Langton Capital – 2023-02-23 – Expectations, the consumer, inflation, Campari, Cineworld, Wells etc.:
Expectations, the consumer, inflation, Campari, Cineworld, Wells etc.:A DAY IN THE LIFE: Langton staff, past & present, were out in trade last night. Yeah, we all share the same surname and no, we can’t really claim it as a business expense because it was, let’s face it, a pub crawl but it was nonetheless informative for that and, we can say with some authority, there’s still some life in the on-trade in that (now painfully trendy, apparently) triangle between Finsbury Square, Old Street Station and Liverpool Street. And, although we didn’t put it to the test, not due to self-control but rather because it was referring to a Saturday, one of the boozers suggested that it was open until 4am. But the prices, really, are a bit crazy. The Google Pay app would seem to suggest that we paid £12.90 for two drinks, £26.50 for four drinks, and £20.25 for three and the rest hopefully somebody else paid for. But Pizza Union is still good value at £18.45 for three. 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 PUBS & RESTAURANTS: The consumer: Lloyds has become the latest mortgage lender to suggest that a “mortgage shock” is awaiting around 200,000 of its home loan customers. In a Sky interview, Lloyds CEO Charlie Nunn said some 10% of its mortgage customers were due to exit a fixed rate deal this year. They will have something of a financial shock when they either move to floating rates or attempt to re-fix for a further term… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Supply issues: Tesco and Aldi have joined Asda and Morrisons in introducing limits on the number of some fresh fruit & veg articles that can be bought by customers… INFLATION, COST & PRICE RISES: A very live issue: Without getting into the weeds, there are a number of debates going on. Whether to look at headline or underlying inflation, whether it is supply push or demand pull, whether anyone is ‘to blame’ and what will inflation be at the end of the year. It certainly feels like cost push at the moment but there are opposing views. Twitter is alive with suggestions at one or other end of the spectrum, e.g. ‘pay increases don’t fuel inflation – this is a Keynesian myth. The wage effect is on employment levels, not price levels.’ Is that true? When you, as an operator, put wages up do you also consider putting prices up? Or do you cut head-count? Or do you, as is likely to be the case, do both? Comments welcome. Inflation: Investment bank Citi has suggested that Britain’s headline inflation rate could fall to below 2% by the end of this year. Certainly the headline rate could ping around a bit as various external hits to the economy annualise… Food input costs. The latest CGA Prestige Foodservice Price Index reports that ‘foodservice price inflation fell slightly to 22.0%’ in the year to January from 22.9% in the year to December. This is a) indeed a fall but b) it remains a horrendously high number… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Energy costs: Hospitality bosses claim many businesses ‘won’t stay afloat’ if April’s new Energy Bills Discount Scheme is not boosted with additional support…. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. COMPANY NEWS: Italian spirits group Campari reports Q4 LfL sales up 9.6% driven by strong pricing and despite supply constraints. Net sales reached €2.7bn, up 16.4% YoY…. Domino’s Pizza Enterprises, the franchise holder for Domino’s in Australia and a host of other territories in the Far East and in Europe, has reported full year numbers saying that sales were running down around 2.2% on a same-store basis… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Wells & Co reports operating profit up £4.9m YoY to £3.3m for the year ending 2 October 2022. The pub & brewery co said it invested £3.7m into conversions of eight sites into new managed pubs, taking its total to 30. The company also announced that it has ‘multiple sites in the pipeline’ in France. The CMA has cleared the £3.5b merger of West End landlords Shaftesbury and Capital & Counties Properties (Capco), with the merger expected to complete on 6 March. The combined portfolio will amount to 2.9 million sq ft of lettable space in popular tourist destinations including Soho, Covent Garden, Carnaby Street and Chinatown. Loungers CEO Alex Reilley tweets that the ‘doors [are] now open on our 181st Lounge (& 217th site overall). Caballero Lounge has opened in The Springs, Leeds.’ North East-based My Delhi has been crowned the nation’s best street food restaurant of the year at the Nation’s Curry Awards. Scotsman Hospitality has appointed Graham Urquhart as its new Director Of Sales, reporting to Lesley Welsh, Chief Operating Officer. Company Rescue reports that Kained Holdings, owner of several of Glasgow’s most popular restaurants, has gone into liquidation. Kained was wound up by the court after being unable to pay its debts. The group ran the Oyster Bar and Lebowskis. HOLIDAYS & LEISURE TRAVEL: Parkdean Resorts has announced a major new partnership with youth charity, The Prince’s Trust. The partnership aims to create meaningful opportunities for young people across the UK seeking employment through initiatives and work experience programmes. A new holiday let management company called Yorcation has launched in York… Aquis listed Hydro Hotel Eastbourne has reported full year numbers to end-October saying that profits were down by around 7% at £337k on sales up 58%. The company reports ‘it was another challenging trading year for the Company with the ongoing Coronavirus pandemic, the cost of living crisis and the general effects of Brexit on supply sources…’ OTHER LEISURE: Cineworld shares fell by around 10% yesterday after media reports that the cinema operator had received a number of non-binding bids, but none for its UK and U.S. assets. The reports suggested that the bids did not approach the group’s $6 billion in debts… According to Sky News, live betting content provider Sports Information Services’ (SIS) has asked advisers to canvas interest in a takeover. The company’s current shareholders include Ladbrokes parent Entain Group and the founder of Betfred. Starting valuations of the company are believed to be around the £200m mark. FINANCE & MARKETS: Lloyds chief executive Charlie Nunn has told the BBC that Britain can expect to enter a shallow recession this year before the economy begins to claw back ground from 2024. He says ‘we have projected a mild recession for 2023 which we think is prudent in the current context…’ Data from the HMRC suggests that non-seasonally adjusted UK residential property deals were down by an estimated 7% year on year in January. Inflation. UKH says dealing with the root causes of inflation in next month’s Budget is “critical” if hospitality is to return to “driving economic growth.” The BCC has called on the Chancellor ‘to use his Spring Budget to relieve cost and recruitment pressures on business…’ • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Sterling weaker at $1.206 and €1.1352. Oil lower at $80.74. UK 10yr gilt yield down 2bps at 3.60%. World markets lower yesterday but London set to open around 16pts higher. 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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