Langton Capital – 2022-09-26 – Mini-Budget fallout, Sterling & inflation, Covid, PIER, Chapel Down & other:
Mini-Budget fallout, Sterling & inflation, Covid, PIER, Chapel Down & other:A DAY IN THE LIFE: Bit busy this morning, 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 PUBS & RESTAURANTS: The mini-Budget: Chancellor Kwasi Kwarteng’s announcement of a freeze on alcohol duty as part of a raft of tax cuts is a big deal for the drinks industry, with CAMRA chairman Nik Antona calling it ‘fantastic news’… The mini-Budget (see also Finance & Markets). The general response was once again, arguably, ‘thanks, but can we have more?’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The Morning Advertiser reports re the impact of the mini-Budget on pubs, that ‘for a party that’s supposedly pro-business, there’s a lot of businesses out there that have been left feeling they’re out in the cold.’ It suggests that most of the changes will favour big business… Consumer behaviour: KAM research shows that 34% of Brits order take-away or delivery as part of their regular weekday dining and 62% regularly order-in as a ‘weekend treat’. Generation Z and young families are ordering-in most frequently. Some 74% of respondents indicate that they order-in to replace cooking at home, not to replace eating out occasions… Demographics matter: The Progressive Economy Forum (PEF) claims that the poorest tenth of families could face bills amounting to 47% of their disposable income this winter, even after government support is taken into account… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The economy: S&P Markit reported flash PMI’s for the UK economy on Friday showing that the Composite number for the whole economy had fallen to 48.4 in September from 49.6 in August. The Service index had fallen to 49.2 (implying contraction) from 50.9 in August. Manufacturing picked up from 42.7 to 44.4 but still implies contraction. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Covid – down but not out. Covid cases are rising in England and Wales for the first time in two months. The ONS says it is “too early” to call a trend. CGA reports that on-trade drink sales are now down (in the week to 17 September which was, admittedly, dominated by the events following the death of the Queen) year on year by 1%. It says sales were ‘1% behind the same week last year—though they were 6% off the levels of September 2019, and even further behind after adjustments for inflation…’ Wage costs: Attracting and retaining labour is as important and as difficult as ever. The government is reported to be considering cutting taxes and relaxing immigration. In the meantime, Lidl is increasing entry-level hourly pay rates from £10.10 to £10.90 outside London and from £11.30 to £11.95 within the M25 that circles the capital… Other news: In line with the market, there were some big negative moves across hospitality industry share prices on Friday. Consumer squeeze. The RAC reports that the cost of charging an electric car has risen sharply due to the rise in electricity prices. It says this may put off drivers from buying them and will take money out of the pockets of existing owners. A smattering of discounts are appearing out there… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. COMPANY NEWS: Chapel Down has reported H1 numbers to end-June saying that net sales rose 4% to £6.9m with sparkling wine sales up 35%. The company says PBT is up 6.4% at £489k and that ‘average selling prices increased 21% due to a combination of the increased share of traditional method sparkling wines in our sales mix and price increases on both sparkling and still wines in April 2022.’ The co says ‘price increases had no negative impact on volume, demonstrating the strength of the Chapel Down brand…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Joe & The Juice is partnering with The Independent Food Company for its first stores in Saudi Arabia. The Danish coffee and juice chain has previously outlined plans to operate 200-300 outlets across the Middle East within ten years. BrewDog is to open its first franchised site in the US, in Denver, Colorado. French coffee chain Columbus Café & Co targets 500 stores globally by 2027, opening 40 new stores annually over the next 5 years. The Paris-based company achieved 28% outlet growth across France in the last 12 months to reach 230 stores. Belgian coffee roaster Miko reports half year sales up 169% YoY to €130m and net profit of €44.7m, saying the impact of Covid-19 in Europe has largely abated. The company said rising raw materials and operational costs were the key challenges for the year ahead. HOLIDAYS & LEISURE TRAVEL: Brighton Pier Group. FY numbers, caution in parts. Lightwater Valley sees ‘significantly lower admissions’ and co sees ‘LfL sales for the 9wks to the 28 Aug 2022 have seen softer trading across some divisions with cost pressures building across the group’. Turning to the now-historic last year figures, the co has reported full year numbers for the 52wks to 26 June saying that ‘the Group demonstrated the continuing strength of the business model, with record revenues at £40.1 million (2021: £13.5 million), up 25% on the same pre-COVID period in 2019.’ PIER. Group revenue is up to £40.1m from £13.5m and Brighton Pier says this represents a 25% increase on pre-Covid levels. Gross margin was held at 87% and PBT was £7.3m against £4.1m in the prior year. EPS is 15.4p (2021: 11.3p). There is no dividend and no mention of one in the statement…. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Current trading & outlook comments from PIER. The co says ‘like for like sale sales for the 9-week period to the 28 August 2022 have seen softer trading across some divisions with cost pressures building across the Group.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Travel industry experts claim that flight cancellation rates at UK airports are now down to about 1%, from a high in the peak of this summer’s disruption of 5% or 6%. This is reported to be a shade below ‘normal’ levels. Tim Alderslade, CEO of Airlines UK, said ‘The media stuff was unhelpful…it has not been as bad as it was portrayed’. Sky reports that PE house Platinum Equity has undertaken a strategic review of holiday company Awaze, which operates Hoseasons, James Villas and Cottages.com. Goldman Sachs and Morgan Stanley are reported to have been appointed… Staycations. GoDaddy figures show that small and micro hospitality and leisure firms in the UK will have made over £2bn this summer from holidaymakers avoiding international travel. Mini-Budget. Advantage Travel Partnership CEO Julia Lo Bue-Said said that Chancellor Kwasi Kwarteng’s mini-budget showed ‘positive news for our industry as it will give consumers more disposable income’ but that ‘We are therefore hoping this new cabinet will be more supportive of our sector moving forward and the see the value of SMEs as a key part of a global Britain for the future.’ No mention of Sterling, then? Secret Escapes Group reported EBITDA of £5.4m in the 12 months to December 31, 2021, with trading reaching almost 80% of 2019 levels between June and October 2021. The company suffered losses of £31.2 million in 2020 as the pandemic shut down all international travel. Travel Weekly reports that Leger Shearings Group has acquired the brand and assets of Arena Travel after the escorted touring company was placed into administration on Friday. French air traffic controllers have called off a three-day strike scheduled for September 28, 29 and 30, after a dispute over wages and staff numbers was resolved with France’s civil aviation authority. OTHER LEISURE: National Lottery group Allwyn Entertainment is reported to have called off plans to list its shares in New York. FINANCE & MARKETS: It almost feels like old news but just to recap, chancellor Kwasi Kwarteng on Friday announced the biggest package of tax cuts in 50 years. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The British Chambers of Commerce says ‘businesses will welcome many of the measures announced today that should boost economic growth, relieve cost pressures and encourage investment.’ It says ‘all eyes will also now turn to the forecasts by the Office of Budget Responsibility in the autumn for reassurance on public finances.’ Sterling has fallen to new recent record lows against the US$ on the back of Friday’s unfunded min-Budget tax cuts. The chancellor told the BBC over the weekend that he intended to continue cutting taxes. The Euro has also been weak against that dollar, but by a lesser amount. Sterling down over the weekend at $1.0549 and €1.0944. Oil lower at $85.60. UK 10yr gilt yield up 30bps since Friday at 3.81%. World markets lower on Friday but London set to open some 22 pts higher as at 6.30am. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. |
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