Langton Capital – 2022-09-29 – Mitchells & Butlers, Safestay, delivery, Xmas, trading, Big Table & other:
Mitchells & Butlers, Safestay, delivery, Xmas, trading, Big Table & other:A DAY IN THE LIFE: So, which do you reckon are amongst the biggest lockdown regrets, the puppy that’s now a 70kg eating machine, the jacuzzi, that’s now full of leaves and, when it isn’t, costs about twenty quid a day to keep warm, or the Peloton, which is now mouldering away in the shed where the rats occasionally give it a spin? Or maybe you’ve got all three of the above. Or maybe the dog ate the Peloton and then came to grief in the jacuzzi… Anyway, there’s blood on the street as far as the markets are concerned. And, since the markets were kind of level yesterday there must be some things going up to compensate for the losers. Hopefully you’ve got some of them. 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 MITCHELLS & BUTLERS Q3 UPDATE: M&B has this morning updated on Q4 trading and our comments are set out below: Trading: M&B is updating on the period covering the 52 weeks ended 24 September 2022. It adds that sales comps are ‘on a three-year basis, to the same period in FY 2019, the last full financial year before Covid-19.’ Total LfL sales are down 0.9% on the year (vs 2019) ex-VAT benefits. MAB says that total sales (including the impact of new openings and closures) are down 1.3% on the year. Including the impact of inflation, these are clearly bigger declines. MAB reports that ‘like-for-like sales improved in the fourth quarter, despite the ongoing impact of extreme heat as well as further rail strikes, both of which disrupted trade.’ MAB says ‘growth continues to be driven by food sales with the strongest performances in our premium, food-led brands.’ • 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: Delivery: Delivery seeing some rays of light. In support of JET’s comments earlier in the week, CGA’s latest Home Tracker concludes that ‘Britain’s consumers have switched from pick-up food takeaways to third-party deliveries, continuing the habits they picked up during COVID-19 lockdowns…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Credit crunch 2.0. Hopefully, we can swerve it. With some 1,000 mortgage products apparently having been pulled from ‘shelves’ over recent days, the Bank of England has intervened in an attempt to stabilise markets and maintain liquidity… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Pernod Ricard predicts alcohol sales will rocket in the festive period due to the ‘Christmas World Cup’ which will run until 18 December… Zonal and CGA figures show that the likelihood of no-shows has almost halved, from 11% to 6%, saving the industry £5bn a year. The number of consumers making reservations and honouring them has increased by 15 percentage points… Trading: Leaders of a number of hospitality trade bodies have written to the chancellor, Kwasi Kwarteng, saying that ‘hospitality businesses can be at the heart of economic growth, but further support from Government will be critical to their survival…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Peckwater Brands has undertaken a survey of 200 UK pubs, which finds that around six in 10 pub operators believe their units will still be open in a year’s time… The Scottish Licensed Trade Association has reported that nine out of 10 pubs and bars north of the border believe they will not survive the winter without further Government support…. Stock markets: Big moves yesterday with many losses halved as the day progressed. Drops include around 4% at 888 Holdings, between 4% and 5% at AG Barr, Fulham Shore, Gear 4 Music, Jet2, Nightcap & JD Wetherspoon. Restaurant Group down around 6%. Brighton Pier & Comptoir down by between 6% and 7%. DPEU off by 8.8% and Sportech down by 10%. COMPANY NEWS: The Big Table Group, the operator of Las Iguanas, Bella Italia and Café Rouge, has acquired fast-casual Pan-Asian chain, Banana Tree. Fulham shore is set to open a new The Real Greek site at Gloucester Quays, the South West designer outlet and food destination. Shepherd Neame interestingly said yesterday that ‘our best estimate is that we will not see full recovery of profitability in the Company’s business to pre-pandemic levels before 2024/25 as a consequence of the ongoing energy crisis…’ In the US, Cracker Barrel raised prices by 7% in its Q4 ended July 29, leading to same-store sales increasing by 6.1%… Sky has picked up on the disposal of 32 pubs by JD Wetherspoon, saying the sale is ‘due to rising food and energy costs and a lack of staff…’ Hotel Chocolat Group has reported that it is impairing the value of loans made to its JV in Japan to the tune of ‘loans to the Japan JV of £23m and guarantees of £6m in respect of its third-party debt, which is now increasingly certain…’ Bubble Tea operator Gong Cha is to open a unit at the Merrion Centre in Leeds this weekend. HOLIDAYS & LEISURE TRAVEL: InterContinental Hotels Group has updated on its data breach, saying that ‘following a period of disruption, by Wednesday 7 September IHG had re-activated its booking websites and mobile app together with most of its other booking channels and revenue-generating systems. Subsequently, service at our Reservation and Customer Care call centres has been recovered and all our systems restored.’ Safestay has reported H1 numbers to end-June saying that ‘revenues built during the period to £7.3 million (2021: £1.0 million) a good performance moving back toward pre-pandemic levels (2019: £8.1 million).’ The co reports a H1 loss of £338k vs a loss last year of £3.4m. Which? reports that average flight prices for October half-term have risen by 42% compared to pre-pandemic levels, with the basket examined coming in at £212 per flight, compared to £150 three years prior. Rising fuel costs, pent-up demand and airport passenger caps were blamed for the higher fares… C&M Travel Recruitment and C&M Executive Recruitment figures show that last month was the busiest August for travel job placements in more than decade, with new travel jobs up 68% YoY and 17% up on 2019 levels. Heathrow has lost its pre-pandemic position as the world’s top connected airport, falling to 22nd on the list… Eurostar reports that post-Brexit border checks have slowed the speed at which Eurostar passengers pass through London St Pancras on their way to Paris, reducing the terminal’s capacity by one-third… TfL has announced that Bond Street’s Elizabeth line station will open on 24 October following a five-month delay. STR reports that ‘one possible upside to the British pound hitting a record low against the U.S. dollar for the U.K. is its travel implications. It quotes a professor at the University of California as saying ‘there’s statistical evidence and research showing that people book travel based on prices.’ He says ‘Britain is cheaper, so more people would want to go there.’ OTHER LEISURE: The Gym Group has launched its ‘Gym Face’ campaign today, designed to tackle ‘gymtimidation’ which it claims continues to be one of the biggest cultural barriers to fitness. A OnePoll survey found that 1 in 3 Brits (33%) fear feeling out of place in the gym and over half of women (53%) are put off signing up due to the pressure they feel to wear lycra whilst working out. The Lego Group reports revenues up 17% to £6.2bn in the first six months of the year, with net profit of £750m. CEO Niels B. Christiansen said the firm had dodged the worst of rising material and manufacturing costs amid soaring inflation. A YouGov survey for the Betting and Gaming Council has found that fewer than one in five customers would be willing to let betting companies access their bank accounts or wage slips in order to bet. Only 16% would submit themselves to so-called ‘affordability checks’, whereas 58% would refuse the checks… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. FINANCE & MARKETS: Harvard professor Jason Furman spoke to Bloomberg on the UK’s disastrous mini-Budget saying ‘the UK is just the worst of everything…’ Global ratings agency Moody’s has said that unfunded tax cuts could lead to larger budget deficits and higher interest rates. It suggests that such a move is ‘credit negative’. The markets would appear to have come to a similar conclusion. The BBC, Bloomberg & others say that the Bank stepped in because some types of pension funds were at risk of collapse. The CBI says that ‘the Government must respond to financial markets’ concerns after Friday’s mini-Budget in order to allow the pursuit of its welcome economic reforms. Concerns about medium-term debt levels and short-term inflationary risk are shared by many business owners…’ Capital Economics and Credit Suisse estimate that UK house prices could fall by between 10% and 15% if, as is now expected in the markets, UK interest rates rise to 6% by Q2 next year. In real terms, given that inflation could be in or near double figures for a couple of years, that’s a very material fall. Sterling up on the Bank’s intervention at $1.0807 and €1.1156. Oil higher at $88.80. UK 10yr gilt yield sharply lower on Bank buying of gilts at 4.01% (down 43bps). World markets up yesterday and London set to open up 19pts as at 6.30am. YESTERDAY’S TWEETS: • 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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