Langton Capital – 2023-03-09 – More on RTN, profit v sales, labour issues, rail, delivery, Entain etc.:
More on RTN, profit v sales, labour issues, rail, delivery, Entain etc.:A DAY IN THE LIFE: Sometimes you look at something and simply think, why? It might be some crazy bubble-dress that a model is walking down a catwalk or it may be a building, a steaming great White Elephant of a bridge or, in many cases, it may be a company or one of its brands. The latter may be tired or dated or it may just never have hit the mark. Or it may have overexpanded, thought ‘one works, let’s have four hundred.’ Or it may have been overtaken by events, trends, fashions, demographics, city planners or a whole host of other factors, many of which may have been dealt with under the ‘fingers crossed and it may go away’ or the ‘if it blows up, it will be on somebody else’s watch’ styles of management at the time the units were built. However, when one finds oneself in a hole it’s best to stop digging and, though it’s often new management, maybe a third or fourth iteration thereof, that has to deal with the issues – whether it’s demolishing a building, refashioning a product line or cutting back on a brand’s footprint – that doesn’t mean that the nettle shouldn’t be grasped and, assuming all else remains the same, it’s usually the best thing to do. 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 are £395 for one subscription, £695 for multiple, £995 for very large subscribers, all plus VAT. Or sign up for easy in, easy out monthly option per subscriber HERE https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN RESTAURANT GROUP – FY ANALYSTS’ MEETING: The Restaurant Group yesterday hosted a meeting for analysts following the release of its FY numbers and our comments thereon are set out below: The numbers: RTN reports total sales of £883.0m, up from £636.6m the year prior. Adjusted EBITDA (pre-IFRS16) was £83.0m compared to £81.2m. FY22 EBITDA margin was 9.4%, down significantly from a FY19 proforma margin of c14%. PBT was £20.3m against £16.6m last year (both pre-IFRS16). Diluted EPS pre-exceptional costs is 3.3p and there is no dividend in either financial year. Trading: RTN said it has shown ‘robust trading performance in a challenging market.’ It was to continue with swingeing cuts to its Leisure…. • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. PUBS & RESTAURANTS: Labour market in hospitality. CGA and Forth have reported that ‘labour shortages at Britain’s top managed hospitality groups may be starting to ease.’ The 2023 Business Leaders’ Survey suggests that rising wage bills are still ‘piling more pressure on some fragile businesses.’ The Business Leaders’ Survey reports that ‘one in 11 roles (9%) are currently vacant and open for application.’ It says this ‘marks a drop of two percentage points since the last survey of leaders in October 2022. The rate of churn – the proportion of staff leaving a business in the last three months – has meanwhile dipped by three percentage points to 16%…’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Rail strikes. The RMT union has said that strikes on 14 train operators will still go ahead despite strikes against rail infrastructure managers Network Rail having been cancelled on 16 and 17 March. Industrial action against Rail Delivery Group are set to take place on 16, 18, 30 March and 1 April. Various observers have suggested that a resolution, whilst not definite, may be a little closer. Members of the Transport Salaried Staffs Association have voted to accept an offer by train companies already. RDG says ‘we are always open to dialogue.’ Delivery. See also comments from Restaurant Group above. Foodservice analyst Peter Backman writes that restaurant food delivery is at an ‘interesting juncture’, with the delivery market entering a slowdown at the same time as investors are demanding clear paths to profitability… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Geography: City AM reports that London businesses are the most reluctant to take on new staff in the UK due to uncertainty over recession… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Other news: Scottish Licensed Trade News reminds operators that a Scottish Government consultation on proposals to ban alcohol advertising will close on 9 March. The Scottish Alcohol Industry Partnership has produced a number of documents to help people respond to the consultation. RESTAURANT GROUP FULL YEAR – READ ACROSS POINTS: Restaurant Group specifically is dealt with above. Here we consider some of the issues that have a read-across to the rest of the sector. A ‘profits recession?’ The idea here… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. COMPANY NEWS: Manchester family brewers, JW Lees, has reopened the doors of Rain Bar ‘with a fresh new look’. It reports ‘the £700,000 redevelopment takes the Rain Bar forward and firmly positions it as a premium pub restaurant in one of the best freehold sites in Manchester, as well as creating over 20 new jobs.’ Morrison’s is reported to have ‘been haemorrhaging cash since falling into private equity hands two years ago’ per The Daily Mail. Prices were raised and footfall has fallen and the group has been lagging in most measures of supermarket performances recently. HOLIDAYS & LEISURE TRAVEL: HMRC has awarded the contract for post-Brexit border checks to French outsourcer Sodexo… The aviation regulator has ruled that Heathrow must cut fees charged to airlines by 20% from 2024 for two years… Virgin Atlantic CEO Shai Weiss was critical of Heathrow’s charge, saying ‘an average cap of £27.49 until 2026, adjusted for inflation, still penalises passengers at the world’s most expensive airport, which by its own admission, grew more than any other airport last year.’ Bristol airport has resumed operations after being forced to close on Wednesday morning due to snow on the runway. The disruption came as many parts of southern England, Wales and Scotland saw snowfall overnight and more bad weather is forecast. ACI Europe figures show that January passenger numbers were just 11% below pre-pandemic January 2019 levels. Passenger traffic across the European airport network increased by 69% in January YoY. The growth was mainly driven by an 85% rise in international passenger traffic, with domestic numbers up 35%. OTHER LEISURE: Entain has reported full year numbers to end-December 2022 saying that it has turned in a ‘strong group performance with underlying EBITDA up 13% at £993m.’ The group reports net gaming revenue up 12% with online, interestingly, down 1%… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. FINANCE & MARKETS: The British Chambers of Commerce has reported that it ‘expects UK economy to avoid a technical recession but shrink by 0.3% in 2023, before returning to growth in 2024; inflation will slow to 5% by Q4 2023. ..’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. MPC member Swati Dhingra suggests that the Bank of England risks tipping the UK economy into recession if it raises interest rates too aggressively… • Ms Dhingra says raising rates too much ‘risks unnecessarily denting output at a time when the economy is weak and deepening the pain for households when budgets are already squeezed through energy and housing costs.’ Rating agency Fitch has suggested that mortgage holders in the UK are more at risk of falling into arrears than in any other major developed country. It says ‘the UK scores the worst in terms of borrower risks…’ Sterling up at $1.1854 and €1.1232. Oil lower at $82.68. UK 10yr gilt yield down 6bps at 3.76%. World markets broadly better yesterday but London set to open down around 24pts. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. |
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