suffer the worst living standards squeeze since the 1950s amid soaring inflation driven by the rising price of energy, food and fuel.

Kellogg’s has launched a legal challenge against new government rules that would stop some of its cereals being prominently displayed in shops. In October, new regulations come into effect restricting the promotion of food and drink with high fat, salt and sugar content.

Rising costs:

Inflation feels pervasive and it may have become embedded as a result of fuel and energy price rises. Yesterday, serviced offices provider IWG warned that its costs are rising more than expected as a result of increased heating and lighting costs. The company will be far from alone in this regard.

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Discounting:

M&B’s Sizzling Pub Co is offering 2-4-1 burgers on key evenings over the next three weeks. It says ‘treat yourself to our two-for-one burger deal, available Fridays & Saturdays after 5pm from 29th April until 14th May.’ It says ‘nothing beats big, mouth-watering burgers and a chat at your local – that’s a fact.’

Labour issues:

The BCC comments on staffing issues across the wider economy when it says that 78% of firms are currently facing difficulties in finding staff. It says ‘hospitality, construction, logistics and manufacturing firms [are the] most likely to report difficulties (80% or higher) but all sectors have significant issues.’ The BCC says ‘smaller firms [are] reporting increasing wage pressures are making it harder to compete for staff.’ It says ‘the hospitality sector was facing the most challenging recruitment issues, with 85%, reporting difficulties, up from 83% in Q4 2021. This was closely followed by construction on 83%, logistics on 81% and manufacturers at 80%.’

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The wine market:

KAM Media says that ‘customers are crying out for support when buying wine’ adding that ‘1-in-3 customers don’t feel confident ordering wine in pubs, bars and restaurants, with 1-in-9 admitting that they often find the experience intimidating.’ The research, in partnership with Hallgarten & Novum Wines, finds that ‘70% of wine drinkers don’t feel that pubs and bars provide enough information to help them make an informed decision when ordering wine.’

KAM suggests that helping customers could boost sales. It says ‘for a category that is as emotive as wine, it should be seen as a warning that 1-in-3 wine drinkers say they don’t feel confident when ordering wine in a pub, bar, or restaurant. Whilst the layout and copy on menus is critical in helping give greater clarity and confidence for customers, there is also obviously a key role for staff to play when it comes to breaking down this confidence barrier. Nothing can replicate the ease at which well-trained and knowledgeable staff can put the customer when guiding them through their selection.’

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Retail sales:

Sales slipped markedly in April reports the CBI via its Distributive Trades Survey. It says the balance of members expecting sales to rise over fall was minus 35 in April versus a positive 9 seen in March.

COMPANY NEWS:

Carlsberg has updated on trading saying that it sees total organic volume growth of 9.1% this year in Q1 with reported growth of 8.6%. It says total organic volume growth in Western Europe was 15.4%, Asia 10.5% and Central & Eastern Europe down 2.1%. The group expects ‘organic operating profit development of around -5% to +2%.’

Vianet has updated on full year numbers saying that ‘we continue to work with our suppliers to mitigate the impact of the global semi-conductor supply shortages on customer installation programmes.’ It says ‘we are pleased to confirm the strong recovery in the Group’s revenues through H2, with full year turnover expected to be up 55% to almost £13.0m (FY 2021: £8.4m and FY 2020: £16.3m).’

SushiDog will open a new site in Soho next month, adding to its current estate of 2. The company also plans a further site in the summer in the City on Bishopsgate.

Made of Dough is opening Palazzo, an Italian Bar & Diner, in Crystal Palace next month. The site will have a late-night licence on weekends and will feature a line-up of DJ nights. The 2,000 sq ft site will have 80 covers across the ground floor with an alfresco terrace set to open in July.

Amber Taverns. Propel reports that Amber Taverns has appointed Sapient Corporate Finance to advise MxP Partners, which has owned the business since 2014, on its options, which could include a sale of the business. It reports that Amber Taverns and Sapient declined to comment.

AB InBev is facing the threat of strike action at its Samlesbury site, near Preston. The staff have rejected a 2% pay rise. The GMB union says ‘this industrial action is a result of Budweiser Brewing Group’s management making a frankly insulting pay offer.’

Chipotle in the Us has reported that it passed the 3,000 locations milestone during Q1 2022. It says it will open between 235 and 250 new restaurants in 2022 as a whole. The group says it is about halfway to its goal of reaching 7,000 restaurants in North America.

HOLIDAYS & LEISURE TRAVEL:

Royal Mail and DHL have been brought in by the government to help clear the passport backlog. PM Boris Johnson is expected to call Passport Office bosses for urgent talks next week. The surge in demand has come after the relaxation of Covid travel restrictions – compounded by the fact that more than five million people delayed applying for renewals or new passports amid the pandemic. 

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Meanwhile, Travel Counsellors reports current sales up 30% on pre-pandemic levels, citing its technology as ‘key’ to its success. The homeworking agency is investing a record amount of £7 million in its technology platform over the course of a year.

PPHE has updated on Q1 trading saying it has made a ‘strong start to FY22, underpinned by encouraging growth in leisure demand.’ CEO Boris Ivesha says ‘following the easing of the remaining restrictions across the Group’s operating markets during the quarter, PPHE delivered a positive trading performance, particularly driven by the Group’s UK portfolio. Across a range of operational metrics we are seeing very good progress and, in some cases, improvements on pre-pandemic and pre-Omicron comparatives.’

Glenigan’s construction industry intelligence reports that the hotel construction sector is preparing for a bumper period of activity with £2.5 billion-worth of projects in the development pipeline. The study covering the two years to March 2022 found 352 approved hotel construction projects across the United Kingdom.

Sky reports that Epiris, which used to own Parkdean until 2017, is ‘among a handful of remaining bidders for Butlin’s.’ it says ‘Bain Capital is also understood to be among those involved in the process, which could fetch around £600m.’ Butlin’s, which was owned by Rank Group back in the day, is being sold by Bourne Leisure, which also trades under the Haven and Warner Leisure Hotels brands.

Grant Shapps has been sabre rattling. He says P&O Ferries should return £11 million of furlough payments. He has also said that P$O CEO Peter Hebblethwaite ‘has got to go.’

BA is reportedly cutting services in avoid potential cancellations due to staff shortages. Grant Shapps blew the gaff to the transport select committee.

Wyndham Hotels & Resorts has said that 2022 could be the company’s best year since it was founded in 1981. President and CEO Geoff Ballotti says ‘our franchisees are feeling that the summer of ’22 could replace the summer of 2021 as the best ever.’ He has based this comment on the results of his call for a show of hands when talking to franchisees.

Re-booking hotels. A study by BVA BDRC has suggested that booking, cancelling and then rebooking hotel rooms at cheaper rates is a feature of the industry. It says such customers were hard to identify, but were often members of loyalty programmes, who tended to travel frequently and be ‘perhaps a bit more savvy, indeed ahead of the curve, than other groups.’

OTHER LEISURE:

Facebook parent Meta yesterday reported Q1 numbers revealing its weakest revenue growth for a decade. The company reported revenue of $27.9bn, slightly below Wall Street estimates. The shares nonetheless performed strongly on relief that the numbers were not worse and that there was no revenue warning for the rest of the year. The shares were already down 48% in the year to date. Net income was down by 21% at $7.5bn.

Spotify yesterday reported Q1 numbers saying that it added 2m subscribers in the quarter against estimates of 2.57m. It ended the quarter with 182 million paying subscribers worldwide. The company reports earnings of 24 cents a share on sales of $2.99 billion. The company says ‘we delivered another strong quarter in Q1 and when you exclude the impact of our withdrawal from Russia, we came in line or ahead on every metric.’

Tesla had more than $125bn (£99.3bn) wiped off its market value on Tuesday amid concerns that boss Elon Musk may have to sell shares in the electric car maker to help pay for the takeover of Twitter. Moody’s has pointed out that Elon Musk’s bid for Twitter could raise leverage materially. It says this would ‘weaken Twitter’s credit metrics’.

FINANCE & MARKETS:

The SMMT reports that car production in the UK was down by 100,000 units in Q1 this year against the same period in 2021.

Customs duty receipts in the UK rose by 62% in 2021 to £5bn as customs duties were introduced on goods from the EU reports UHY Hacker Young. This is income for the Treasury but represents a material friction on trade. The accountant says the duty is inflationary.

Sterling mixed at $1.2523 and €1.1895. Oil price down at $103.71. UK 10yr gilt yield up 3bps at 1.82%. World markets better yesterday and London set to open up around 19pts as at 6.45am.

RETAIL WITH NICK BUBB:

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