Langton Capital – 2022-10-20 – Surveys, JET, red flags, Nero, DGE, Pernod, G4M. JET2, easyHotel etc.:
Surveys, JET, red flags, Nero, DGE, Pernod, G4M. JET2, easyHotel etc.:A DAY IN THE LIFE: I asked the dog the other day, just why it was that, despite being able to surmount every obstacle that we put in the way to stop her going upstairs, she wouldn’t, for love, money or copious amounts of dog food, hop in the car? But all I got back was an inquisitive, drooly stare which, it has to be said, is pretty much her answer to all and any question. Anyway, still a bit pushed for time so, without further ado, let’s move 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 JUST EAT TAKEAWAY – Q3 NUMBERS: Just Eat Takeaway held its Q3 analysts’ meeting yesterday and our comments are set out below: Trading: Just Eat said its strategy was unchanged, it plans to try and increase its penetration in markets where it is already established amongst the adult population. The markets with the highest penetration are Holland (40%), the UK (35%) and Germany (20%). Management said the Germany business was the most profitable food delivery business on the planet. Orders fell by 11% to 235m in Q3, but the company said the reduction in orders is mainly due to the large customer cohort acquired during the pandemic, who are now walking around cities instead of staying at home…. • 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: Trading: Alix Partners has commented on the UK licensed drinks industry saying that ‘the universe of pubs, bars, restaurants, cafes, and hotels – saw a net decline of one closure every hour in the third quarter of 2022.’ Begbies Traynor has released its latest Red Flag report saying it has seen ‘critical corporate financial distress levels jump as businesses deal with the deteriorating economic environment.’ It says ‘there has been a considerable increase in the number of businesses in critical financial distress over the last year, with a 25% increase in Q3 22 compared to Q3 21.’ Begbies adds that ‘Bar & Restaurants and General Retailers continue to be major drivers of this increase in critical financial distress, up 48% and 72% respectively, increases in Leisure and Cultural Activities, up 36%, and Media, up 48%, when comparing Q3 22 to Q3 21….’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Lloyds Bank’s latest sector tracker shows that ‘tourism and recreation firms post the sharpest fall in output in September, as customers rein in discretionary spending amid rising inflation.’ It says that ‘five of 14 UK sectors saw output and new order growth in September (up from three in August)’… • 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: The FT reports that mortgage rates may have reached their peak and could start to come down over the next few weeks following the shredding of PM Liz Truss’s mini-Budget. Rates on fixed deals are currently still at 14yr highs but the next moves on mortgage interest rates are likely to be downwards – at least at the time of writing. A BBC survey has found that 85% are now worried about the rising cost of living, up from 69% in January. Nearly nine in 10 were turning lights off to save money in the last week, as well as turning electrical goods off standby… Outlook for Christmas. A poll conducted by Savanta for the BBC suggests that ‘people are planning for smaller Christmases this year as prices soar’… Other news: Altus Group has warned that hospitality operators could face a £272bn rise in business rates next year following inflation reaching 10.1% in September… Only A Pavement Away, the hospitality sector charity aiding prison leavers, veterans and those facing homelessness find employment in the hospitality sector, has announced pub group Greene King as its first official Primary Partner. The Wine and Spirit Trade Association and the British Beer and Pub Association alongside the Scotch Whisky Association have called upon new chancellor Jeremy Hunt to cancel tax rises on alcoholic drinks. The joint letter says that the now-cancelled freeze on duties ‘underpinned the investment our member companies are making across the UK, supported hundreds of thousands of jobs, gave our industries stability and confidence at the time of rising energy costs, Covid recovery, supply chain pressures and fragile consumer confidence…’ COMPANY NEWS: Caffe Nero has updated on Q1 sales, saying that they are now running at 107% of 2019 levels… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Gaucho is opening a 200-cover restaurant in the listed Bank of Liverpool building in November. Diageo has announced that it yesterday launched and priced a $2.0 billion SEC-registered bond offering, consisting of $500 million 5.200% fixed rate notes due 2025; $750 million 5.300% fixed rate notes due 2027 and $750 million 5.500% fixed rate notes due 2033. Pernod Ricard has updated on trading saying it is confident sales growth would remain dynamic through its 2023 fiscal year… Starbucks yesterday announced it plans to sell the Seattle’s Best Coffee brand to Nestlé, with which the company established the Global Coffee Alliance in 2018. It says ‘this transaction will further strengthen the Global Coffee Alliance by allowing both companies to focus on their core strengths…’ Naked Wines has updated on trading saying that it is ‘pivoting to profit’. The company says it should ‘deliver adjusted EBIT of £9-13m in FY2023 with further improvement expected in FY24.’ CEO Nick Devlin comments ‘we recognise that in pursuit of rapid growth we have made mistakes. Whilst the business today remains materially bigger than pre-pandemic, in 2021 we bought inventory and added to our cost base in anticipation of sustained faster growth which has not been delivered; today we are taking steps to reset our cost base and unwind inventory levels…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Leon is opening three new sites across central London: Brixton (TBC), Euston Road (26 Sep), and Battersea (10 Oct). The company also announced its intention to expand in other areas of London including Clapham and Southbank later in the year. LEON’s growth plans aim to see the chain have 100 sites by the end of the year. Inflation driving revenues. Nestlé has reported organic sales growth of 8.5% to £61bn after it passed on a hefty 7.5% price increase to consumers. Movement in actual sales volumes only accounted for 1% of the 8.5% organic sales growth. UK online plant-based supermarket, The Vegan Kind, has been sold in a pre-pack administration. Company Rescue reports that ‘both Retail Week and Retail Gazette have reported that the restructuring advisors Teneo have been instructed by Wilko, the homewares store, to look at how it can turn-around its fortunes.’ The Artisanal Spirits Company has announced that its brand, The Scotch Malt Whisky Society, has signed a new franchise agreement with F.J. Korea in South Korea… HOLIDAYS & LEISURE TRAVEL: Jet2 plc has announced it has ‘entered into a new Revolving Credit Facility with Barclays Bank plc; Lloyds Bank plc; HSBC UK Bank plc and National Westminster Bank plc.’ It says this ‘provides the Group with available facilities of up to £300m, which is an increase on its previous RCF of £100m.’ easyHotel has acquired eight franchised Benelux hotels for €145m, totalling 793 rooms, with 3 in Amsterdam, two in The Hague, one in Rotterdam, one in Maastricht and one in Brussels. The company currently has a total of 42 owned/leased and franchised hotels, which it aims to expand to 51 over the next 18 months, and 100 by 2026. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Travel Counsellors reports that cruise bookings are up 35% YTD versus 2019 comparatives. The home working agency has seen almost a third (32%) of cruise bookings in the last 28 days for winter 2022 sailings and 48% for summer 2023. Royal Caribbean Group president Jason Liberty expects 2023 to be a record-breaking year for the cruise sector globally and plans to spend big sums on marketing campaigns. Marriott reports that it is ‘poised to become the largest hotel company in the Caribbean and Latin America, expanding its presence significantly in secondary and tertiary markets in the region.’ The company says it ‘has reached an agreement with Hoteles City Express to acquire the highly regarded City Express brand portfolio, marking Marriott’s entry into the affordable midscale segment with its 31st brand.’ OTHER LEISURE: Gear4Music has updated on H1 trading to end-September saying that UK sales were down 3% at £35.5m with total sales up 2% at £66.3m. The company reports that its gross margin in the half is expected to be 26.3% (last year 28.0%). Net debt at the half-end was £21.8m, down 2.4m on the year end figure. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Microsoft admits that it has cut around 1,000 jobs in ‘structural adjustments’ in the face of surging inflation and stalling economic growth. In the US, a strong dollar has also hammered the overseas earnings of big multinationals. Tesla has reported quarterly numbers to end-September showing that supply shortages and logistics bottlenecks have caused problems. Revenue was lower than expected but revenues remain up 50% on last year. FINANCE & MARKETS: Inflation. The CBI has responded to news from the ONS that UK CPI had returned to its 40yr high levels of 10.1%, saying that it will grow further in October when energy price increases feed through… Houses. Builder Bellway yesterday cautioned that slowing demand is likely to restrict growth in the sale of new houses. The Bank of England has said that the government did not tell it about its tax cut plans before they were announced in last month’s mini-budget. Sterling weaker at $1.1199 and €1.147. Oil higher at $93.06. UK 10yr gilt yield down 4bps at 3.89%. World markets weaker yesterday but London set to open around level 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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