Langton Capital – 2023-04-18 – City Pub Co, Entain, Cineworld, Sportech, labour costs & other:
City Pub Co, Entain, Cineworld, Sportech, labour costs & other:A DAY IN THE LIFE: It being the North of England, we paid £10.80 last week for two pints of bitter and a half-pint. And very nice it was too but, on deciding that the dog-walk had featured enough alcohol, we popped into a branded coffee shop next and paid £11.70 for three coffees, which was rather hurtful. So there are a range of options. Either a) coffee is too expensive or b) beer is too cheap or c) I’m hopelessly out of touch and they’re both the right price or d) some combination of the above is appropriate. Of course market purists would have it that competition will be dragged in and costs will expand to make the returns on capital broadly equivalent even if the trading profit on one product is 85% plus and on the other, in a tenanted house at least, it’s nearer 50%. Anyway, shock though it was, I’m nearly over it. 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 CITY PUB GROUP FULL YEAR NUMBERS: City Pub Group has this morning reported full year numbers and our comments thereon are set out below: Headline numbers: CPC reports that revenue rose by 63% to £57.8m with adjusted EBITDA of £8.0m pre-IFRS16 (2021: £3.8m). The adjusted profit for the year (pre-IFRS16) is £3.8m against £1.0m in the prior year. The current valuation of the estate is estimated to be £150m, equivalent to 150p per share. Balance sheet & new openings: CPC reports that it has completed the estate refurbishment programme and acquired two pubs since the interim results announcement in September 2022. It says its balance sheet has been ‘strengthened… • 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: Cost & prices: Foodservice analyst Peter Backman points out that pricing consultancy Pearson Ham has shown that prices paid in February for food by pubs increased almost three times as fast as their menu prices…. Labour costs & wage growth: The ONS has this morning reported that the growth in employees’ average total pay (including bonuses) was 5.9% and growth in regular pay (excluding bonuses) was 6.6% in December 2022 to February 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. Wider economy: Less gloomy. The EY Item club suggests that the UK economy is now expected to avoid both a technical recession and a calendar year contraction in 2023. The IMF, which has tended to aim low, has it that the UK will contract by 0.3% this year… • 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. Footfall: Springboard reports that for the week ended 15 April footfall at retail parks was down 8.1% compared to the same week pre-pandemic. Easter has skewed numbers… Sector revenues: Lumina Intelligence’s Operator Data Index Quarterly Download forecasts that the UK restaurant market will generate revenues of £18.1bn in 2023, 94% of its 2019 sales… • 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. Cash: Deputy governor of the Bank of England Sir Jon Cunliffe has warned that cash is set to become “less useable” as shoppers move to plastic and the internet. In what will be a shock to few people, he says that it could actually become harder to spend physical money in the future… Other news: The Scotch Whisky Association (SWA) is urging the UK government to uphold the pledge made in 2019 to ‘ensure the tax system is supporting Scottish whisky’ as a rise in duty looms. MGN events reports that the UK’s favourite cocktail is the Margarita, according to analysis of Google search data. Professor Chris Elliott, chair of the inquiry into the horsemeat scandal in 2013 , warns that the UK is isolated from intelligence over food supply chains in Europe, increasing the risk of new scandals. Uber Eats has this week introduced the option for customers in Central London to order their takeaway in reusable containers and easily return them in a move that should reduce the use of single use packaging. The trial will run for six months… • 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. US supply chain issues are reported to be easing according to the Datum FS Foodservice Supply Chain Stress Index. But the Index suggests that, whilst some pressures have eased, the labour squeeze has not. COMPANY NEWS: Gino D’Acampo has launched his new flagship restaurant in the newly refurbished Marriott Hotel on Boar Lane, Leeds. The MA reports that Alphabet Brewing Company (ABC) ceased trading on 14 April after almost 10 years of operation. A spokesperson for the Manchester-based brewery said ‘We’d like to thank everyone who drank a Juice Springsteen, popped down to the taproom and supported us.’ The Times reports that Asda is working with self-driving car AI developer Wayve on a year-long trial that will see Asda vans swapped for driverless Jaguar I-Pace electric cars to deliver shopping from Asda Park Royal in west London. Red Oak Taverns has acquired the Crown, Bredbury near Stockport directly from owners, Olwen and Peter Davies who are retiring. It reports ‘the Crown is a proper community pub and very popular with Manchester City fans.’ HOLIDAYS & LEISURE TRAVEL: Belgravia Investment Group Ltd is redeveloping 1 Old Eldon Square in Newcastle into 13 serviced aparthotels. The company says designs have considered sensitivities surrounding the building’s history and unique location in the heart of the city. OTHER LEISURE: Entain has reported Q1 numbers saying that it has made a ‘strong start to 2023 with Q1 Group Net Gaming Revenue up +15%’ or +11% in constant currency terms. CEO Jette Nygaard-Andersen says ‘2023 is off to a strong start, with continuing underlying momentum across our operations around the world…’ • 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. Cineworld has further updated on its Chapter 11 progress saying that it is terminating the marketing process for its ‘Rest of World’ business (outside of the United States, the United Kingdom and Ireland)… • 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. Sky News reports that the value of Manchester United fell following a report the controversial Glazer family would remain owners of the club. The share price fell by 13% after reports on ESPN that owners and co-chairmen Joel and Avram Glazer are confident they will secure investment to enable them to retain ownership of the club. Betting technology company Sportech has reported full year numbers saying that revenue rose to £26.0m from £22.9m last year. The adjusted loss before tax is £99k, down from a loss of £3.3m last year… Sega Sammy, the Sonic the Hedgehog creator, has agreed to acquire Angry Birds creator Rovio Entertainment for £625m. Haruki Satomi, president and CEO of Sega Sammy, said ‘the mobile gaming market has especially high potential, and it has been Sega’s long-term goal to accelerate its expansion in this field.’ FINANCE & MARKETS: The ONS reports that the unemployment rate ‘was estimated at 3.8% [in the quarter to Feb 23], 0.1 percentage points higher than the previous three-month period and 0.2 percentage points below pre-pandemic levels….’ Estate agent Hampton’s reports that nearly half a million landlords are expected to sell their rental assets in the next five years to fund retirement…. The Chinese economy grew by a faster than expected 4.5% year on year in Q1. Sterling mixed at $1.2381 and €1.1320. Oil lower at $84.92. UK 10yr gilt yield up 5bps at 3.70%. World markets mixed yesterday & London set to open up around 16 pts as at 6.30am. 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. 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