TEN, Adnams, C&C, inflation, delivery & takeaway, costs & other:

A DAY IN THE LIFE:

I’ve noticed that a couple of the clocks at home as well as one of the ones in the office say it’s half past five.

And that’s not some spooky X-files or Groundhog Day phenomenon. Rather it’s just that the batteries are giving up the ghost and gravity is doing the rest.

Which is not a problem when it’s ten o’clock in the morning or one o’clock in the afternoon because the clock’s not likely to mislead you but, if it’s 5.45pm, you’ve got a meeting, fair enough, probably down the pub and you’re clock, which is ticking gamely but doing very little else says it’s half-past five, then you might be late.

Sort of like the way the non-credible fool is harmless but the vaguely credible fool certainly isn’t. Not thinking of any particular ex-Prime Ministers there. Let’s move on to the news:

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PUBS & RESTAURANTS:

Inflation:

The ONS updates on inflation in the UK this morning saying that ‘the Consumer Prices Index (CPI) rose by 6.7% in the 12 months to August 2023, down from 6.8% in July.’ This is a slightly better result than expected. The ONS says that ‘the largest downward contributions to the monthly change…came from food, where prices rose by less in August 2023 than a year ago, and accommodation services, where prices can be volatile and fell in August 2023…’

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Consumer spending / demographics:

Regarding the consumer, former BoE chief economist Andy Haldane has said that 35 to 50 year olds are bearing the brunt of ‘supporting both the young and the old in financial and non-financial terms’….

Costs:

Brent crude oil breached the $95 threshold on Tuesday, generating concern that year end inflation figures could be dragged upwards. The RAC motoring group warned drivers were ‘in for a hard time’ at the pumps.

Delivery & takeaway:

CGA by NIQ’s Hospitality at Home Tracker reports that revenue from delivery and takeaway sales was up 6% YoY for managed restaurant groups in August, marking the third successive month of growth – though still below the rate of inflation. The tracker shows delivery sales by value were up 9% YoY with the combined volume of orders down by 2% MoM….

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Other news:

The Institute of Brewing & Distilling has announced Dr Megan Sheehy as its new President, taking on the role from Bhavya Mandanna.

COMPANY NEWS:

Brewer and pub co Adnams has reported H1 numbers to end-June saying that turnover slipped slightly, down just 0.3% but more if adjusted for inflation, to £29.99m from £30.08m last year. The company reports an operating loss of £2.5m and a loss before tax of £3.1m (2022: loss £811k).

The company reports a loss per share of 129,7p per A share and a loss of 518.6p per B share (2022: losses of 43.0p and 172.0p respectively). There is no H1 dividend. Chairman Jonathan Adnams says ‘one year on from the removal of Covid restrictions, the UK economic situation remained challenging in the first 6 months of the year with inflationary pressures continuing to persist and interest rates remaining stubbornly high.’ The numbers bear this out…

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C&C Group’s H1 update reveals that the company expects to deliver net revenue of c€870m for the six months to 31 August 2023, down c1% YoY. Operating profit  is expected to be in the range of €29-€31m and includes the significant majority of the one-off profit impact associated with Enterprise Resource Planning (ERP) system implementation disruption in the Group’s GB distribution business….

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The Restaurant Group-owned Wagamama chain is set to open a new restaurant in Northampton, in Sixfields Leisure. It says ‘our benches will soon be welcoming the local community and visitors to the shopping destination.’

Heartwood Collection has acquired two new freehold pubs, the Plough and Harrow in Long Ditton, south-west London, and the Crown in the cathedral city of Lichfield. Heartwood is targeting an estate of 60 pubs with 500 rooms by 2027 after securing £100m in funding. The company was formerly called Brasserie Bar Co and was founded by chef Raymond Blanc and Mark Derry and was acquired by Alchemy Partners in early 2022.

OneFarm has filed a notice of intention to appoint administrators. The Dutch-based company had recently acquired a 6,400 sq m vertical farm in Suffolk. OneFarm had raised £7.5m through a mixture of large investors and over 2000 retail investors through crowdfunding.

HOTELS & LEISURE TRAVEL:

Holiday costs: Tui reports that average sales prices for summer 2023 are currently up by 27% versus 2019 levels and by 8% on 2022 levels. The company had taken 13.7 million bookings for summer 2023 – up 5% YoY but still just 96% of 2019 levels. Tui said bookings for its expanded Winter 2023/24 season are up 15% YoY, with prices up 4% YoY.

TUI has also cautioned that travel dates and destinations may change due to bad weather across Europe. It said yesterday ‘we are currently seeing unusual adverse weather conditions in a small number of destinations across Europe which we know is causing concern for some of our customers due to travel.’ It adds ‘should there be any concerns about a destination then we will be in direct contact with customers with options for their holiday. This might be a change in travel date or the option to change their holiday to a different destination.’

Accor has signed two new UK hotels under its ibis and ibis Styles brands located in Coleraine and Burton-Upon-Trent respectively. The signings take Accor’s ibis portfolio in the UK to 119 hotels, 64 of which are under its ibis brand, 33 are ibis budget hotels and 22 are ibis Styles hotels.

Trustpilot reports interim EBITDA ahead of expectations at $3.4m, with positive trading momentum continuing into Q3 leading to a profit upgrade as FY23E EBITDA is now expected to be $6m, $1-2m higher than previously expected. The company said its ROW/Europe and UK segments performed strongly.

OTHER LEISURE:

Ten Entertainment has reported H1 numbers for the 26 weeks to 2 July saying that revenues were up by 3.3% at £65.3m and LfL sales growth was 1.6% (after 19% recover-from-Covid growth last year). The company reports adjusted EBITDA down 1% at £28.5m and adjusted PBT little changed at £15.8m (2022: £15.7m). TEN reports adjusted EPS of 18.0p vs 20.2p last year with a dividend up 16.7% at 3.5p (2022: 3.0p)….

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Video game developer and publisher Team17 (TM17) reports revenue up 31% to £69.7m in its H1 results. Gross profit was up 18% to £30.2m, delivering a gross profit margin of 43.3%, down from the 47.9% achieved in the comparable period in the year prior. Adjusted EBITDA fell by £1.7m to £16.5m in the six months to 30 June 2023….

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FINANCE & MARKETS:

For today’s CPI release, see Pubs & Restaurants above.

The Bank of International Settlements has cautioned that financial markets may experience stubborn inflation and a sharper economic slowdown next year than previously expected next year…

The OECD has weighed in saying that inflation in the UK will be higher than previously expected and higher than other developed countries next year while growth will be lower. It expects an average CPI rate of 7.2% this year (old forecast 6.9%) and sees growth of 0.3% this year and 0.8% next year (old forecast 1.0%).

Eurostat has reported that CPI in the Eurozone was 5.2% in the year to August.

Sterling up a touch at $1.2386 and €1.1595. Oil down at $93.51. UK 10yr gilt yield down 5bps at 4.35%. World markets heading lower yesterday and London set to open down around 21pts as at 6.30am. 

RETAIL WITH NICK BUBB:

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