Langton Capital – 2022-09-21 – City Pub Group, Hostmore, Ten, GAW, Tracker, ‘normality’, energy etc.:
City Pub Group, Hostmore, Ten, GAW, Tracker, ‘normality’, energy etc.:A DAY IN THE LIFE: A bit of a struggle at the moment with 50% of Langton’s staff off with Covid. And 40% of Langton Senior’s kids currently have tested positive and about 20% of teenage daughter’s classmates are off with the illness suggesting that just possibly – though small samples are notoriously unreliable – even if it’s not yet showing up in some of the figures, there is something going on out there in terms of numbers. Anyway, a big thank you to those who pinged emails in yesterday with comments on current and funeral-period trading. We’ll summarise asap and get some details out. 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 https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN RETURN TO ‘NORMALITY’ WATCH… Thankfully, the worst of Covid is behind us. With that in mind, things are more normal. This is good for most but bad for some. The Unholy Trinity, to which we have consistently referred, is online, delivery and a recent IPO record. Add in ‘big-ticket’ and things for any share in the crosshairs could be even worse: Kingfisher. • KGF shares weren’t too bad yesterday, just down 2% on H1 numbers. The group reported a 30% drop in profits as more of their customers’ lockdown enthusiasm for DIY continued to wane. Moonpig • Moonpig shares dropped 13% early doors yesterday on an ‘inline’ trading update. The co referred to a return to more normal trends in sales. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. COFFER PEACH AUGUST TRACKER: Summary: • The August Tracker suggests that ‘like-for-like sales at Britain’s managed restaurant, pub and bar groups in August were 2.0% ahead of the pre-COVID-19 levels of August 2019.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. PUBS & RESTAURANTS: Online issues: The Pragmatist comments on online sales saying ‘although the share of e-commerce sales in the UK has dropped to pre-pandemic levels (at 24%), sales are predicted to continue to grow at an annual rate of 12.6% between 2022 and 2025…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Energy costs: An update is expected today on just how the support promised towards covering higher energy costs will be extended to business… Rents and property costs: Downward pressure on rents remains a feature. The Times reports that commercial property values across the UK could fall by as much as 15 per cent by the end of next year… The consumer: Debt. The University of Edinburgh has commented on some workers, particularly public sector workers, turning to Buy Now Pay Later schemes in order to maintain their standards of living. It says one in 10 public sector and NHS staff who were rejected for conventional loans had accessed BNPL finance… Distribution of income. It depends which think tank is commenting but, if windfall taxes are avoided and corporate taxes are cut, the mini-Budget could effectively redistribute income away from lower-income demographics. The reversal of the national insurance rise will help – but only for working people… Footfall: Springboard has reported that footfall in the week to 17 September was up by 12.1% on last year but still 16.7% down on 2019. It says that footfall was up by 6.2% on the prior week… New openings etc: The Local Data Company has released a report suggesting that there are ‘marked signs of recovery [in terms of unit numbers] across Great Britain’s retail and leisure market.’ it says ‘the analysis, which covers the first half of 2022, indicates record performance for businesses, with the lowest level of store closures seen since H1 2018. Findings suggest that market activity has well and truly resumed following the pandemic, and the sector is in a strong position despite looming challenges…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Lumina’s UK Pubs & Bars Market Report 2022 suggests that the UK will lose six pubs or bars a week this year, an outlet decline rate of 0.7%… Commenting along similar lines, CAMRA says that the rate of pub closures has doubled in the first half of 2022 against the second half of last year. It says the rate was running at 9.8 a week in H2 last year but that this has risen to 18.7 in the first half of this year. This rate of decline is higher than that cited by Lumina but it may be reconciled if one number is closures net of new openings and the other is a gross closure number alone. Trading: Insolvency specialist Mazars has reported that insolvencies across pubs, bars and restaurants rose by 59% to 2,156 over the last year. It says there were 216 insolvencies of hospitality outlets in the last month, up 37% on the number seen in July last year… The NTIA reports that a poll it has undertaken suggests that three out of four night time economy businesses in the UK are on a “financial cliff edge…” The latest Lloyds Bank UK Sector Tracker has reported that output growth across most sectors in Britain slowed down in August in the face of slack demand and continued input cost inflation… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Other news: The BII has launched its #notjustapub campaign. It is calling on pubs’ customers to write to their local MPs, asking them to raise the need for more taxpayer support for the country’s pubs… The Drinks Trust has called on the drinks industry to support its Emergency Energy Crisis Initiative and to help provide support for those working in the industry who are applying for hardship grants. COMPANY NEWS: City Pub Group has reported H1 numbers saying that trading is ‘on an upward trajectory’ with revenue of £26.1m versus £8.9m in H1 last year. The group says ‘since the last statement in June, the business has strengthened its financial position and trading has returned to pre-Covid levels albeit with a rising cost burden.’ The adjusted profit before tax is £1.3m against a first half loss of £2.0m last year. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Hostmore has reported H1 numbers saying it has seen a ‘strong improvement in revenues’ which rose by +147% over HY21. It says it has seen ‘both volume and customer spend per head increasing.’ Reve3nues were £98.5m with adjusted EBITDA up from £7.3m to £17.8m. The group reports EPS of 3.5p against a loss of 6.1p in last year’s first half… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Fuller’s comments on energy prices yesterday – it said that ‘prior to realising any financial benefit from this scheme [to be announced today], we expect our total gas and electricity costs in the current year to be c.£18 million against a prior year figure of £8 million.’ Revolution Bar Group brand Revolución de Cuba is giving away 1,800 free tacos ‘as part of an epic treasure hunt to celebrate the launch of its new food menu’. Boparan Restaurant Group’s Slim Chickens has has secured its first franchise partner for the Republic of Ireland. A new food street food hub is to open in Vauxhall, at 7-11 South Lambeth Place, this Friday. SIBA announces that Leigh-on-Sea Brewery has taken its overall Gold at the SIBA East Independent Beer Awards. HOLIDAYS & LEISURE TRAVEL: Butlins. PE house Blackstone has confirmed the sale of Butlins for an undisclosed sum to a newly formed company backed by the former part-owners of Bourne Leisure. TUI CEO Fritz Joussen yesterday said ‘in 2022, we see a strong travel summer almost at the same level as summer 2019. We confirm our guidance and will successfully close the 2022 financial year with a significantly positive underlying EBIT…’ Train strike dates now confirmed. Train drivers representatives have confirmed that strikes will go ahead on 1 and 5 October. OTHER LEISURE: Ten Entertainment has reported H1 numbers saying that total sales came in at £63.2m against £10.6m in H1 last year. It reports PBT of £18.3m (2021¨loss £8.8m) and says that it has net cash of £0.7m against debt of £10.9m last year… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Games Workshop Group updates on H1 trading saying that ‘trading for the three months to 28 August 2022 was in line with the Board’s expectations… Games developer Frontier Development has reported full year numbers to end-May saying that revenue rose 26% to £114.0m but profits slipped on write-offs. EBITDA was £41.1m against £38.1m last year. EPS was 24.6p against 55.4p in the prior year. New culture secretary Michelle Donelan has said she will “re-examine the business case” for privatising Channel 4. Allwyn Entertainment, which will be the new operator of the National Lottery, has said it hopes to more-than-double the amount of money donated to good causes. FINANCE & MARKETS: The Telegraph suggests that traders are now assuming UK interest rates will rise to 3.75% by the end of this year. They are currently 1.75%. The Bank’s MPC will announce its latest move tomorrow (Thursday). The Fed in the US announces today. Fears of a 100bp rise have now receded to around a 20% chance. A 75bp rise is odds-on favourite. The Institute for Public Policy Research has said that the government’s intention to ‘go for growth’ via tax cuts is a rehashing of failed policies and will not work. The Treasury will not publish the OBR’s forecast for the UK’s economic outlook alongside the mini-budget due on Friday… New PM Liz Truss has told the BBC, Sky and others that she is prepared to be unpopular with her tax policy as she believes it will ultimately benefit the British economy. She says she will be radical and different but has reportedly ruled out an election to secure a mandate for change. The PM has said that a new trade deal with the United States, which her predecessor said would be a major benefit of Brexit, is unlikely in the “short to medium term”. Sterling mixed at $1.1372 and €1.1409. Oil price lower at $90.79. UK 10yr gilt yield sharply higher (up 13bps) to 3.29%. Markets lower yesterday. London scheduled, as at 6.30am, to open little changed. FORTHCOMING NEWS: This week saw TUI report H1 numbers and Fullers and Tasty also update on trading. City Pub Group also reports June H1 figures this week. Ten Entertainment, Hostmore and Cineworld also report H1 numbers and Games Workshop hosts its AGM. Carnival updates on Friday. In the world of statistics & economics, the Fed opines on US interest rates on Wednesday (75bp rise baked in) and the Bank of England speaks on Thursday, where a 75bp rise is entirely possible. GfK updates on UK consumer confidence on Friday. RETAIL WITH NICK BUBB: Nick is taking a well-earned break. |
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