Langton Capital – 2022-11-10 – YNGA (H1), DOM (Q3), Nightcap, JDW (conf. call), gaming industry etc.:
YNGA (H1), DOM (Q3), Nightcap, JDW (conf. call), gaming industry etc.:A DAY IN THE LIFE: Quality goods still seem to be on the back foot in terms of sales when compared with shoddy but much, much cheaper, items. And that can work if you’re talking about unimportant stuff but, if the hinge on your door is made from twigs and mud and it lasted just long enough for the builders to present you with their bill and be gone, it’s another matter entirely. And if a door handle packs up, the rod snaps or whatever, then you might be stuck in a room and that’s a nuisance at best and it has the makings of a tragedy at worst. Which reminds me, does anyone know the name of a good joiner? We have a number of door jambs that need replacing after receiving the attentions of a sledgehammer. 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 YOUNG & CO – H1 RESULTS: Young & Co has reported H1 numbers and our comments thereon are set out below: Trading • YNGA reports that revenues are some 24.7% higher at £186.5m with adjusted PBT up 14.7% at £25.0m. • Earnings per share on an adjusted basis are 34.54p (up 22.4%) and an interim dividend of 10.26p (up 20.0%) is being proposed • The company reports that ‘like-for-like revenue was ahead of same period in 2019 by 6.2%, and up by 20.4% against last year.’ • YNGA says its margin was ‘15.5%, down from last year’s 18.1% which benefited significantly from the reduced 5% VAT rate (£8.2 million) and lower utility costs (£1.9 million on a like-for-like basis).’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. JD WETHERSPOON – Q1 ANALYSTS CALL JD Wetherspoon yesterday held an analysts’ call for Q1 trading and our comments thereon are set out below: Trading: • JDW said that trading is slowing slightly since its last market update. • Sales were up 10.1% in the first 9 weeks of the new financial year, compared to 8.9% in the last 5 weeks. • JDW has just launched a new menu in London this month with some price changes but refused to comment on pricing in particular. • The new menu has only been trading for 6 days, so it is hard to discern the impact of it just yet. • JDW said that food, relative to drink, is performing a little bit better. However, some other operators have indicated that they are seeing the opposite. • 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: Cost inflation: The Institute of Grocery Distribution (IGD) reports that the rate of food price inflation will reach a peak YoY of between 17-19% in early 2023, up from its previous forecast of 14-16%. This will impact both corporates via their cost bases and consumers. It will potentially leave the latter with less to spend on non-essentials… Excess demand. Bank of England economist Huw Pill has warned that a rise in people leaving the workforce could lead to excess demand and inflation and therefore higher interest rates… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Wealth distribution: The Institute for Fiscal Studies has wealth in the UK is becoming increasingly concentrated in older age groups. This matters because it could influence spending patterns. Part of reason for the concentration is because housing is more expensive and money is ‘wasted’ on rent by younger people and part of it is arithmetic. Baby booms in the 1940s and 60s mean that these were simply numerically large populations… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Labour issues: A new survey conducted by trade bodies from across the hospitality sector has concluded that the recruitment crisis is costing operators some £22bn a year in lost revenues. The survey suggests that the vacancy rate for hospitality businesses amounts to some 11% of the workforce… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Other news: Savills reports that Costa Coffee topped its growth table since 2019 in terms of unit growth, with 256 openings, followed by Starbucks with 198 and KFC with 105. Several less established players have also been expanding rapidly, with bubble tea café Mooboo opening 66, Caprinos Pizza 49 and Dixy Chicken 28. See also comments on Fireaway Pizza below. Kylie Minogue is launching her own non-alcoholic rosé, using a blend of European grapes and green tea from Yunnan in China. COMPANY NEWS: Domino’s Pizza Group has updated on Q3 trading, saying it has seen ‘continued market share gains and strong start to Q4’ and adding that it ‘will roll out on Just Eat in the UK and Ireland following very successful trial.’ The company reports that LfL system sales in Q3 were up 2.4% on last year and up by 19.6% on 2019. The company says FY22 EBITDA is ‘expected to be in the range of £125m – £135m,4 in line with current market expectations…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Nightcap has reported full year numbers (53wks to 3 July) saying that revenue rose to £35.9m from £6.0m in the prior year with a PBT of £238k against a loss of £5.3m in the prior year. The CEO says the company will now slow its opening programme in the face of the uncertainty regarding the economy… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. JD Wetherspoon shares slid yesterday and impacted the wider sector as the group pointed to a recent slowdown in trade. The Mail points out that the company ‘warned that staff, food and repair costs were ‘substantially higher’ than a year ago…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. The Wendy’s Co reported Q3 numbers yesterday, saying that revenue came in at $532.6 million, up 13.3% year-over-year, but still falling short of analysts’ estimates by $6 million. President and CEO Todd Penegor comments that this was ‘a fourth consecutive quarter of double digit global same-restaurant sales on a two-year basis.’ He says ‘we expanded our global footprint, held global digital sales mix at approximately 10%, and accelerated our US breakfast daypart over the course of the quarter following our first major menu innovation since launching.’ Simon Longbottom will step down as CEO of Stonegate at the end of next February, being replaced by BrewDog’s chief operating officer David McDowall. Simon Longbottom commented ‘It’s been an amazing journey but the time is now right for me to pursue other interests abroad. As a shareholder and a fan, I will be supporting the business from afar’… Per MCA, Fireaway Pizza plans to open 40 stores in 2023, with 28 confirmed sites already in the pipeline. The company said it will focus ‘more up north as most of our stores are currently in the south’. Fireaway opened 50 stores in 2021 and 41 stores in 2022. BrewDog’s controversial ‘anti-sponsorship’ campaign of the Qatar World Cup has been labelled as ’empty self-promotion’ on social media platforms as the brewer & bar operator will avoid spending money via its non-sponsorship and still plans to show matches at its venues. HOLIDAYS & LEISURE TRAVEL: Spain’s Secretary of State for Tourism, Fernando Valdés, has told Travel Weekly that 2022 was positive – strengthened by an ‘excellent summer’ – as British travellers flocked back after two years of disruption… Eleni Skarveli, director of the Greek National Tourism Organisation (GNTO) for the UK and Ireland, has said that the UK has overtaken Germany to become the country’s top source market for overseas visitors… Britannia has once again been named as the UK’s worst hotel chain, coming bottom in a consumer survey for the 10th year in a row. The annual Which? survey describes them as ‘tired and tatty’, with a ‘rough and ready’ feel. Guests awarded the chain an average of two stars across every category, achieving an overall customer satisfaction score of just 56%. Some ‘thousands’ of flights to Florida are reported to have been cancelled and theme parks closed as the state awaits the arrival of Hurricane Nicole. THE UK GAMING INDUSTRY: Valuations and the size of games. Further comment on the gaming industry. How to value a company in the video game industry? Introduction: • Multiples of revenue are often the metric used when making acquisitions. This may seem aggressive but, for winning games, the marginal cost of production is very modest whilst the upside rewards can be huge. • Getting the game right, of course, is critical. But once a game has hit the big time, its longevity can be extended by DLCs (downloadable content) and expansion packs, updates and the like. • By way of example, the top five games in the world, Honour of Kings, League of Legends, World of Warcraft, Fortnite and Grand Theft Auto, have generated over $55bn (that’s billion) between them over their combined lifetimes. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. OTHER LEISURE: Meta is cutting its workforce by 13%, sacking around 11,000 employees… FINANCE & MARKETS: Property agent Savills says that house prices in the UK could fall by 10% next year but rise by 1% in the year thereafter. If inflation remains high in both years, the drop in real-term prices will be considerably larger. Sterling weaker at $1.1401 and €1.136. Oil lower at $92.52. UK 10yr gilt yield down 9bps at 3.45%. World markets down yesterday and London set to open down around 32pts as at 6.30am. THE AQUIS MARKET: Broker VSA Capital is hosting an Aquis Day on Tues 29 November at the Royal College of Surgeons (38-43 Lincoln’s Inn Fields, London, WC1A 3PE). The event will feature around 20 companies, who will present to attendants and take part in a competition to win the ‘Britain’s Got Aquis’ title. Judges on the day will include Andy Brough (Schroders) and Judith Mackenzie of Downing LLP. Tickets and details are available HERE https://www.eventbrite.co.uk/e/the-vsa-capital-aquis-showcase-event-tickets-430890363677?aff=odeimcmailchimp&mc_eid=cfe56acbe0&mc_cid=cd83de005f Attendance costs £20 – but Langton has a number of complimentary tickets and we’re open to suggestions as to who we should give them to…. Drop us a line. 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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