Langton Capital – 2022-07-18 – Deliveroo (caution), Tortilla (update), insolvencies, tips, DGE, SBUX etc.:
Deliveroo (caution), Tortilla (update), insolvencies, tips, DGE, SBUX etc.:A DAY IN THE LIFE: It’s already a bit hot and, with 39 degrees forecast for the North of England tomorrow, it’s set to get hotter. That is, before the temperature collapses to a more normal 23 on Wednesday and 18 by Friday but, while it lasts, the heat will play havoc with trading and, whilst it could deliver a windfall for some, it will be less good for others. We’d be very interested to hear feedback. Such weather would ‘normally’ mean maybe wet sales up, roast dinners down, beer gardens up and indoor entertainment down etc but, as these temperatures really are somewhat exceptional, maybe everyone will stay indoors, hoard their cash, work from home and surreptitiously re-watch The Tiger King. 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 PUBS & RESTAURANTS: Trading: The British Institute of Innkeeping has polled members on the major issues facing the on-trade and says its results have ‘highlighted the fragility of pubs in every community across the UK, as they face huge inflationary headwinds, disproportionate costs for their businesses, severe staff shortages and the impact of the cost-of-living crisis on consumers…’ The BII looks at sales numbers, inflation, margins, consumer confidence & staffing issues. It then comments on the outlook and on the fragility of many hospitality balance sheets… • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. Other news: The government has released insolvency stats for June. These have been running low, largely due to the support provided over the Covid period. Most support measures have now been withdrawn – although some only recently – meaning that observers believe the numbers could be set to rise. CGA has reported that ‘gin is one of the most popular spirits categories in On Premise venues across markets, with plenty of potential to grow further over the coming months…’ The Guardian reports that a bill that would oblige restaurants to hand over all tips to their staff will likely be passed after winning backing from MPs… • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. Larry Fink, CEO of BlackRock, says that the rising price (and restricted supply) of food is more worrying than developments in the oil market. The Times reports that younger people are abandoning streaming in order to save money. It says that some 1.66m subscriptions were dropped from media streaming services in the UK in Q2 this year. Accenture and S&P Global report that confidence across British business leaders has dropped to its lowest since at least 2009. It says that, nonetheless, UK business people are less gloomy than those on the continent. Marks & Spencer is to remove “best before” dates from over 300 fruit and vegetable items to reduce food waste. COMPANY NEWS: Deliveroo trading update and revenue warning. Deliveroo has updated on H1 trading, saying that Gross Transaction Value was £3.56bn, up 7% on the same period last year. GTV rose by 12% in the UK & Ireland in Q1 and by 4% in Q2. The company says that Q2 GTV revenue rise was 4% or 2% in constant currency terms. The group says ‘this is a slowdown in GTV growth compared to Q1 2022, which management believes reflects the impact of increased consumer headwinds during Q2. In Q2 2022, growth in orders was 3% year-on-year, while GTV per order reduced slightly year-on-year, as basket sizes were elevated during lockdowns for part of Q2 2021.’ The company goes on to warn on revenue growth ‘and a more cautious economic outlook…’ • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. Tortilla has updated on H1 trading, saying it is seeing ‘further strong sales growth and continued strategic progress…’ • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. Diageo is reported set to sell its Guinness Cameroon business to Castel Group for £389 million. The Sunday Times reports that Starbucks is considering selling its UK operations. Houlihan Lokey is said to be assessing interest. Meanwhile, the company’s interim CEO, Howard Schultz, has said that it will be closing ‘many more’ stores. The information came out in video footage. D&D London is to close its Aster restaurant in Nova in Victoria. HOLIDAYS & LEISURE TRAVEL: Emirates Airlines changed its stance and will cap flight sales from Heathrow. STR reports that hotel occupancy across the US was at 63.3% in the week to 9 July. Norwegian Cruise Line is cutting 40% off all cruises and fly-cruises booked between July 19 and 29 in a flash sale. OTHER LEISURE: The Guardian reports that ‘loot boxes in video games will not be banned in the UK, despite a government consultation finding evidence of a “consistent” association between the features and problem gambling’. FINANCE & MARKETS: Several of the contenders for the Tory leadership have been calling for tax cuts. At a time of spiralling debt, the IMF has said that would be a bad idea. Mark Flanigan, head of the IMF’s UK team said to the BBC ‘I think debt-financed tax cuts at this point would be a mistake.’ Sterling mixed at $1.188 and €1.1772. Oil higher at $102.37. UK 10yr gilt yield unchanged at 2.09%. Lots of UK economic stats this week (see forthcoming events) and the ECB looks set to raise Eurozone interest rates for the first time in 11yrs on Thursday. FORTHCOMING NEWS: Next week, Deliveroo and Tortilla update on trading on Monday and Loungers hosts investor presentations on Tuesday. Fuller’s hosts its AGM (and will update on trading) on Wednesday and Premier Foods also updates on Q1 on Wednesday and Fulham Shore reports full year numbers on Thursday. DPEU will update on H1 trading, also on Thursday. Big week next week for economic releases. We have Unemployment and Average Earnings numbers on Tuesday then Inflation numbers on Wednesday. Thursday sees the ONS admit to how much the government is Borrowing on behalf of taxpayers and on Friday we have a triple whammy of Retail Sales numbers, the GfK Consumer Confidence Index and Flash PMIs for July. RETAIL WITH NICK BUBB: • See premium. Reply to this e/m to see a sample of the full email and / or to upgrade. |
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