Langton Capital – 2022-11-01 – Fulham Shore, trading, closure risks, wages, Shaftesbury, Thwaites etc.:
Fulham Shore, trading, closure risks, wages, Shaftesbury, Thwaites etc.:A DAY IN THE LIFE: Langton is a microscopic speck of a company but we still had to spend virtually all of yesterday doing VAT and wage calcs, sadly paying the associated bills and in various other month-end tasks that we’d really rather didn’t exist. And then, by the time we drew breath and began to turn our attention to the day job, the day itself was virtually over. Which isn’t very helpful. But if you’re going to lose a day to admin, better, arguably at least, to lose a Monday rather than one of the heavier announcement days or, heaven forbid, the weekend. Anyway, enough of that. Some company news today and more economics later in the week. 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. 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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 THE FULHAM SHORE – TRADING UPDATE & BUSINESS EXPANSION: The Fulham Shore has today updated on trading & commented on business expansion and our comments are set out below: Trading: • FUL reports that ‘during the six months to the end of September, in spite of challenging political and macroeconomic circumstances as well as recent sporadic train and tube disruptions, the Group traded in line with management expectations.’ • It says ‘this performance was driven by the popularity of both Franco Manca and The Real Greek’s excellent value-for-money propositions.’ • The company adds ‘as a result, Group revenues for the Period grew approximately 35% when compared with the same period in 2019 prior to the onset of Covid-19, and some 25% ahead when compared with the same period to September 2021.’ • FUL says ‘the Company’s net cash position before lease liabilities recognised under IFRS 16 as at 26 September 2022 was over £2.6m. The Group has undrawn bank facilities of £16.9m, providing substantial financial headroom of over £19.5m.’ Trading outlook: • Re the outlook, FUL says ‘macroeconomic challenges including inflation, rising interest rates and political uncertainty continue to affect consumer confidence and, combined with input cost inflation, are presenting trading conditions that are more unstable and unpredictable than at any time in recent memory.’ • The company adds ‘these rising costs and what, if any, relevant government support leads to a lack of transparency for short term trading.’ • FUL says ‘as previously stated, Fulham Shore plans to open around 18 restaurants during the 12 months to 26 March 2023’ and it says ‘the Group will review on an ongoing basis its opening target for the 2024 financial year based on the ever-evolving economic and political outlook, and will share subsequent updates as appropriate.’ New openings: • FUL reports that ‘since its update published on 31 August 2022, the Group has opened four Franco Manca pizzeria in Lincoln, Hove, Chichester and Cardiff, and two The Real Greek restaurants in Gloucester Quays and Solihull.’ • It adds ‘these new locations have all been busy from the outset. These openings take the total number of restaurants operated by the Group to 95.’ • FUL says ‘the first The Real Greek in Scotland, located in the successful new shopping scheme St James Quarter, Edinburgh, is also being fitted out ready for a December opening.’ Strategic expansion • FUL reports that it ‘has launched its debut range of five premium Franco Manca Chef’s Selection cook-at-home pizzas.’ • It says ‘the range has been developed through a licensing partnership with the fine Italian food business Rondanini and is available to purchase in over 500 supermarkets across the UK from this week.’ • FUL adds that it ‘has the opportunity to expand into more stores (additional to the current 500) over the coming year, and to partner with further grocery retailers from late 2023.’ • The group says its ‘expansion into retail operations complements its portfolio of restaurants, will drive brand awareness and enable the Group to introduce the Franco Manca brand to consumers throughout UK, especially where Franco Manca does not yet have a restaurant presence.’ Company conclusion: • Chairman David Page says ‘after many months of careful development we are thrilled to launch our debut range of Franco Manca cook-at-home sourdough pizzas which are now available in over 500 supermarkets.’ • He says ‘this is a very exciting new strategic development for Franco Manca and The Fulham Shore, which complements the appeal and success of our consistently busy and growing portfolio of restaurants, and we are looking forward to seeing it develop.’ • Mr Page adds ‘we’re delighted that underpinned by the relevance of our Franco Manca and The Real Greek brands and their value-for-money propositions, both our established and new restaurants performed well during the first half of the Group’s financial year.’ • In conclusion, the Chairman says ‘this has led the Group to trade in line with management expectations and represents revenue growth of over 35% compared with the same period in 2019 and some 25% ahead when compared with the same period to September 2021.’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. TESTING THE MODEL – DO BUSINESSES HAVE A ‘RIGHT TO EXIST’… This is part of an email that was earlier sent out to clients. Summary: Basically, no. Economies evolve and basically nothing has a right to exist. At least in the corporate world, that is, because, as horse shoe manufacturers, wooden-barrel coopers and countless dozens of other trades have found over time, demand can move on and, in times of economic austerity, that can happen rapidly. • 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: A new survey undertaken by UK Hospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster has suggested that a third of hospitality businesses at risk of going bust due to soaring costs. See also our comments above… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Labour market: Interesting to note that Aldi is raising its pay levels for the third time in a year. It is paying a minimum of £11 per hour in what amounts to a further 5% increase. The move will put pressure on other retailers – and hospitality operators – who may feel that they need to compete in order to source staff… Celebrity chef Jason Atherton has told the Evening Standard that staff shortages could mean he will have to start closing restaurants in the new year. He currently has seven venues in London but has around 350 unfilled staff vacancies… Consumer behaviour: The financial squeeze will be felt more rapidly by some consumers than others. The date at which mortgages come off their fixes may be key. The MCA reports Lumina Intelligence as saying that that average spend at lunch and dinner has fallen by 20% and 12% respectively. It says that visit frequency is 3% lower… Pragma Consulting also reports on the consumer squeeze. It addresses the issue from the standpoint of retailers, saying that ‘challenged finances are heavily impacting consumer spending across all retail categories, with consumers making fewer purchases (46%), going out less (-36%) and more buying second-hand goods (+15%) than 3 months ago… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Taxation: The Resolution Foundation reports that tax rises are “likely” to feature in the government’s planning to deal with an “unpalatable menu” and balance the books… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Supply problems. Whilst many supply issues have eased, avian flu may well disrupt the supply of turkeys in the run up to Christmas… Other news: Big week for statistics & economics (see Finance & Markets below) including interest rate decisions in the UK and the US and PMI data for the economy as a whole and the service sector in particular. US smaller restaurants. Alignable in the US has reported that it believes around 49% of small restaurant businesses were unable to pay their rent in October. In September, the number was 36%, an improvement from the August and July figures of 46% and 45%, respectively. Restaurants should have a boost to their cash flow over Christmas. COMPANY NEWS: West End property owner Shaftesbury PLC has updated on portfolio valuation and vacancy ahead of releasing its preliminary results for the year ended 30 September 2022 on 29 November 2022. CEO Brian Bickell says ‘the West End has enjoyed its first summer of trading unaffected by Covid restrictions since 2019, with strong domestic footfall and a rebound in international visitor numbers, which have continued into the first weeks of autumn.’ Mr Bickell says ‘our occupiers continue to report trading revenues, on average, above 2019 levels and demand for space in our carefully-curated, popular locations remains good across all uses, reflected in a return to pre-Covid occupancy levels and further growth in rental values…’ Campari has taken a minority stake in UK-based global spirits incubator Catalyst Sprits, for an undisclosed sum. Oakman Inns says that every cup of coffee sold ‘across the group’s pubs and hotels has resulted in planting a tree, helping to offset some of the daily carbon emissions produced by the business and its stakeholders.’ Daniel Thwaites PLC has announced that non-executive director Oscar Yerburgh has stepped down from the board ‘and has been replaced as a non-executive director by Roseanna McKinley.’ Chairman Richard Bailey says ‘in line with the Yerburgh Family’s Constitution, Oscar Yerburgh is passing on, by rotation, the role of family non-executive director to his sister Rosy McKinley.’ The Garden Cider Company has reported ‘a record-breaking harvest’ saying that it has teken ‘delivery of over 100 tonnes of garden apples at their Chiddingfold-based farm.’ It says ‘the apples are provided by residents from across the South East of England, as locals look to make use of their unwanted garden fruits.’ HOLIDAYS & LEISURE TRAVEL: Travel Weekly comments on the latest Deloitte Consumer Tracker saying that ‘travel could be the sector hit most sharply by consumers reining in spending between now and the end of the year…’ Regional & City Airports, which operates Norwich, Bournemouth and Exeter airports, has said that summer passenger numbers were strong as the operations “bounce back from the impact of the Covid pandemic”. OTHER LEISURE: Elon Musk is reported to have dissolved Twitter’s board of directors. A first round of job cuts, that could impact up to 25% of the workforce, is said to be underway. Mr Musk is said to be considering a charge of up to $20 per month for verified accounts where the authenticity of the Twitter account is authenticated and the account is active. FINANCE & MARKETS: Eurostat has reported that the annual rate of inflation in the euro zone in the year to October was a higher than expected 10.7%. The Bank of England reports that mortgage lending fell in September with mortgage approvals down from 74,400 in August to 66,800 in September. Zoopla reports that demand for property in the South East of England is down by 40% since the disastrous mini-Budget. Zoopla comments that demand across the UK as a whole was down by around a third. Quantitative tightening is due to start from today. Sterling weaker at $1.1512 and €1.1611. Oil lower at $94.14. UK 10yr gilt yield up 4bps at 3.54%. World markets heading better yesterday and London set to open up around 49pts 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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