Deliveroo, TUI, Hostelworld, trading conditions, energy, Jet2 & more:

A DAY IN THE LIFE:

Putting to one side a few of her less pleasant habits, it’s not all bad being a puppy.

I mean yesterday, for example, she ate three full meals back-to-back in twenty minutes, ran around like a mad thing for a little while, chewed through the hosepipe, did several unmentionables in the open air and then slept for seven hours through the middle of the day while the stupid humans around her tried to get some work done.

She then awoke early evening with a kind of, ‘yeah, what?’ arrogance about her and did the same thing all over again.

Re the football, it may be fair to say that we only sing when we’re winning. On to the news:

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DELIVEROO H1 NUMBERS:

Deliveroo says it has turned in ‘continued growth in challenging market conditions with H1 2022 revenue up 12%, orders up 10% and gross transaction value up 7% year-on-year (7% in constant currency).’

The company says that ‘growth slowed sequentially in Q2 compared to Q1; GTV growth in constant currency was 12% in Q1 and 2% in Q2, reflecting the impact of increased consumer headwinds.’

Deliveroo adds that it has made ‘good progress on key levers of path to profitability and cash generation, driving reduction in adjusted EBITDA loss to £(68) million in H1 2022 from £(106) million in H2 2021.’ The detail, however, shows that, whilst the loss is lower than H2 last year, it is bigger than it was in H1 a year ago…

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PUBS & RESTAURANTS:

Business distress:

Sacha Lord, the Night Time Economy Adviser for Greater Manchester, claims  pubs, bars and restaurants are seeing outgoings triple and are in deeper trouble now than during the pandemic. Lord called on the government to return to parliament to intervene in the economic issues.

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Research from eEnergy and Censuswide has revealed that three quarters of hospitality and leisure businesses are considering reducing their hours in response to rising energy bills. A quarter of them are considering closing down altogether…

Cost of living crisis:

Cornwall Insight reports that energy bills will hit £4,266 for a typical household by January next year, up £650 compared to its previous estimate just last week. This means that the average household would see bills jump to £355 a month at the beginning of next year….

Consumers already turning to debt. Data shared by digital lender marketplace Freedom Finance shows that average credit card rates jumped 0.23 percentage points from June to hit 21.66 per cent in July – the highest average monthly rate since December 1998. Rates for £10k personal loans also rose in July to 4.18 per cent – a six-year high. ONS data last week found that 6m people are using more credit than usual due to the cost-of-living crisis…

Demographics: The CEBR points out that the median wage in the UK is rising by around 6% whilst prices are currently up 9.4% and could be up 13% on the prior year in Q4. It says that the bottom 10% of earners have had raises of only 1%. The richest 1% of wage earners, it reports, have seen their incomes rise by 11%.

WFH:

August is a slack month but the Evening Standard has quoted data from BNP Paribas suggesting that competition for West End offices is rising rapidly, despite the growth of remote working…

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Glenigan’s construction market research shows that the underlying value of detailed planning approvals in the capital rose in six of the 11 sectors in Q2 compared to the same period a year earlier…

Supply issues (and real wage concerns). Workers at Felixstowe are to go ahead with an eight-day strike after pay talks broke down. The workers rejected a 7% rise linked to a £500 lump sum.

Labour shortages:

Research from CACI ranks London’s West End first among the UK’s 25 highest revenue leisure regions – but it is absolutely the lowest when it comes to the availability of staff to service the resultant demand.

Other news:

The French Agriculture Ministry says ongoing issues with drought could yet affect wine volumes, despite 2022 production being predicted to rebound from the low harvest in 2021, impacted by spring frosts. Production is forecast to increase by between 42.6 million and 45.6 million hectolitres YoY.

Signs of labour unrest and a push to maintain the real purchasing power of wages. Around 115,000 Royal Mail workers are to strike on four days in August and September in a dispute over pay.

Discounting. Early days but Toby and Harvester, both M&B brands, are offering children’s meals for £1.

COMPANY NEWS:

Deliveroo. H1 numbers see above. In addition, Lord Simon Wolfson ‘has decided to step down from the Board.’ Lord Wolfson said ‘after much consideration, and with regret,  I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments. I have enjoyed my time working with Will, the executive team and my Board colleagues over the past 18 months and wish the Company all the best for the future.’ This is effective from today.

Boparan Restaurant Group is set to open its first Slim Chickens restaurant under a new partnership with Tesco Extra this month, located in Redditch.

The MA reports that Australian-based drinks heavyweight Lion has sold its UK craft beer brands Magic Rock and Fourpure to Odyssey Inns.

Fuller’s has announced a new partnership with Made in Hackney – a local community cookery school and food kitchen. It reports ‘the partnership is kicking off with Made in Hackney’s plant-based burger becoming available across the Fuller’s estate from the beginning of August.’ The plant-based burger ‘comprises a jerk patty, tahini-dressed kale, balsamic beef tomato and a secret sauce.’

Domino’s Pizza is to pull out of Italy as the locals have not taken to its American pizzas. The company launched in the country in 2015.

Asian food brand Chopstix is to expand in Greater London with three new sites set to open in the next month.

HOLIDAYS & LEISURE TRAVEL:

TUI has reported Q3 numbers saying that, in Q3 itself, the co broadly broke even. It says ‘Q3 2022 with underlying EBIT of €-27m first broadly break-even quarter post pandemic.’ It adds that ‘excluding flight disruption costs, underlying EBIT clearly profitable at €48m. Q3 delivering further operational and financial progress.’

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Hostelworld has reported H1 numbers to end-June saying that revenue was €28.0m against only €2.9m in H1 last year. The co says that Net Bookings are now 59% of H1 2019 levels ‘with an increasing percentage achieved as we moved through the period. January bookings were at 33% of January 2019 while June bookings were at 80% of June 2019. Net revenue reached 104% of 2019 levels up from 34% in January, driven by higher average booking values…’ The co made an EBITDA loss in the period of €5.2m vs a loss of €9.7m in H1 last year.

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Jet2 chairman Philip Meeson has commented on trading in his company’s annual report & accounts, saying that results for the current financial year depends on how quickly the aviation sector can achieve “some level of stability.” He adds ‘despite the looming economic difficulties, for the long term we continue to believe that opportunities for us to grow share as a financially strong and trusted package holiday provider will only increase.’

Barclaycard data shows a 7.7% rise in overall spending in July compared to a year earlier, with overall spending month-on-month up 1.6% compared to June. However, consumers cut their spending on holidays, falling 3.8% in travel agents and 3% at airlines as rising inflation took its toll on family budgets.

Research conducted by Wakefield for SAP Concur has found that 98% of business travellers from SMEs are “willing” to travel in the next 12 months, and 54% are “very willing”. The research points out, however, that  external threats could have a ‘profound’ impact on SMEs that are more likely to feel the pinch of rising prices than larger companies.

Business Travel News reports that Sabre acquired payments company Conferma Pay on 3 August. 

Reuters reports that Heathrow’s largest investor, Spanish company Ferrovial, is considering options for its 25% stake. The company is said to have held preliminary talks with external advisers. The discussions are said to be at an early stage. Madrid-based Ferrovial has stakes in Spanish infrastructure companies as well as motorways in the United States and Canada. It has been invested in Heathrow airport for 16 years.

OTHER LEISURE:

Warner Music Group has reported fiscal Q3 numbers that have beaten market expectations. The company says that revenue in Q3 rose by 7% or 12% in constant currency with digital revenue up slightly by 2%…

Tesla boss Elon Musk is reported to have sold another 7.92 million shares in the company, worth around $6.88bn.

FINANCE & MARKETS:

Sterling mixed at $1.2079 and €1.1826. Oil price down slightly at $96.12. UK 10yr gilt yield up 4bps at 1.99%. World markets mixed to lower yesterday with London set to open down around 18pts as at 6.30am.

FORTHCOMING NEWS:

The week we still have numbers from Deliveroo (today), with TUI updating on Q3 on Tuesday and Hostelworld also reporting H1 numbers. Disney’s Q2 is the same day. Coca Cola HBC H1 numbers are Thursday and Flutter and 888 both report on Friday.

RETAIL WITH NICK BUBB:

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