Langton Capital – 2023-01-19 – Labour issues, trains, ROO, JET, PFD, G4M, FDEV, HOTC & other:
Labour issues, trains, ROO, JET, PFD, G4M, FDEV, HOTC & other:A DAY IN THE LIFE: Flagging a bit under the weight of company announcements. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories (after the ellipses) 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 DELIVEROO – Q4 TRADING UPDATE: Deliveroo has this morning updated on Q4 trading and our comments thereon are set out below: Headline numbers: Deliveroo reports it has ‘approximately broken even’ in EBITDA terms in H2 of last year – this including Australia & The Netherlands. It says ‘this represents a significant improvement in adjusted EBITDA margin (as % of GTV) from (3.2)% in H2 2021 to (1.9)% in H1 2022 to ~0% in H2 2022.’ The company says ‘full year profitability [is] ahead of previous guidance, driven by gross profit margin expansion and cost control.’ It adds that ‘FY 2022 adjusted EBITDA margin (as a % of GTV) is now expected to be approximately (1.0)% for all operations (including Australia and the Netherlands), better than previous guidance of (1.2)-(1.5)%.’ Gross Transaction Value is up by 9% on last year at £1.8bn. Order numbers are down by around 2% at 75.1m. Inflation was 8%. The company reports that ‘adjusted EBITDA is expected to continue to improve in 2023’ and it says ‘management…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. JUST EAT TAKEAWAY – Q4 CONFERENCE CALL: Following the release of its Q4 trading update, Just Eat Takeaway hosted a conference call for analysts and our comments thereon update are set out below: The numbers: See also earlier email. Co says ‘after a period of significant investment, the company is back to profitability.’ Co is nearly 2x the size it was pre-pandemic. The company is steering comps to FY20, saying that FY21 was a rather exceptional year in terms of sales. CEO Jitse Groen says ‘the earnings capacity of the company has increased’ since pre-pandemic. ‘Efficiency’ has improved. Co says ‘even in a period of no top-line growth’ the co has managed to improve profitability. JET moved… • 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: Labour: Think-tanks UK in a Changing Europe and the Centre for European Reform claim that the end of the free movement of people post-Brexit has led to a shortfall of around 330,000 workers in Britain… Cost of living: The cost of living continues to ramp up, with TfL announcing that London fares will rise by nearly 6% in March of this year. A pay as you go bus journey will soon cost £1.75. It marks the end of a TfL fare ‘freeze’ across the capital… Which? reports that consumers who buy supermarkets’ budget ranges bore the brunt of food price inflation in December, with the price of budget items up 20.3% on average… • 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: CEBR reports that 39% of over-55s said that their outgoings exceeded their income during parts of 2022, with almost 1.5 million over-55s taking on debt in 2022. The research found that the suspension of the triple lock last year impacted the personal finances for 57% of retirees. Technomic comments on Gen Z saying that the generation ‘spent their “formative” restaurant years during the pandemic’ and they ‘will be shaping foodservice to come, especially as the largest population cohort–millennials–will be aging out of their prime restaurant-spending years.’ It says a survey suggest ‘nearly half of all consumers (48%) say they are going to restaurants less often because of inflation; however, that number drops to 34% of those ages 18-24…’ Restaurant numbers: Lumina Intelligence reports that the top 10 branded restaurants by outlets saw a combined outlet decline of 0.8% in 2022… Inflation: UKHospitality and the BBPA have pointed out that hospitality prices have surged despite an overall marginal decline in the CPI to 10.5%… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Sky comments on the modest drop in the rate of inflation between November and December saying ‘a second consecutive monthly fall from October’s high of 11.1% suggests price rises may have peaked and the descent towards less corrosive rates, perhaps below 6% by the middle of the year, has begun…’ Other news: Licensing solicitors John Gaunt has commented on current legal trends. It refers to enforcement actions, saying ‘we hope that this year will see an emphasis on partnership working referred to in Licensing legislation to resolve any issues rather that our two more recent experiences….’ World Coffee Portal’s latest market report, Project Café UK 2023 suggests that ‘the £4.9bn UK branded coffee shop market achieved 11.9% sales growth over the last 12 months, expanding 4.4% to reach 9,885 outlets…’ Rail minister Huw Merriman has conceded that rail strikes have cost the UK more than settling the disputes months ago would have. The government was afraid of setting a precedent that other workers would seek to follow. COMPANY NEWS: Hotel Chocolat has updated on trading over Christmas & for its half year saying LfL sales were up 10% in the 9 weeks to Christmas and they were up 7% in the 26 weeks to that date… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Just Eat shares finished the day up 4% yesterday on confirmation that the group had been EBITDA positive in H2 last year. The company will make EBITDA or around €225m this year but it expects to still see net cash outflows. Lucky Voice is set to open a £1.2m new karaoke site near London Liverpool Street station. The new venue will occupy a c4,800 square foot ground floor unit in Devonshire Square and is taking bookings from 18 February. Imbiba has formally announced the closure of a £90m funding round ‘to support the UK’s leading Leisure, Lifestyle & Entertainment growth brands.’ Managing partner Darrel Connell says ‘the significant investment we have secured for our new fund is a huge vote of confidence for Imbiba and the wider leisure, lifestyle and entertainment sector in the UK…’ Premier Foods, which to some extent benefits when eating out is under pressure, updates on Q3 trading saying sales have been strong with total sales up 12.0% vs last year and branded sales up 8.8%. The company says Grocery (Bisto, Sharwoods, Paxo & others) has been ‘particularly strong’… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. HOLIDAYS & LEISURE TRAVEL: Skyscanner reports that bookings in the second week of January are up 31% vs pre-pandemic levels. The top searched destinations so far this month are Spain, the US, Italy, ‘everywhere’ and India. New US World Tourism Organisation (UNWTO) projections show that international tourism arrivals could return to pre-pandemic levels in Europe and the Middle East this year after a stronger than expected recovery in 2022. More than 900 million tourists travelled internationally in 2022 – double the number recorded in 2021 though still 63% of pre-pandemic levels. Eurocontrol forecasts Europe’s air traffic will reach 92% of 2019 levels this year, up from 85% in 2022, and hit 95% in August ‘as capacity and staffing issues are progressively tackled’. VisitBritain has scheduled more than 120 international travel trade buyers to take part in a series of UK educational visits. The national tourism agency’s ‘Showcase Britain’ event gets underway at the Tottenham Hotspur Stadium in London on January 26. STR points out that ‘after 25 consecutive months of year-over-year declines, U.S. hotel construction increased slightly in December…’ OTHER LEISURE: Frontier Developments, which warned on profits earlier in the month, has reported H1 numbers saying that revenue rose from £49.1m to £57.1m with adjusted EBITDA of minus £600k vs a loss of £900k in the prior year… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Gear4music has updated on trading for the quarter to end-December saying that UK revenue was flat at £26m and RoW revenue was up 11% at £23.5m. the company CEO, Andrew Wass, says ‘we are pleased to report that, despite several external challenges, financial performance during our FY23 peak seasonal trading period was in line with the Board’s expectations…’ • 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: Commenting on yesterday’s inflation statistics, the CBI says there is ‘a growing body of evidence that the UK has passed peak inflation…’ The BCC also suggests that the peak has passed. It says ‘this simply means that prices will stabilise at a much higher level than one year ago…’ Chancellor Jeremy Hunt is said to be planning a “slimmed down” spring budget with no tax cuts for 15 March… Gita Gopinath, deputy managing director of the International Monetary Fund, has suggested that the IMF is set to upgrade its forecasts for the world economy. The BCC says ‘most Small and Medium Sized Enterprise exporters report no improvement to exports, with 27% reporting decreased export sales in the quarter and 47% reporting no change. Sterling up at $1.233 and €1.1423. Oil lower at $83.94. UK 10yr gilt yield down 3bps at 3.31%. World markets down yesterday & London set to open around 37pts lower as at 6.30am. RETAIL WITH NICK BUBB: • See premium. 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