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ROO, Caffe Nero, RBI, Hello Fresh, Club Med, WFH, income levels etc.:

A DAY IN THE LIFE:

Trust is a weird thing.

It’s an evolutionary advantage as it lets you get on with your life without checking every single little thing but there are drawbacks in that there will be cheats.

And the same goes for lying. Ricky Jervais covered that in the film The Invention of Lying and it’s hard not to conclude that the optimal level for lying in society is maybe not zero.

Maybe three is a place for ‘I’m sorry I couldn’t come last night.’

Or, more cynically, you may say ‘let me help you with that’ whilst backing gently away but, in looking into bear raiding specialist Hindenburg Research’s analysis of various companies, you’ve got to think that some people take mendacity just a bit too far.

The firm, named after the most famous burst balloon of all time, outed Tesla wannabe Nikola, which rolled a big truck down a hill and said it was battery powered, but my particular favourite is How A Spoon Bending Turkish Magician Build A $600m Nasdaq-Listed Scam Based On A Lifetime Of Lies.

It’s on their website, check it out.

Anyway, it being the summer, August is a bit fragmented. Langton is away next week and there won’t be an email. There’s be some chat on Twitter. We’re then back a week and then away for the Bank Holiday week at the end of the month before resuming full and uninterrupted service from September through to Christmas.

On to the news:

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DELIVEROO – CONFERENCE CALL:

Deliveroo has this morning held its H1 analysts’ meeting and our comments are set out below:

Headline numbers: Deliveroo reports revenue up 5% YoY to £1.02bn, with adjusted EBITDA of £39.4m (vs loss £51.6m). The company posted a loss for the period of £82.9m, down from £153.8m in the same period the year prior. ROO reports that profitability is ‘ahead of expectations’.

UK & Ireland: GTV growth improved sequentially from +6% YoY in Q1 to +8% YoY in Q2. ROO’s overall revenue growth of 5% was driven by UKI, with this segment seeing revenue growth of 10% to £602m. Gross profit increased 22% YoY to £229m in UKI.

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PUBS & RESTAURANTS:

Working from Home:

Research from Acas shows that 36% of employers had experienced an increase in staff working from home in 2023, with 51% saying there had been no change. Acas chief executive Susan Clews said ‘For some workers, the cost of commuting is eating into their budgets, while for others, going to their workplaces saves on home energy costs….’

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Disposable income:

Halifax is set to reduce rates by up to 0.71 percentage points from Friday, with a five-year fixed deal priced at 5.39% from 6.10%….

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On the other hand, UK Finance has reported a rising number of homeowners and landlords falling into debt arrears with their mortgages…

And some other costs are rising. Perhaps it would be odd if they weren’t with inflation recently in double figures. The BBC reports ‘motorists are paying more than ever to insure their vehicles with the industry claiming inflation and a massive rise in vehicle repair costs are to blame….’

Deposit return schemes:

The Joint Administrators to Circularity Scotland Limited, the company that was meant to oversee Scotland’s recycling deposit-return scheme, have filed their proposals including the reasons for the failure of the company. They say that glass was removed from the scheme and it was delayed and ‘at this point, it became clear that the business could not continue to operate without further funding….’

Other news:

Scottish Licensed Trade News reports that demand for pubs  in suburban and village locations remains strong in 2023, with city centre venues also ‘bouncing back’. Star Pubs & Bars operations director for Scotland, Matthew Dyson, said suburban and village pubs have ‘performed particularly well coming out of the pandemic’ as customers looked to socialise closer to home as well as work from home.

Lumina Intelligence has reported that the convenience market in the UK is forecast to achieve growth of +4.1% in 2023F, to reach a revenue of £47.1bn…

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COMPANY NEWS:

Caffè Nero reports Q4 sales at 112% of 2019 pre-Covid levels, opening 23 new stores during the quarter, 7 of which were in the UK. The company completed 200 refurbishments in the last 12 months, with 140 of these being UK locations, and plans to refurb a further 180 stores in the next financial year….

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Restaurant Brands International reported  total $10.9bn group sales earned in Q2, with Tim Hortons driving performance with sales up 15% YoY to $2bn and Burger King the biggest contributor with sales up 14% to $6.9bn. RBI surpassed 30,000 stores globally during Q2, opening 42 net new Tim Hortons with the coffee chain reaching 5,662 outlets globally.

US bakery Cinnabon is set to open in Newcastle in a site on Grainger Street with capacity to accommodate nearly 30 customers dining in.

HelloFresh has reported Q2 numbers and said that it expects growth to pick up again in H2 this year. Quarterly adjusted core EBITDA rose to €191.9 million, from €145.9 million a year ago. This was at the upper end of its previously forecast range of €185 million to €195 million….

Leon, which is owned by Mohsin & Zuber Issa’s EG Group, has reported somewhat dated numbers to Companies House in which it says that revenues came in at £37.5m in 2021, up from the prior year but still down on 2019 with office locations slow to recover.

Majestic Wines has partnered with Uber Eats to push its on-demand delivery service. Customers should be able to organise deliveries in as little as 20 minutes.

Wendy’s UK is reported set to be operating some 40 sites by the end of this year. CFO Gunther Plosch said at the group’s Q2 numbers that ‘we’re really happy with the progress we are making [in the UK]. He adds ‘in the second quarter, we improved profitability by about 500 basis points…unfortunately we have catch-up accounting on expenses from the prior year that’s depressed our profitability.’

Wilko collapsed into administration yesterday, placing 12,000 jobs at risk…

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HOTELS & LEISURE TRAVEL:

Club Med has reported a sharp rise in late bookings as wet weather in the UK has led Brits to book holidays overseas. The company saw a 146% sales increase during the week starting July 24, for departures in August and September.

CWT and GBTA’s 2024 Global Business Travel Forecast claims that air fares, hotel rates and car rental costs are all set to continue rising throughout the rest of 2023 and in 2024 but the scale of increases is likely to be ‘more moderate….’

The ADR for hotels , which went up by 29.8% to $161 in 2022, is expected to rise by 4.3% this year to $168. Richard Johnson, from CWT Solutions Group, added ‘The percentage rises were phenomenal last year but the good news for the next 18 months is that we shouldn’t expect anything like that type of spike.’

Car rental company Sixt reported revenue up 24.4% YoY to €925.1m with consolidated earnings before taxes (EBT) rising to a record level of €131.9m. Sixt’s fleet size increased 24.6% YoY to reach a record 166,300 rental vehicles, with rental prices well above 2019 levels. Europe (excluding Germany) accounted for 39.9% of consolidated revenue, while Germany accounted for 30.6% and the North America segment accounted for 29.5%.

OTHER LEISURE:

Gravity Max has opened in Liverpool ONE, featuring a mix of immersive entertainment, including go-karting, bowling, mini golf, live music, live sport, as well as food and drink. The venue is Gravity Max’s third in the UK and has capacity for 2,500 people.

Disney is to raise the price of its Disney Plus subscription service to $13.99 per month in the US, a 27pc increase. The streaming service more than halved its losses to $512m in its financial Q1, down from over $1bn in the same period last year.

FINANCE & MARKETS:

The US Labor Department yesterday reported that CPI in the Us rose slightly to 3.2% in the year to July from 3.0% in the year to June.

Sterling weaker at $1.2682 and €1.1541. Oil a shade lower at $86.31. UK 10yr gilt yield down 1bp at 4.37%. World markets broadly higher yesterday but London set to open down around 38 points as at 6.30am.

RETAIL WITH NICK BUBB:

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