RTN H1 meeting, Jet2, food costs, veggie, demographics, experiential etc.:

A DAY IN THE LIFE:

What kind of a job is ‘influencer’?

I mean, really?

I can just about get my head around the idea of somebody unboxing and reviewing tech products on YouTube and getting a name for themselves. But much of the other stuff just seems to be a sort of FOMO generating machine where virtually everyone ends up the poorer – financially or emotionally – except for the social media company, which ends up with a nice list of pliable viewers and access to many of their most personal details, and the ‘talent’.

But I have to accept that it doesn’t really matter what I think.

A ban isn’t coming any time soon and nor can I see there being a Chartered Institute of Influencers this century complete with crest, Royal Charter, EC2 offices and a series of exams.

Anyway, the weather’s boiling out there, the kids must be back at school. On to the news:

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RESTAURANT GROUP H1 NUMBERS:

The Restaurant Group yesterday held its H1 analysts’ meeting and our comments thereon are set out below:

Headline numbers/comments: Total revenue is up 10% YoY to £467.4m, with adjusted EBITDA up 15% to £36.3m and PBT flipping positive to £7.2m from -£0.1m in H1’22 (prior year VAT benefit adjusted out). Management said the EBITDA growth was driven by RTN’s strong sales performance in its Wagamama, Pubs and Concessions businesses and tight cost management. EBITDA margin increased to 7.8% from 7.4% and operating margin increased to 4.3% from 3.0%.

There has been a moderate increase in managements FY23 EBITDA expectations. RTN said it continues to actively explore strategic options to further accelerate margin accretion and deleveraging.

Wagamama: Revenue…

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PUBS & RESTAURANTS:

Food input costs:

The CGA Prestige Foodservice Price Index has suggested that food inflation in hospitality slowed slightly in July as retail prices began to fall. It says that food inflation ‘fell marginally to 21.7% year-on-year in July’ but it adds that ‘despite the slight fall of 0.9 percentage points, inflation remains only just below the Index’s previous peak of 22.9% in December 2022.’ The Index adds that its numbers showed ‘a month-on-month increase of 0.7%—in contrast to supermarkets, where prices fell by 0.4% between June and July….’

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Trends:

Interesting to note that, in the USA, Veggie Grill has closed nearly half its stores to protect its future on the back of shifting demographics post-pandemic. The company says that diners are still interested in plant-based fare but presumably not as much as they were or not as much as the company hoped they would be…

The economy:

The British Chambers of Commerce has said that, whilst the UK could still dodge a technical recession, the economy was likely to ‘flatline’ against a backdrop of higher interest rates and the cost of living crisis…

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Cost of living crisis:

The Resolution Foundation reports that mortgage holders will pay £3,000 more in repayments next year as rising interest rates deliver a £17bn blow to homeowners. The think tank estimates that  hundreds of thousands of mortgage holders will be moving off old fixed-rate deals and onto higher ones over the next year.

Every little hurts. The Royal Mail will increase the price of a first-class UK stamp by 15p in October, the third increase in 18 months. From 2 October a first-class stamp will cost £1.25 – 47% more than in March last year.

Energy. Investec has warned that the ‘era of cheap energy is over.’ It says household bills are set to remain much higher than they were before the PUB (Pandemic / Ukraine / Brexit) era. Much the same could arguably be said of food prices, interest rates and labour availability and costs.

Demographics:

The Resolution Foundation reports that younger households, which tend to have mortgage debt and lower cash savings, will be negatively impacted by rises in interest rates. It says that, whilst savers as a group will receive £90bn in 2024-25, up from just £5bn in 2021-22, this will be predominantly taken by older consumers…

Elsewhere, ONS figures show some students are skipping meals, taking on debt or dipping into savings as the cost of living crisis impacted consumer behaviour….

Upcoming results:

A busy month in October with either numbers or updates from, amongst others, JDW, MARS, RBG, WTB, MAB and Punch’s Bond Report. City Pub Group and Tortilla will report in September.

Staff tipping:

Research by payments company Dojo has suggested that the average value for tips across the country has fallen to £5.60 per transaction, down 7% on last year….

COMPANY NEWS:

Comptoir Group has announced that it has secured a location in Ealing, West London, to open a new Comptoir Libanais in early October…

Naked Wines has announced that its delayed figures should be produced at the latest by 19 September.

Pocket Planet has announced a new experiential attraction will be built on Oxford Street featuring small scale, but very large model landscapes of UK landmarks, London itself and a selection of scenes from around the world….

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AB InBev said in its Q2 earnings call that ‘approximately 80% are favourable or neutral’ towards its Bud Light brand after the brand saw a drop in sales when it became a victim of a culture skirmish….

The MCA reports that North West brewer and pub operator Hydes will take a slow and steady approach to growth as it returns to the expansion trail with its first acquisition in five years. MD Adam Mayers has announced that the company will invest £3.6m into a new site in Heswall, on the Wirral, Merseyside, set to open later this year.

B&M has acquired 51 Wilko shops for £13m, with the stores set to be rebranded as B&M. The retailer did not acquire Wilko’s brand name or any of its intellectual property.

HOTELS & LEISURE TRAVEL:

Jet2 trading update:

Jet2 has updated on trading ahead of its AGM later today saying ‘summer 2023 on sale seat capacity at 15.26m seats, has remained largely consistent with that reported at our Preliminary Results…and is 7.3% higher than Summer 2022.’ It says there has been a ‘small reduction in capacity primarily a result of the recent Rhodes wildfires.’

Jet2 says ‘the months of July and August experienced strong late booking momentum with September currently showing a similar trend and average load factors now 0.5ppts behind Summer 2022 at the same point (at 6 July 2023: 0.8ppts behind). Pleasingly, the mix of higher margin Package Holiday customers represents 71.7% of total departing passengers at present and is 4.8ppts higher than Summer 2022….’

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Venice will begin charging all day-trip visitors aged over 14 a €5 entry fee from next year as the city looks to tackle its over-tourism issues. The fee will be first applied on a trial basis for 30 days.

New regulations in New York have led to a drop in Airbnb bookings. Under the new system, short rentals (under 30 days) are only allowed if hosts registers the property and remains physically in it while guests are present.

France’s new taxe d’habitation, a residence tax, is set to hit Britons with second homes in the country as the French government ramps up property taxes for owners of holiday homes in popular tourist areas. The tax could see a surcharge of between 5-60% applied in 2024.

WH Smith reports sales in its travel arm jumped 42% higher over the year to 31 August, up 27% on a LfL basis. The company welcomed the ongoing rebound in travel worldwide, with H2 comparable travel sales up 15% compared to high street sales which were up just 1%.

IATA has reported that airline passenger traffic in July was back to 95.6% of pre-Covid levels with traffic up 26.2% compared to July 2022.

OTHER LEISURE:

Playtech has reported H1 numbers saying that revenue rose by 8% to €860m with adjusted EBITDA up 10% at €219.9m. The group reports adjusted diluted EPS of 27.5c vs 30.sc last year. CEO Mor Weizer says ‘our success in the period was driven by our diversified portfolio, spanning B2B and B2C.’ He says ‘we have started the second half of the year well and are on track to deliver FY23 Adjusted EBITDA slightly ahead of current expectations.’

Manchester United shares fell sharply (by around 18%) in New York as the suggestion that current owners the Glazer family had ceased marketing the company for sale continued to circulate.

The Telegraph reports that Meta is ending its Community News project in the UK, France and Germany – a feature spearheaded by Sir Nick Clegg who is widely seen as Meta founder Mark Zuckerberg’s right-hand man. The company is instead said to be focusing on short-form video in a bid to compete with TikTok.

Google celebrated the 25th anniversary of its launch this week, a period in which it has cemented itself as the go-to search engine of the internet.

FINANCE & MARKETS:

Bank of England governor Andrew Bailey has said that the Bank is close to the end of its monetary tightening cycle. The Bank is certainly nearer the end than it was a year ago. City AM, in its print edition, says that the governor’s comments are ‘as clear as mud’…

China’s exports have fallen in August for fourth month in a row. Exports were down by 8.8% in August compared with 2022 and imports dropped 7.3% per official figures.

Halifax has reported that house prices fell in the year to August by 4.6%. Prices fell by 1.9% in the month of August…

Sterling weaker at $1.2496 and €1.1654. Oil up at $90.33. UK 10yr gilt yield up 3bps at 4.54%. World markets weaker yesterday and London set to open down around 21pts as at 6.30am.

RETAIL WITH NICK BUBB:

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