JD Wetherspoon Q3, Compass, Comptoir, TUI, Airbnb & other:

A DAY IN THE LIFE:

One of the abiding questions of our time, up there with the inquiry as to what is the purpose of the Universe related in The Hitchhiker’s Guide, is ‘what did the squirrel do with his nuts?’

And a good question it is too but, if like us you have upward of what seems like 1,000 hazel trees growing up through your grass and in what you might in your more deluded moments call your flower beds, it’s one that has a pretty definitive answer because, unless there’s some sort of immaculate conception going on out there in the arboreal world, most of the nuts in the north of England have been buried in our garden.

So that’s one question answered, on to the next.

And, whilst we ponder that, here’s the news:

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JD WETHERSPOON – Q3 TRADING UPDATE:

JD Wetherspoon has today updated on Q3 trading and our comments are set out below:

Headline numbers: JDW reports that LfL ‘sales increased by 9.1% in the 13 weeks to 30 April 2023, compared to the same period in the last full financial year before the pandemic’ (i.e. the year to July 2019. It adds that year to date sales are up 6.4% compared to the same year. JDW says that ‘sales in Easter week were the highest-ever for the company – and sales in the current financial year are likely to be a record.’ It says that, compared to last year (July 22), LfL sales ‘increased by 12.2% in the third quarter and by 12.7% YTD.’ The company reports that the first May bank holiday ‘was exceptionally strong, including our busiest-ever Saturday’. Re the coronation, this was ‘slightly less strong, with a noticeably quiet Saturday, possibly benefitting sales in the off-trade (mainly supermarkets) more than the on-trade (mainly pubs, clubs and restaurants).’

Cashflow, balance sheet, capital spend: JDW reports that ‘in the last quarter, the company opened one pub (YTD 3 pubs) and sold, closed or…

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THE ECONOMIC IMPACT OF THE CORONATION:

Summary: Contextualising the issue. It’s a one off and it’s over. The weather, sporting events, train strikes and the state of the economy are a) bigger and b) enduring issues. Re the coronation. It was not a major positive for those operators who ‘benefitted’ and it was quite a substantial negative for some other players.

Saturday: Neutral to negative for most leisure operators outside of pubs & restaurants (and some London hotels). The day was a car crash for restaurants. They swapped what could have been a busy Saturday for something like a poor Monday’s business – particularly during daylight hours.

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PUBS & RESTAURANTS:

Consumer squeeze:

Which? estimates that 700k households missed or defaulted on a rent or mortgage payment last month. Missed housing payments were ‘particularly high’ among renters…

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On the other hand, Paul Martin of KPMG has highlighted that ‘consumer demand has so far been fairly resilient to the twin drags of high inflation and high interest rates…’

Footfall:

Springboard reports that last week was an exceptional week in that it ‘was bookended by bank holidays, which meant that footfall across UK retail destinations remained virtually flat from the week before.’ It was up just 3% week-on-week.

Worth remembering that there is a further rail strike this Friday (12th). This will be negative for footfall.

Prices & Costs:

Sainsbury’s has cut the price of its own brand butter and bread as wholesale  food prices have been falling globally. The supermarket chain said ‘Whenever we are paying less for the products we buy from our suppliers, we will pass those savings on to customers’.

WFH etc:

Startups.co.uk comments that ‘the traditional 9-5 is dead’ and it adds that ‘four in five UK businesses now believe flexible working is critical to success.’ It says that ‘moving away from strict rules around ‘clocking in’, they are letting staff plan their work around their personal commitments – not the other way around….’

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Other news:

Bolton Council have begun consultation on introducing the Late Night Levy with a proposal to introduce the Levy on 1 January 2024. The annual levy fee ranges from £299 a year for smaller businesses to £4,449 for larger businesses which are used exclusively or primarily for the sale of alcohol. The consultation period will end on 18 June 2023.

Accountant BDO has updated on business optimism saying that the UK’s business leaders are the most upbeat about the outlook for their firms since before the government’s disastrous mini-budget last September. Business leaders say that the economy has been more resilient than they had feared with the UK managing to avoid recession.

COMPANY NEWS:

Compass Group has reported H1 numbers saying that revenues rose by 24.7% to £15.8bn with operating profits up 41.1% to £1.05bn and EPS up by 42.8% at 42.7p. The company will pay an interim dividend of 15.0p (2022: 9.4p). The group is raising its outlook for FY23…

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Comptoir has reported FY numbers to 1 Jan 2023 saying that group revenue rose by 49.7% to £31.0m. Adjusted EBITDA was £6.3m (prior year £6.4m) and basic EPS was 0.48p (prior year 1.34p). The group was net cash positive to the tune of £7.7m at the year end…

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Brew By Numbers and Brick Brewery have indicated intentions to call in the administrators reports Just Drinks. Should the South London breweries fail to find a solution during the administrations then they will join the 36 breweries that have already closed in the UK this year, equal to approximately two per week.

Jamie Oliver’s new UK restaurant will be a more ‘premium’ venture than Jamie’s Italian according to CEO of the Jamie Oliver Group Kevin Styles. He did not confirm whether the concept would be spun out into a chain but said the launch was part of a five-year plan for the business.

Greggs has opened its first airport site in partnership with SSP, located in Cardiff…

HOLIDAYS & LEISURE TRAVEL:

TUI has reported H1 numbers saying that underlying EBIT came in at a seasonal loss of €242.4m ‘delivering a strong improvement year-on-year (Q2 2022: €-329.9m) with the strong booking momentum continuing into the Summer seasons..’

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The latest UNWTO world tourism barometer has found that international tourism is ‘well on its way’ to returning to pre-Covid levels, now at 80% of pre-pandemic levels in the January to March period with an estimated 235 million tourists travelling….

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Eurocontrol figures show that total flights in April reached 90% of 2019 levels and rose further to 92% for the week from 26 April to 2 May, up 7% YoY. The UK continues to be Europe’s leading aviation market with average daily flights of 5,311, followed by Spain (4,798 services), Germany (4,677) and France (4,011).

Airbnb Inc has updates on earnings & the business outlook saying that bookings are likely to fall with rates also likely to slide in its Q2. The company’s shares fell more than 10% in after-hours trading….

OTHER LEISURE:

Warner Music Group has reported Q2 profits down by 63 per cent to $34 million after exceptional costs caused by layoffs. Sales were up by 2 per cent to $1.4 billion in the three months to March 31.

FINANCE & MARKETS:

The Halifax Building Society yesterday reported that house prices fell by 0.3% month-on-month in April to leave them up by only 0.1% year-on-year. This is the lowest rate in a decade and is down from the year-figure of 1.6% to March…

House marketing agent and former high-flyer Purplebricks, whose shares have fallen by around 98% from their highs, managed to lose another c60% yesterday as the company announced that it had cash problems and somewhat ominously said it would need to ‘conclude the Strategic Review and the Formal Sale Process promptly.’

Insolvency and restructuring trade body R3 has reported that London has seen a Q1 startup ‘boom’ with over 70,000 new businesses launched during the period in region. Startups in London are up by 13.9 per cent in Q1 2023 vs the same quarter last year.

A bit of a pile-on. Make.uk has said that flip-flopping…

Sterling up at $1.2619 and €1.1502. Oil price higher at $76.98. UK 10yr gilt yield up 10bps at 3.86%. World markets weaker yesterday but London set to open up around 7pts as at 6.30am.

RETAIL WITH NICK BUBB:

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