Langton Capital – 2022-07-14 – SSP, JDW, LGRS, labour issues, margins, Playtech, holidays & other:
SSP, JDW, LGRS, labour issues, margins, Playtech, holidays & other:A DAY IN THE LIFE: Popping to the shops yesterday lunch, up in the wilds north of The Barbican, I saw what looked like – and which was proved by subsequent evidence to be – a very aggressive speedbump. It looked to be about two feet tall but, on reflection, it was probably no more than four or five inches but, if the layers of rust, paint and scraps of steel that adorned it were anything to go by, it was tall enough to do the job and then some. As I haven’t driven in London for years and therefore didn’t have to wonder if any of the debris was from my motor, my first thought was one of sympathy because who on earth gets out of bed thinking ‘you know what, I’ll rip my exhaust pipe off this morning, that’ll be a laugh’? Fair enough, the bump wasn’t on the public road, it was on the approach to a carpark but surely some clever paint job, the skilful use of light and shade, could make the thing look more ferocious than it was in reality and achieve the intended purpose without tearing the underneath off virtually every passing motor. Just saying. 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. Prices for the Premium at time of writing are £345 for one subscription, £595 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option HERE JD WETHERSPOON – FY TRADING UPDATE: Following the release of its Q4 update, JD Wetherspoon hosted a conference call for analysts and our comments thereon are set out below: Current & recent trading: • Has there been a major negative swing in drinks? The ‘recovery in sales has been slower than thought’. Says ‘younger people are going out more.’ Adds the ‘return to pubs for older customers has been muted.’ • What is happening in volume terms? Given price increases, volume clearly lags the overall sales number. Volumes are not back up to 2019 levels. • Full year to date like for likes. These are around minus 5%. Total sales are down around 6.8%. • Further questions on pricing, discounts, costs, energy mark to market, debt, covenants, site opening profile, disposals and more. • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. LOUNGERS – FULL YEAR RESULTS: Following the release of its full year figures, Loungers hosted a meeting for analysts and our comments thereon are set out below: Trading: • The company is pleased with its performance. VAT boosted sales (and profits) by £15m in the year under review. The company adjusts this in order to aid comparisons. • LfL sales over 3yrs ago are +22.1% or +14.2% if the VAT benefit is removed. • Further comments and question over run rate sales, growth, food split, no signs of downturn, discounting, new openings and other. • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. PUBS & RESTAURANTS: Labour market: Both JDW and LGRS yesterday mentioned sourcing & retaining labour as amongst the most important issues facing hospitality. in addition, ‘the latest and 11th Future Shock report, compiled in partnership between leading industry body UK Hospitality and sector data and insight specialists CGA, demonstrates how expectations of a swift sector recovery have been dashed’. It points in no uncertain terms post Brexit, Covid and the Great Retirement, to gaps in the labour market… • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. Sales up, costs up, profits down? UKH and CGA says the hospitality ‘sector has proved its value to consumers post-pandemic, with sales back to 2019 levels but the labour shortage, inflationary cost pressures and dropping consumer confidence make it extremely difficult for any business to achieve real-terms year-on-year growth at the moment and there is little prospect of a respite on the horizon…’ • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. WFH: JDW also referred to WFH and the fact that office-attendance numbers have not returned to pre-pandemic. We believe that numbers are still materially below but, interestingly, Glenigan amongst others has suggested that contracting activity in the office construction industry has begun to pick up. Other news: The Morning Advertiser reports that the Discovery Forum 2022 has been told that the market for corporate meetings could be a ‘big opportunity’ for pubs. Hailstorms have reportedly destroyed part of the wine harvest in some regions of France. Rail workers are to strike on 27 July in a dispute over pay and conditions. Network Rail says it has offered 5%. The RMT describes the offer as ‘paltry’. COMPANY NEWS: SSP Group has updated on Q3 trading. The co points to a continuation of its steady recovery, saying that ‘revenue has continued to strengthen, running at 89% of 2019 levels in the following seven weeks, leaving revenues at 87% of 2019 levels for the third quarter as a whole. This includes a benefit from net gains and pricing compared to the same period in 2019…’ • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. See also comments above on JDW & LGRS. JDW shares fell by 8.3% yesterday to threaten 10yr lows… • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. The CMA is to launch a ‘phase one’ investigation into Morrisons’ takeover of McColl’s. The MCA reports Oakman Inns executive chairman Peter Borg-Neal as saying that his company may sell a stake to private equity. HOLIDAYS & LEISURE TRAVEL: The ONS (see Finance & Markets below) has said that the economy grew by 0.5% in May… Whitbread is to open its first ‘all-electric’ Premier Inn hotel in Swindon Town Centre. Doncaster Sheffield airport “may no longer be commercially viable” reports its owner. OTHER LEISURE: Sky reports that Vue International, Britain’s third-biggest cinema chain, is close to bringing the curtain up on a £1bn recapitalisation that will see its lenders take ownership of the business and put it back on a sustainable financial footing. Netflix is reported to have teamed up with Microsoft to offer a cheaper subscription plan to customers that will show adverts. TTB Partners Limited has announced that ‘due to challenging underlying market conditions it is not intending to make an offer for Playtech plc.’ FINANCE & MARKETS: The ONS reports that the UK economy grew by 0.5% in May after shrinking in April and March… US CPI rose to a 40-year high of 9.1% in June. The number, which was higher than expectations, was driven by rises in the prices of food & fuel. The euro has fallen below parity against the dollar for the first time in around 20 years as the rate at which the different blocks move to raise interest rates continues to widen. Head of the International Monetary Fund Kristalina Georgieva has said the organisation is to downgrade its expectations for global GDP growth this month. The RICS has said that it is seeing evidence of a cooling in the housing market. Sterling weaker at $1.186 and €1.183. Oil up a little at $99.99. UK 10yr gilt yield unchanged at 2.07%. World markets lower yesterday. London set to open up around 4pts as at 6.30am. FORTHCOMING NEWS: A bit of life this week before the pace of announcements busies up later this month. Hostmore updated on H1 trading on Monday, Pepsi on Tuesday. Loungers reports full year numbers on Wednesday and JD Wetherspoon comments on full year trading also on Wednesday. Vianet’s AGM is Wednesday and SSP updates on Q3 trading Thursday. DP Poland hosts its AGM on Friday. RETAIL WITH NICK BUBB: • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. |
|