Whitbread, CCH, Carlsberg, Travelodge, prices, cost of living & other:

A DAY IN THE LIFE:

I was thinking about the word ‘after’ yesterday and how it is widely misused.

Well, not misused, exactly, but perhaps used imprecisely because it often implies causality when there’s no real reason as to why it should.

I mean ‘he died after ingesting poison’ is understandable but it isn’t very precise.

Because he also died after having a tooth extraction five years earlier, after visiting the flower shop for Mothers’ Day and, indeed, he died after every single thing that he did up to the moment that he fell off his perch.

Furthermore, everyone sentient enough to read these words will die after reading them. Or during, of course but, as that’s not something anyone wants to think about too much, let’s drop the whole thing and move on to the news:

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PUBS & RESTAURANTS:

Weather-related supply issues:

Analysis by the Energy & Climate Intelligence Unit (ECIU) indicates UK harvests of key crops are expected to decrease by nearly a fifth this year due to unprecedented wet weather, potentially leading to higher prices for bread, beer, and biscuits.

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Staff issues:

The All-Party Parliamentary Group (APPG) for Hospitality and Tourism has launched an inquiry into the recruitment and retention of staff in the hospitality sector, seeking input from businesses and the wider industry to address staffing challenges….

Brewery closures:

The latest report from the SIBA UK Brewery Tracker indicates a challenging beginning to the year for the brewing industry across all regions of the UK, with a notable -38 net closure rate. This brings the total number of active brewers in the UK to 1777, some regions, like the East, have shown positive growth compared to the previous year, overall figures reflect a -2% drop in the total number of breweries.

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Services industry:

The CBI has reported that private sector economic activity ‘fell again in the three months to April – see Finance & Markets.

Consumer cost of living etc.:

The British Retail Consortium has reported that shop price inflation has fallen to its lowest level since 2021. CEO Helen Dickinson says prices were ‘showing signs of normalising’ after their recent rises. She says ‘food inflation slowed for the 12th consecutive month as fresh products such as butter, fish and fruits, continued to fall in price due to easing input costs and intense competition between grocers.’ Retail prices ex-food are actually down by 0.6% on a year ago. The BRC says ‘in April, non-food prices fell, especially in clothing and footwear, where retailers ramped up promotions to encourage consumer spend.’

Mitigating the other way, Sky News comments on Brexit costs for consumers when it reports that ‘border checks on food and plant imports will add billions of pounds to the cost of doing business with the European Union…’

And Rightmove provides data that allows the Guardian to report that ‘average private rents in Great Britain have risen to record highs, with annual rental growth in hotspot locations such as Reading and Coventry running at almost 20%….’

Changing spending habits.

Accountant Deloitte has reported that cost of living pressures have had an impact of consumers’ spending habits with fewer punters deciding to spend money in pubs & bars than at any time since lockdown ended. Deloitte reports that ‘the cost of living crisis and the fact that things remain more expensive than they were a year or two years ago are impacting [consumer behaviours]…’

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Consumer incomes:

Work done by the TUC suggests that pay packets are smaller than they were in 2008 in most local authority areas across the country. The TUC says this is a ‘damning indictment’ of the government’s economic record. The union body says that wages would be some £200 per week higher if they had kept the relative position that they had in 2008…

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Jobs outlook:

Search engine Adzuna has reported that job advertisement volumes slipped in March by 17% compared with the same period last year. Advertising and marketing was the most keenly impacted sector in the month of March alone, with adverts down 11% on February. Ads for trade and construction jobs were down 8.2%…..

Cost of living issues:

Three lenders Nationwide, Santander and NatWest will increase their rates for new mortgage deals from today. Several other lenders raised rates last week. Moneyfacts suggests that the average rate on a two-year fixed deal is now 5.87%, around a percentage point lower than last year’s peak.

COMPANY NEWS:

Carlsberg has this morning updated on Q1 trading saying that it has generated organic volume growth +2.0% comprising organic volume growth in Western Europe +0.2%, Asia +3.1% and Central & Eastern Europe and India (CEEI) +2.2%. Re the full year, thee company is guiding to organic operating profit growth of 1-5%….

Coca Cola HBC has this morning updated on Q1 trading saying that organic volumes were up 1.8% with reported revenue growth of 1.0%….

Domino’s Pizza Inc has reported Q1 numbers saying that LfL sales rose by 5.6%. In its Q1 earnings call, the company stressed the importance of its loyalty programme…

Punch Pubs & Co yesterday announced that it had completed the acquisition of the Milton 3 portfolio, ‘adding 24 fantastic pubs to the Burton-based, independent pub company’s 1,300-strong portfolio. It reports that the ‘pbus are located in the North East and Yorkshire’ with CEO Clive Chesser saying ‘we are delighted to have acquired these excellent pubs, and we are excited about the future as we welcome them into the Punch family.’

Christopher Marsh, former CFO of Patisserie Valerie, and three other defendants, including his wife Louise Marsh, denied involvement in a fraud scheme at the collapsed café chain. Charged by the Serious Fraud Office (SFO), they appeared at London’s Southwark Crown Court, along with Marsh’s former financial controller Pritesh Mistry and financial consultant Nilesh Lad.

Maven Leisure, a premium London bar group, is raising £2m in growth capital via Growthdeck to expand its presence in central London with new premium bars, including a landmark sports bar in Piccadilly Circus and a rooftop bar overlooking Trafalgar Square….

Cellarhead Brewing Company, a microbrewery, tap room, and bottle shop based in Kent, entered administration on April 19. The company cited financial challenges, significant increases in production costs, and a stressed market as reasons for its unviability.

CEO Tom Crowley announced that Popeyes UK has surpassed £100 million in annual sales, as the brand’s estate approaches 50 sites. Backed by TDR Capital in the UK, the fast-growing fried chicken QSR brand recently inaugurated its second Manchester location with a drive-thru on Bury New Road.

Getir has confirmed that it is to leave the UK, Europe and the US in order to focus on its core market of Turkey.

EMenu Now has announced the appointed a new investor Robert Holland FIH to the advisory board. EMenu reports ‘Robert is passionate about leveraging technology to drive growth and shape a brighter future for the next generation of hoteliers.’

WHITBREAD – FULL YEAR RESULTS:

Whitbread has this morning reported full year numbers and our comments thereon are set out below.

Headline numbers – Full Year: Whitbread has reported revenue up 13% at £2.06bn with adjusted EBITDAR of £1.057bn vs £888m (up 19%). The company reports adjusted PBT of £561m, up 36% on last year with adjusted EPS of 206.9p (2023: 162.9p). The company reports full year dividends per share up 31% at 97.0p (2023: 74.2p).

The UK: Whitbread reports that ‘Premier Inn UK: total accommodation sales [were] up 12%; RevPAR [was] up 10% with total accommodation sales 3.1pp and RevPAR £5.95 ahead of the M&E market.’ It reports that UK F&B sales were up 7% ‘driven by strong occupancy in our hotels that has supported strong breakfast sales.’ It adds that ‘UK adjusted pre-tax profit margins increased to 21.2% (FY23: 19.6%), reflecting the strength of our commercial strategy, vertically integrated operating model and cost efficiency programme.’

Germany:

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HOLIDAYS, HOTELS & LEISURE TRAVEL:

Travelodge has reported its FY numbers for the period ended 31 December 2023 to Companies House. Travelodge is the second largest hotel brand in the UK, operating in the midscale and economy (MS&E) sector of the hotel market. During the year, the company delivered a set of ‘record-breaking’ results with revenue exceeding £1bn for the first time ever and ‘significant’ growth in profitability and cash generation.

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Border Force staff at Heathrow Airport will strike for four days, starting yesterday, impacting passport checks for travellers entering the UK. The strike follows a warning from the Unite union about plans to outsource roles, with the Home Office expressing disappointment but assuring passengers of minimal disruption.

Travelodge is reported to have opened its 600th property with the arrival of 95-room unit London Oval Cricket Ground Travelodge….

Butlin’s is suing insurers led by Aviva for £60m over flooding at its Minehead resort, disputing whether the damage qualifies as a ‘storm.’ The company claims the insurers only covered £25m, arguing that a ‘named storm’ wasn’t declared by the Met Office and that high winds were absent during the rainfall.

Passengers faced long check-in delays at London Stansted Airport due to a power cut, causing disruptions in systems including check-in and security….

OTHER LEISURE:

Hipgnosis yesterday announced that it had agreed to an offer from Lyra Bidco Limited. Under the terms of the Acquisition, each Hipgnosis Shareholder will be entitled to receive $1.30 in cash.

The firm owning RUFC Worcester Warriors has changed hands once again…

The FT reports that the English Premier League ‘has taken a significant step towards introducing a hard salary cap for the first time, the latest move in a broader push across football to halt rising costs and improve club finances…’

Chinese EV company BYD has reported lower profits and sales.

FINANCE & MARKETS:

The CBI has reported that private sector economic activity ‘fell again in the three months to April’ with a weighted balance of minus 14%, compared with minus 12% in the three months to March…

Sterling up at $1.2543 and €1.1723. Oil lower at $88.24. UK 10 year gilt yield down 3bps at 4.29%. World markets better yesterday. London set to open up around 4 points as at 6.30am.

RETAIL WITH NICK BUBB:

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