Langton Capital – 2022-05-20 – Consumer confidence, Young & Co, delivery, inflation & more:
Consumer confidence, Young & Co, delivery, inflation & more:A DAY IN THE LIFE: Thinking ahead and with the World Cup running… • See premium. Reply to this email to upgrade. Anyway, more on that next week. 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 are £345 for one subscription, £595 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE CONSUMER CONFIDENCE: GfK reports this morning that consumer confidence in the UK has fallen to its lowest ever reading of minus 40. • See premium. Reply to this email to upgrade. Some hopes that the brunt will be borne by big ticket? • See premium. Reply to this email to upgrade. The government has resisted calls for an emergency budget as well as calls to tax the energy companies on their windfalls. The treasury says ‘we’re taking decisive action to tackle the NHS backlog and fix the social care crisis – something governments have ducked for decades.’ • See premium. Reply to this email to upgrade. YOUNG & CO – FULL YEAR RESULTS: Following the release of its FY numbers yesterday, Young & Co hosted a presentation for analysts and our comments thereon are set out below: Trading • See also yesterday’s Flash Note covering the full year announcement itself. • Overall, the company believes that this was a very acceptable year. The group suffered through Omicron over Christmas, but sales and profits were robust both before and after the interruption. There were only 36wks of uninterrupted trading • Current trading – sales are up 17.0% in total for the last 13wks. The are up by 7.7% on a like-for-like basis. • Customers are trading up. The company says there is limited price sensitivity – at least at present. It says that cask ales (often the cheapest pint at the bar) are still in decline & premium drinks are in growth • There is ‘no sign of trading down’. Young’s is not on the whole discounting. It has middle to higher end pubs in the context of the industry as a whole • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: Delivery: CGA and Slerp has updated on delivery sales saying that they are ‘more than four times higher than pre-COVID’. However, they go on to say that growth this year has ‘eased’. Indeed, sales have actually fallen, year on year. CGA & Slerp says ‘delivery sales at Britain’s leading managed restaurant and pub groups in April were 357% higher than the pre-COVID levels of April 2019.’ • See premium. Reply to this email to upgrade. Inflation: The IFS has concluded that rates of inflation faced by different income demographics are not the same. Less affluent consumers spend a greater proportion of their money on food and heating. It says the lowest income decile is facing an inflation rate of 10.9% whilst the most affluent faces only 7.9%. The average is 9.0%. This has implications for demand. • See premium. Reply to this email to upgrade. UKHospitality calls for a potential online sales tax to be ear-marked to provide a targeted reduction to business rates for high street businesses. UKHospitality CEO Kate Nicholls said ‘Government must ensure that an online sales tax avoids double taxation for businesses that deliver product on-premise, such as pubs, restaurants and hotels.’ • See premium. Reply to this email to upgrade. The BBPA reports that the Platinum Jubilee bank holiday weekend could result in an estimated 90m pints sold, providing a £105m boost for hospitality businesses. The record bank holiday sales hoped for could see £29m paid into the economy in duty and VAT. A study by the Federation of Small Businesses shows that lending to smaller firms has hit an all-time low, blaming banks for ‘pulling up the drawbridge’ to smaller companies. Successful finance applications reached a record low for Q1 2022 with just two fifths of the 9% of small firms who applied, getting approval. • See premium. Reply to this email to upgrade. COMPANY NEWS: The MCA reports that Vagabond Wines’ Heathrow site will prepare the brand for citywide, nationwide, and eventually global expansion, according to founder Stephen Finch. Finch said ‘Terminal 5 is at about 90% of the 2019 numbers. That’s a lot of people going through. It’s a very prominent site, great for exposure.’ German Doner Kebab has appointed Nick Scovell as Director of Operations, taking over from Michael Biggins who begins his new role as Director of Strategic Initiatives. McDonald’s has announced that it has sold its Russian restaurant portfolio to existing licensee Alexander Govor for an undisclosed sum. HOLIDAYS & LEISURE TRAVEL: The Mastercard Economics Institute reports that flight bookings in the UK increased to 40% above 2019 levels in the space of just six weeks, after travel restrictions were eased earlier this year. By the end of April, leisure flight bookings globally surpassed 2019 levels by 25%. Sky News reports that PAI Partners and real estate funds managed by TPG are working on a joint offer for Parkdean Resorts, thought to be valued at around £1.6bn. Parkdean is currently owned by Canada’s Onex Corporation. EasyJet reports load factors of 90% during the Easter holidays, as half year losses eased to £545m compared to £701m a year ago. In the last 10 weeks, bookings have been 6% above the same period in 2019, with CEO John Lundgren saying ‘pent-up demand and removal of travel restrictions provided for a strong and sustained recovery in trading’. GMB and Unite unions say British Airways’ passengers could face ‘travel chaos’ as workers vote on strike action. The GMB said Heathrow workers are ‘furious’ because a 10% pay cut imposed on them during the pandemic has not been reinstated despite bosses having their pre-Covid pay rates restored. Travel Weekly’s Future of Travel Spring Travel Forum has heard that historic sales volumes of long-haul holidays are unlikely to return to the market until 2023. Carnival Cruise Line reports that it has carried two million passengers since the industry’s restart last summer. OTHER LEISURE: Playtech has updated on its bid approach saying that TTB now has until 17 June to put up or shut up. Playtech says ‘discussions between the Company and TTB are ongoing and progress continues to be made. There continues to be no certainty that an offer will be made, or the terms on which any offer may be made.’ FINANCE & MARKETS: Chancellor Rishi Sunak has called on businesses to increase investment in order to help alleviate the deepening cost of living crisis. This may run counter to the instincts of most businesses to conserve cash when times (or preferably ahead of when times) get tough. The BCC says 81% of employers ‘say they have been impacted by the increase in national insurance contributions.’ It says that ‘higher prices, reduced investment and increased staff costs were among the main effects cited.’ The BCC, along with the Labour Party, is calling for an Emergency Budget. With Brexit still causing trade and political problems, City AM reports that the PM’s father, Stanley Johnson, has become a French citizen. The Telegraph reports property experts as saying that now is not the time to take out a large mortgage. Chancellor Rishi Sunak has told backbench Conservatives that there is nothing the government can do to stop inflation rising and hitting Britain’s consumers. Sterling mixed at $1.2454 and €1.1776. Oil higher at $111.59. UK 10yr gilt yield up 1bp at 1.86%. World markets down yesterday but Far East up in Friday trade & London set to open around 89pts higher as at 6.30am. FORTHCOMING NEWS: The weekend is nearly upon us. Just GfK updating on consumer confidence today and then a quieter week next week. Cranswick (pigs) and Shaftesbury (Covent Garden property), On the Beach (hols) on Tuesday and then Hollywood Bowl on Weds. Maybe just in order to cram virtually everything in the week into one day, Whitbread also hosts a teach in on Tuesday. See also Trading Statements. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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