Marston’s, Capital Pubs, Artisanal, SAGA, utility bills, cost of living etc:

A DAY IN THE LIFE:

A scrappy kind of day yesterday where I had to reheat my morning coffee twice after being interrupted by phone calls, other extraneous events and general low-level busyness such that I was forced, in the end, to take mercy on the sad-looking, scummy sludge and tip it down the sink.

Actually, I threw it out of the window to give the daffs a drink but I know, I’m a martyr to my job.

And that gives me a kind of warm glow which, since my coffee was stone cold, is just as well but, at the end of the day, said martyrdom might be little more than a lack of discipline and an attitude of general slovenliness on my part when it comes to getting things done.

Indeed, hypocrisy is alive and well and is living in my house because, though I’m happy to tell other people ‘not to watch your shot as the ball will be back over your side of the net before you can blink,’ I’m not good at taking my own advice and, just because I want a little snooze, it doesn’t necessarily mean that anyone else does.

Anyway, best move things along, the coffee’s going cold. On to the news:

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MARSTON’S AGM & Q1 TRADING UPDATE:

Marston’s has updated on Q1 trading and our comments thereon are set out below:

Like for Like numbers: Marston’s reports that LfL sales in the 16 weeks to 21 January were up by 12.9% vs FY22 and up by 4.5% on the pre-Covid FY20 H1. LfL sales were up 6.8% in the first 8wks of the trading period under review (vs FY22) and up by 19% in the last 8wks, when Omicron fears hit last year’s trade. Versus the same period in FY20, when none of us had heard of Covid-19, let alone Omicron, sales were up 5.0% in the first 8wks and up 4.1% in the second 8wks. MARS has a very limited exposure to the London market and has been little-impacted by rail strikes

Total sales: Total retail sales, including the impact of new openings and closures, were up by 14% vs FY22 and up 7.3% vs FY20.

The ‘Big Days’: MARS comments that, across the ‘big-5’ days (Christmas Eve, Christmas Day, Boxing Day, New Year’s Eve and New Year’s Day), sales were up 26% vs FY22 and up 13% vs FY20. The group maintains that big occasions are becoming relatively more important – as consumers perhaps prioritise spending – and its sales on such days have been strong

Costs: This is a trading update and comments on costs are limited. But MARS does say that it has hedged its electricity costs for the remainder of its financial year and it will not be changing its guidance re full year numbers. There is no comment on balance sheet issues, debt or cash flow.

Company comment: CEO Andrew Andrea comments ‘we have continued to see positive sales momentum through the festive season and into the New Year, with particularly strong demand on the key Christmas and New Year trading days.’ The CEO adds ‘whilst we still have certain cost challenges to navigate in 2023, we are well-positioned to continue to progress our strategy and are encouraged by the level of consumer resilience experienced to date.’ Mr Andrea says ‘the pub clearly remains an affordable treat which is attractive to consumers, and we continue to see good traction from those sites within our portfolio which have been converted to our Signature format.’

The company continues ‘Marston’s pub estate is well-invested, and our geography and proposition lends itself to benefit from underlying consumer trends.’ The CEO concludes ‘whilst still early in the New Year, trading momentum continues to build, and our primary focus remains to meet our strategic goals of achieving £1 billion sales and reducing our debt to below £1 billion with all the subsequent benefits that both of those milestones will bring to our shareholders.’

UTILITY BILLS:

Question:

Here’s a question that will have a lot of different answers: what are you paying for your gas and electric?

It will depend very much of if and when the contract was fixed but it would be very interesting to know and we can summarise the results later in the week. Please let us know.

PUBS & RESTAURANTS:

More on energy bills:

Sacha Lord, the night-time economy adviser for Greater Manchester, has demanded a fast-track investigation into why energy support for hospitality businesses has been withheld…

Cost of living crisis:

The Resolution Foundation suggests that the cost of living crisis will worsen before it gets better. It says that, though some wholesale energy prices are falling, real wages may not hit 2022 levels until the end of 2027. It says that some demographics are going to be more negatively impacted than others…

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Inflation:

Food suppliers have not let Tesco chairman John Allan’s suggestion that inflation was more their fault than it was Tesco’s go unchallenged. The Food & Drink Federation has said suppliers have seen a “massive” rise in costs that they have had no alternative but to pass on…

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Footfall:

Springboard reports that footfall for the week ended 21 January was up 11.2% YoY but still down 12.1% on pre-pandemic levels…

Trading:

A Morning Advertiser poll has found that January trade has been mixed for pubs in general. It finds that 12% of operators say trading was significantly better than anticipated with another 21% saying it was slightly better. Some 20% found it marginally worse and 16% found it considerably worse. A previous poll by The Morning Advertiser also ‘revealed trade was mixed during the Christmas period’.

UKH has said that ‘the King’s coronation will be a spectacle celebrated by millions and hospitality will no doubt be at the centre of a historic moment for the country…’

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Other news:

In the US a poll by KURU Footwear has found that 27% of restaurant workers believe they will have left the industry a year from now. Elsewhere, data from Alignable, released in December, shows some 11% of small restaurant owners were reducing their staff size.

COMPANY NEWS:

City Pub Group updates on trading for Q4 and for the full year ended 25 December 2022 saying  ‘trading in Q4 delivered accelerated LFL sales growth compared with 2019 of 7.8% as a result of improved planning to maximise revenues from events such as the World Cup and Christmas.’ It reports ‘the performance would have been even better, had it not been for the rail strikes, especially those towards the end of the year, where we estimate lost revenue to be in the region £0.75m (c. 3.5% of revenue for Q4)….’

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Fuller’s shares finished yesterday off their lows. The shares were down around 4% (down 19p to 475p) on the company’s announcement that it would miss estimates due in large part to ongoing train strikes.

Chapel Down yesterday reported Net Sales Revenue, which excludes duty, up 10% to £15.6m for the year ended 31 December 2022…

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The Artisanal Spirits Company updates on full year trading to end December saying ‘revenue for the year ended 31 December is expected to show growth of approximately 20% over the previous year (FY 2021: £18.2 million), with this strong year on year performance being slightly ahead of the consensus revenue forecast of £21.6 million…’

The Top Employers Institute has recognised Wetherspoon as a Top Employer United Kingdom 2023…

Gail’s  Bakery has signalled its expansion across the UK with its first site in the North, located in Wilmslow, Cheshire, opening on 16 February. The bakery chain is planning two further openings in Manchester and Altrincham.

Street food market operator KERB is set to open its first overseas location next year in Berlin. The company says ‘we are delighted to be working with the Sony Centre to develop a world-beating food hall in the heart of Berlin’s Potsdamer Platz, in a brilliant building, working alongside the very best of the Berlin food scene.’

Gail’s is to open its site in Manchester city centre in spring this year.

Gusto Italian has announced Kat Schofield as its new Head of Marketing. Schofield is joining from Revolution Bars Group where she currently heads up Brand Marketing for Revolución de Cuba.

Toggle’s new platform, Toggle Tickets, will enable hospitality venues to sell tickets direct to consumers for zero commission. Operators can set the number of tickets they want to sell, along with the price, with customers then able purchase direct from the venue’s website.

HOLIDAYS & LEISURE TRAVEL:

Saga plc has updated on trading saying ‘we remain on track to report an Underlying Profit Before Tax of between £20m and £30m, in line with previous guidance.’ It adds ‘revenue for the Group is expected to be between 40% and 50% ahead of the prior year, driven by continued Cruise and Travel recovery following the pandemic…’

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Brittany Ferries reports January bookings up 20% YoY, with 125,000 more passengers opting to travel on the company’s cross channel routes to five destinations in France and two in Spain. The upturn in bookings comes as new ship Santona heads to Europe ahead of entering into service in March.

Heathrow Airport had to cancel dozens of flights yesterday morning due to a freezing fog. Airlines including British Airways had to cut 15% of their scheduled flights due to poor visibility.

Travel Weekly reports Barrhead Travel as saying that low cruise fares are helping to drive “booming” booking levels. Barrhead says ‘the pricing has never been more attractive, particularly for the family market.’

Marriott reports that half of the rooms it signed in 2022 were in international markets, including key growth markets such as India, Saudi Arabia, Mexico, and the Caribbean. During the year, the company added 394 properties, representing more than 65,000 rooms on a gross basis, growing the system 4.4%. Including deletions of 1.3%, net rooms increased 3.1%.

Border Force staff are to strike on 1 February.

OTHER LEISURE:

Spotify Technology is reported to be planning to announce layoffs this week, with the exact number not yet being specified. Other technology companies such as Alphabet, Amazon and Microsoft have all cut thousands of jobs recently.

Audioboom reported revenues up 25% YoY to $75.5m as the podcast platform became the fourth biggest publisher in the US. The company reported EBITDA up 16% to $3.6m.

Twitter is reportedly being sued by the Crown Estate over alleged unpaid rent for its London headquarters.

FINANCE & MARKETS:

The EY ITEM Club has updated its forecasts for the UK economy and says it may see a deeper recession than previously thought with a contraction of 0.7% for 2023 as a whole. Its earlier forecast was for a 0.3% contraction. EY nonetheless suggests that the economy will be in growth again from around Q3 this year…

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The Guardian reports that ‘Ministers have been accused of leaving a “record of failure and broken promises” as internal forecasts show Britain will be 15 years late in achieving its £1tn annual export target after being hit by Brexit.’

Sterling weaker at $1.2387 and €1.1384. Oil up at $87.92. UK 10yr gilt yield up 1bp at 3.36%. World markets better yesterday & London set to open up 12 points as at 6.30am.

RETAIL WITH NICK BUBB:

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