Langton Capital – 2022-10-12 – Hostelworld, Playtech, GDP & recession signals, LDIs, pensions etc.:
Hostelworld, Playtech, GDP & recession signals, LDIs, pensions etc.:A DAY IN THE LIFE: As is often the case in finance, Langton knows enough to know that it doesn’t know enough. So, we’re not blighted by the ‘certainty of fools’, which seems to afflict a certain type of politician these days, but we have to spend many an hour head scratching and playing catchup with the pointy heads who seem to have absorbed all the facts that we’re now having to research with their mother’s milk. And so on to LDI, or Liability Driven Investments. Which we might be hearing about a lot more before the end of the week when the Bank of England has said on a couple of occasions that it will stop supporting the market and will leave the various players to sort themselves out. We cover this a bit more below but, in short, it seems like the sort of alchemy that was meant to prove that, over time, there was never going to be such a thing as a free lunch and that an idiot who runs through an explosives factory with a lit candle and a silly grin on his face – but who doesn’t get blown up – is still an idiot. 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 BARCLAYCARD CONSUMER SPENDING REPORT: Barclaycard, which ‘sees nearly half of the nation’s credit and debit card transactions’, has commented on consumer spending for September (period 20 August 2022 to 23 September 2022) and has compared it to the same period last year. Headlines: With petrol and diesel prices down, it was perhaps unsurprising that ‘spending on essential items saw its smallest rise this year’ at up 3.3%. Whilst the lowest for some time, the spend on essentials was markedly greater than that on discretionary items (up 1.0% – but down from the +3.6% growth seen last month) and on all items combined (+1.8%). • 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: Costs & inflation: Kantar figures show UK Grocery price inflation hit a new record of 13.9% in September… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Pret A Manger has said that it is to raise wages for the second time this year in a move aimed at sourcing and retaining staff. With Britain’s unemployment rate down to its lowest since 1974 at 3.5%, retailers are having to repeatedly hike wages to attract and retain staff. Discounting. Restaurant Group’s Frankie & Benny’s is offering an ‘adults eat free’ deal during half term. The company says ‘get your meal for free when little diners eat with us during the half-term holidays.’ Whitbread’s Beefeater brand is offering two mains for £12 on Saturdays and M&B continues to offer deals across a number of its brands… Moves in the US labour market that make it more likely that gig workers will be reclassified as employees led to shares in firms such as Uber and Lyft falling by more than 10% on the news yesterday… Employment data: Re ONS employment figures, UKHospitality CEO Kate Nicholls said ‘Despite this decrease, there are still significant vacancies, stifling our ability to drive growth. There is still work to do and we continue to hear from businesses about how recruitment challenges are putting the brakes on recovery.’ The BCC comments on yesterday’s UK labour market stats saying that the data ‘confirms that the UK is facing the tightest labour market in years.’ It adds ‘our own research shows that labour shortages are holding back the ability of many businesses to service existing customers and grow…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The consumer: See also Barclaycard comments. Santander has said it is seeing a rise in customers falling behind on mortgage loan payments. It says that, at the moment, this is ‘slight’. Nonetheless, it says that customers are under ‘strain and pressure’… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Recession territory: The ONS has released GDP estimates for August saying that GDP is ‘estimated to have fallen by 0.3% in August 2022, after growth of 0.1% in July 2022 (revised down from a growth of 0.2% in our previous publication).’ The ONS says ‘there has been a continued slowing in the underlying three-month on three-month growth, where GDP also fell by 0.3% in the three months to August compared with the three months to May 2022…’ • 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: Marston’s shares rose by 6% yesterday after the group reported on Q4 sales and confirmed that positive trends established during the summer had continued. The group maintains that its strategy is paying off and it says that consumers continue to trade up when offered with the right product in the right units. Puttshack is reported to have raised $150 million in growth capital from funds managed by BlackRock alongside ongoing support from Promethean Investments. The company says it will use the funding to rapidly expand in the U.S… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. PizzaExpress has ended its exclusive delivery agreement with Deliveroo and will now also be available on rival platforms Just Eat and Uber Eats. MCA reports that Greene King has acquired Hickory’s, the BBQ smokehouse restaurant group, for an undisclosed sum. Greene King plans to leverage its scale and accelerate the national roll out of the Hickory’s brand beyond its North West heartland. Scoffs Group, a Costa Coffee franchise business, reports turnover up 50% in 2021 to £35.8m. The business finished the year with 104 stores, up from 90 the year prior. In August 2022, Scoffs acquired 10 additional Costa stores in Cornwall, taking its store count to 111. MCA reports that north-east burger concept Fat Hippo is looking to open venues across the UK as it expands. The restaurant company will open its 15th restaurant in Shoreditch this week, making its London debut. HOLIDAYS & LEISURE TRAVEL: Hostelworld Group plc has updated on Q3 trading saying that ‘since reporting results for the first half, we have seen significant improvements in our key financial metrics and performance indicators.’ The company says that ‘Net Bookings in September reached 83% of 2019 levels, driven by the continuing recovery of Asia and Oceania regions (now at 70% of 2019 levels, up from 43% in June).’ Net Revenue ‘in September reached 104% of 2019 levels, reflecting the sustained growth in ABV and normalisation of cancellation rates throughout the year…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Move to shorter term bookings: Travel Republic reports that 32% of its bookings over the last 7 days have been for October half term holidays – reflecting an industry late booking trend. The top selling destinations for all in-inclusive breaks include Turkey, Egypt, Majorca, Benidorm and the Canary Islands. Andrew Earle owner of Andrew Earle’s Holidays has urged operators to increase holiday deposits to prevent cancellations and compensate agents for their work. Earle suggested deposits should be around £200 to ensure clients are committed… Holiday demand. ABTA reports that 61% of Brits are planning to holiday overseas in the next 12 months, financing travel plans by cutting back on non-essential spending elsewhere. Some 55% said they would cut back on eating out, 48% on leisure activities and 40% on clothes, shoes and accessories. Heathrow regains some lost volume but warns that the air travel outlook ‘remains uncertain’ amid economic turbulence, continuing Covid-19 concerns and war in Ukraine. It reported that almost 5.8m passengers used the London hub in September, 15% below 2019 levels. ABTA CEO Mark Tanzer has praised the ‘amazing resilience’ of the UK travel industry and is calling on government to freeze the current rate of Air Passenger Duty (APD) to help the sector continue its recovery. OTHER LEISURE: Playtech has reported that it ‘has entered into an amended €277 million RCF until October 2025, with a further one-year extension option.’ It says it will redeem ‘at par on 16 November 2022 €330 million of the €530 million senior secured notes due to mature in October 2023. This will be funded using current cash balances with the amended RCF expected to remain undrawn following the early redemption…’ Netflix reports £1.4bn of revenue from UK subscribers during 2021, up 1630% from 2020 UK subscription revenue of £79m. The large increase was due to the company abandoning the widely criticised practice of funnelling British income through other lower-tax European jurisdictions. FINANCE & MARKETS: For GDP data see Pubs & Restaurants above. The Bank of England yesterday confirmed that its bond buying programme will finish on Friday but said it was prepared to step up purchases before then. It says there is a “material risk” to financial stability… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The International Monetary Fund has said that tax cuts ordered by chancellor Kwasi Kwarteng and Liz Truss could boost growth in the short-term but it adds that they will “complicate the fight” against inflation. The IMF believes high inflation could persist in the UK for longer than in most other developed countries… Sterling weaker at $1.0986 and €1.1309. Oil price lower ate $93.77. UK 10yr gilt yield down 4bps at 4.42%. World markets weaker yesterday and London set to open down around 17pts 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. |
|
