MARS H1, VARE, RBG, Flutter, GRG, OTB, Pizza Pilgrims, income & other:

A DAY IN THE LIFE:

I don’t know how much rubbish, twigs stuck to her fur, lengths of bramble, mud, leaves, old toys and the odd bone, etc, that our dog has dragged into the house but let’s say it’s a metric tonne.

Alright, it’s probably less because even our pooch, who’s only two, doesn’t bring in a kilo and a half a day but, whatever it is, it’s material.

And especially so when considered to the weight of rubbish that she’s taken back outside because that approximates to zero meaning that everything that she’s ever brought into the house would still be here if we hadn’t done something about it.

Anyway, more fine weather yesterday before a spot or two of rain tomorrow. Music to the ears of hot food & drink vendors, indoor entertainment providers and the like but, to the rest of us, maybe not so much. On to the news.

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MARSTON’S H1 NUMBERS

Marston’s has reported H1 numbers this morning and our comments thereon are set out below:

Headline numbers: Marston’s reports total revenue in H1 of £428.1m, up from £407.0m last year. Pub operating profit is up 22% at £52.7m. The company reports a small loss before tax of £0.8m (2023: loss £3.6m) with the loss per share reduced to 0.1p from 0.5p last year. There is no dividend (as expected) and the company confirms that its NAV is currently around 95p per share. The company updated in January on Q1 (including Christmas) trading saying that a strong performance had ‘driven LFL sales growth in the year to date of +8.1%.’

Financial performance: MARS reports that LfL sales growth of 7.3% was ahead of the market and points to its increased pub operating margin at 12.3% against 10.6% last year. The underlying share of CMBC’s profit/(loss) was a loss of £(0.6)m (H1 FY2023: £2.2m) ‘reflecting CMBC’s accelerated investment in brands’. MARS reports the CMBC H1 FY2024 dividend received was £13.8m (H1 FY2023: £10.6m).

Cash, debt & assets: MARS reports a continued ‘focus on cash generation [and] debt reduction’ and points to an extension of its bank funding totalling £340m. The company reports operating cash inflow of £90.9m and says it has made ‘continued progress with debt reduction strategy.’ It says its ‘net debt excluding IFRS 16 lease liabilities reduced by £24.5m during H1 FY2024 to £1,160.9m (FY2023: £1,185.4m).’

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PUBS & RESTAURANTS:

Customer incomes, employer costs:

Wages in the UK have experienced their fastest growth in 16 years over the past 12 months according to the Resolution Foundation, outpacing inflation and providing relief for workers. Real earnings increased by c2% in the year to February, however, this growth comes amid a productivity crisis, with output per worker declining, posing challenges for businesses and potentially leading to inflationary pressures and prolonged higher interest rates….

• Referring to the productivity problem, Gregory Thwaites, economist at the Resolution Foundation, alludes to inflation when he says ‘this means that what British workers can buy with their wages is rising just as the amount they produce in their jobs is actually shrinking.’ He adds that ‘the positive side to this wage growth is that it has protected household incomes, but it may worry the Bank of England because real wages are rising faster than productivity per worker.’

Business confidence:

CGA has updated on confidence across hospitality and suggests that ‘Britain’s hospitality leaders remain cautious amid tentative signs of improved consumer spending and relief on some costs’. CGA reports that ‘34% of leaders feel confident about prospects for the hospitality market over the next 12 months—down by seven percentage points from February figure of 41%….’

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Business rates:

Per MA, managing director of Star Pubs & Bars Lawson Mountstevens has called for clarity on business rates, stating that the current ambiguity creates challenges for pubs and other businesses. Despite ongoing challenges, Mountstevens notes the resilience of the pub industry and reports strong performance in both lettings and capital expenditure, indicating positive momentum for Star Pubs & Bars.

COMPANY NEWS:

Revolution Bars has updated on its restructuring plans and on its M&A situation saying that it ‘has received a number of proposals in relation to certain of the Company’s assets, including, but not limited to, the acquisition of certain of its subsidiaries and/or the businesses and/or assets owned or operated by certain of the Company’s subsidiaries. However, none of the proposals presented (or any combination thereof) would result in a financial return to Shareholders….’

Various Eateries has updated on H1 trading saying that ‘sales in the period grew 10.2% to £22.7m (H1 2023: £20.6m), driven largely by new site openings.’ It reports that ‘group like-for-like sales were marginally down, against a backdrop of one of the wettest winters since records began and with the Company maintaining its strategy of absorbing most price increases. As previously stated, while this strategy puts temporary pressure on margins…’

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Greggs has this morning updated on Q1 trading saying that the group has made ‘continued strategic and operational progress.’ It says over the first 19 weeks of its financial year, it has registered 7.4% LFL sales growth ‘with continued good progress across all channels.’ The company says it has opened 27 net new stores to take it to c2,500 shops. GRG adds it remains confident in 140-160 net shop openings for the full year…

Southwold brewery and pubs group Adnams has updated on Q1 trading saying that it has had a positive start to the calendar year. The company reports that, while “multiple factors” still challenge the brewing, distilling and hospitality sectors, total sales rose 11% year-on-year in Q1. Adnams reports that falling inflation is helping demand….

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BrewDog is expanding into Thailand with plans to open several bars in Bangkok through a partnership with Atalanta Hospitality. This move is part of BrewDog’s broader international expansion strategy, which aims to open 200 venues in key markets over the next seven years….

In the year ended 27 August 2023, Gordon Ramsay Restaurants saw revenue up 21% YoY to £95.6m with adjusted EBITDA reaching a record £8.3m….

Pizza Pilgrims has announced  the opening of their new pizzeria near Euston station on 10 June, giving away 1000 free slices on June 3rd from 12pm onwards to celebrate. The company reports that it has lined up four new site in total this year and has reported record revenues for the last calendar year…

The Nero Group, owner of Caffè Nero, has introduced ‘Aroma by The Nero Roasting Company’, a wholesale coffee brand offering high-quality specialty coffee beans and expertise from its Roastery. Aroma aims to meet the demand for premium wholesale coffee products….

Tasty yesterday updated on its restructuring plan saying that it ‘confirms that the first Court hearing was held on 10 May 2024’. It further says that it ‘was ordered and directed at the Convening Hearing that the seven meetings of Plan Creditors are to be convened for the purpose of considering and, if thought fit, approving (with or without modification) the Restructuring Plan, and that these are to be held on 29 May 2024.’ The second court hearing will be held on 4 June.

Specialty coffee brand WatchHouse has raised £7.2m in one of the largest equity raises on any crowdfunding platform, exceeding its initial target by 700%….

Pernod Ricard is reportedly in discussions to sell its wine interests in Australia to Accolade for AU$500m (£265m), as reported by The Australian Financial Review. Accolade, the second-largest producer in the country, owns brands like Hardys and Petaluma and was recently rescued from debt by a venture capital consortium led by the Bain group.

HOLIDAYS, HOTELS & LEISURE TRAVEL:

On the Beach has this morning reported H1 numbers saying that revenues rose by 11% to £80.8m with adjusted PBT of £4.3m against a break-even result last year…

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In response to excessive tourism, a ban on alcohol sales between 9.30pm and 8am has been implemented in select areas of Majorca and Ibiza, including Llucmajor, Palma, Calvia (Magaluf), and San Antonio.

Captivating Cuba, a specialist in Cuban holidays, has ceased trading as an Atol holder after more than 25 years, confirmed by the CAA on May 10.

Heathrow CEO Thomas Woldbye has urged the government to assist the UK aviation sector in global competition. Despite a 4.8% increase in April passenger numbers, reaching 6.7 million and putting Heathrow on track for a record year, policies such as unnecessary visas for transit passengers and proposed business rate hikes are seen as hindering the country’s connectivity.

Stansted Airport achieved a record April, exceeding pre-pandemic levels by over 90,000 passengers, totaling 2.48 million travellers. Managing director Gareth Powell attributed the success to operational efficiency and a robust route network, ensuring smooth passenger experiences with 98% passing through security in 15 minutes or less.

Travel Weekly reports only London City and Aberdeen airports have installed the new 3D security scanners ordered by the Department for Transport, with Luton and Birmingham airports expected to comply by June….

OTHER LEISURE:

Flutter has this morning reported Q1 numbers saying that revenue rose by 16% to $3.4bn with a net loss recorded of $177m (2023: loss $111m)…

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GameStop shares soared +63% yesterday (as of US morning trading) as speculators rallied around the stock following @TheRoaringKitty’s first tweet in 3 years….

Hyatt Hotels has reported Q1 numbers saying that business travel demand in 2024 has been “extraordinarily encouraging” with business revenue up 6% in Q1 vs a year earlier.

OTHER LEISURE:

Twenty companies including broadcasters ITV and Sky and podcast producer Goalhanger (co-founded by Gary Lineker) have written to suggest that, were the BBC to include ads in its podcasts, the impact could be devastating…

FINANCE & MARKETS:

Accountant BDO has released its latest Business Trends report (for April) saying that output rose last month to its highest level in almost two years. This accords with ONS data for Q1 and with S&P’s PMI data for last month…

Sterling mixed at $1.2556 and €1.1628. Oil up at $83.47. UK 10 year gilt yield unchanged at 4.17%. world markets slightly lower yesterday after their strong run and London set to open down around 13 points as at 6.30am.

RETAIL WITH NICK BUBB:

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