Marston’s, delivery, Scotland, Planet Organic, Rekom, Chopstix etc.:

A DAY IN THE LIFE:

It might well simply be a feature of the differing lengths of the months but, whilst February finished abruptly and was gone before it had really got going, it feels as though March has been the opposite in that it’s dragging itself out to the last possible minute.

And the month ending on a Friday does make it seem a little longer because, effectively, it’s been hanging around all week.

Anyway, it is what it is and, with the week, the month and the quarter all ending on the same day, let’s hope we’re in for some good luck. Have a great weekend and let’s move on to the news:

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MARSTON’S – DEBT EXTENSION & BRIEF TRADING UPDATE:

Marston’s has announced an extension to its banking facilities and our comments thereon are set out below:

Bank facility:

• Marston’s reports an extension of its bank facilities to end-January 2025 (from 2024).

• Banks (and borrowers) are unprepared at present to enter into longer deals but the extension nonetheless reassures

• The company further announces that the facility has been increased from £280m (with a £40m private placement) to £300m, also with a £40m private placement

• Two new banks have joined the syndicate

• The coupon, which is variable, is not mentioned but, as it will be linked to SONIA, it will be higher that it was prior to the recent round of Bank of England interest rate rises

• Some £120m of the facility is hedged

• The majority of Marston’s funding remains attached to its securitisation. This is long dated and secure

Interpretation:

• The extension to the facilities should reassure.

• It shows there is still access to capital and that banks are willing to partner for a longer period

• The increase in the facility provides flexibility and the inclusion of two new banks into the syndicate adds comfort that covenant issues (which are common across the sector) should be short-dated

• We believe that the enhanced facility should give Marston’s the option, should it wish to do so, of retiring some of its securitisation debt at some point in the future

Other comment:

• Marston’s updates very briefly on trading, saying ‘the Group continues to make progress on its “Back to a Billion” strategy and trading remains in line with our expectations.

• H1 numbers will be announced on 16 May 2023.

Langton Comment:

• The extension to MARS’ facilities is helpful and reassuring.

• Trading is in line & the company will update much more fully in six weeks or so.

• The market for the entire sector remains challenging and difficult to read but we believe that MARS is generating cash and cutting debt.

• Would-be shareholders may be cautious in their approach to consumer stocks in general but, when a degree of discrimination between one consumer stock and another returns, Marston’s, with its predominantly freehold estate, strong asset backing and secure financing, is well-positioned to prosper.

PUBS & RESTAURANTS:

Delivery:

Lumina Intelligence’s Foodservice Delivery Report 2023 ‘indicate a robust growth trajectory for the UK food delivery market, driven by branded fast food, restaurants, and pubs.’ The report suggests that the UK Foodservice Delivery market will grow by +7.8% this calendar year and reach a value of £14.4 billion in 2023…

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Scotland:

UKH Scotland has said that the new first minister north of the border should ‘reset and repair’ the relationship with the Scottish hospitality industry…

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For comments on Wales, see tourist tax comments under holidays below.

Business confidence:

The latest Lloyds Bank business barometer suggests that business confidence has risen to its highest level in ten months. it reports that companies have become increasingly optimistic about filling staff vacancies. There has been an easing of wage demands.

COMPANY NEWS:

Sky reports that grocery chain Planet Organic filed a notice of intention to appoint administrators on Thursday. It says this is a move which provides it with breathing space from creditors as it continues rescue talks…

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Nightlife company Rekom reports strong trading for its 2022, with Rekom UK generating 38% of total group revenue at £97.8m vs £65.8m the year prior. UK EBITDA reached £18.4m, compared to £16.6m in 2021 with its estate growing from 42 to 52 venues throughout the year.

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Chopstix Group plans to open 30 venues this year, adding to the 26 restaurants it opened in 2022. The group began 2023 with the acquisition of Chozen Noodle in a deal that included 27 motorway service area sites…

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Timothy Taylor is to release its first canned beer. It says its 4% ABV Hopical Storm in a can ‘reinforces its uncompromising approach to quality and consistency by providing an additional packaging format that suits the brand and opens up availability to a younger, legal-drinking age audience.’

Gusto Italian has  launched its new Spring/Summer menu this month with emphasis on meat-free menu items and mindful drinking options. Research has indicated that, compared to the wider population, Gusto Italian diners over-index towards dining trends including ethical and sustainability conscious, healthy eating, vegetarian and flexitarian.

HOLIDAYS & LEISURE TRAVEL

On the Beach Group plc has today announced the appointment of Jon Wormald as Group Chief Financial Officer. It says ‘Jon will join On the Beach and the Board on 30 June 2023, at which point the Group’s previously announced CEO Succession Plan will be enacted….’

Whitbread’s latest Hub by Premier Inn opened on Wednesday on Farringdon Road in Clerkenwell.

Last-ditch pay talks yesterday aimed at averting a 10-day strike by security staff at Heathrow failed last night and Easter disruption is on the cards. The Unite union confirmed that the 10 days of action will go ahead as planned from today (Friday)…

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Luckin Coffee has signed a strategic partnership with IHG Hotels which will see Holiday Inn Express hotels across China offer guests a complimentary Luckin Coffee takeaway coffee.  IHG Hotels operates 278 Holiday Inn Express hotels across China.

The Welsh government plans to push ahead with plans for a visitor levy on tourists despite acknowledging objections from the tourism industry. No rate has been set but the government said that in international models the levy ranges from 50p to £5 a night. The response from hospitality bodies…

OTHER LEISURE:

Tax Policy Associates reports that Premier League football clubs may have avoided paying £250m in tax over a three-year period due to agents being paid to represent both players and clubs in negotiations. HMRC said it was investigating ‘a number of clubs’.

FINANCE & MARKETS:

A survey by World Values Survey has found that people in Britain now have more confidence in the EU than they do in their own UK parliament…

Sterling up at $1.2396 and €1.1365. Oil higher at $79.08. UK 10yr gilt yield up 4bps at 3.50%. World markets better yesterday. London set to open little-changed as at 6.30am.

RETAIL WITH NICK BUBB:

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