CPG, COM, Uber, Disney, trading, WFH, music, services & other:

A DAY IN THE LIFE:

Seeing that the sun was shining Up North yesterday, I ate my lunch outside.

And that was a mistake because, whilst I’m betting that the forecast low for the day of minus five was correct, I struggle to believe that it got up to nine degrees, and it certainly didn’t anywhere near where I was sitting.

Embedded picture. 

Furthermore, having made the foolish statement that I was tough enough to eat outdoors now that it was February and the winter was behind us, I couldn’t come in for about an hour and, after I’d stopped shaking and could speak again, I had to admit that I was in serious need of warming up.

Anyway, as I’m told that reading about the latest doings in the White House can generally be relied upon to make me go red in the face, I turned to the front pages.

And, sure enough, it wasn’t too long before I was truly hot under the collar. On to the news:

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PUBS & RESTAURANTS:

Trading:

S4Labour reports that hospitality sales saw modest growth in January. It says sales year on year were up 1.9%. London outperformed the provinces…

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WFH:

Research conducted for City AM has found that 29% of adults say they would look for a new job if their boss banned working from home. Only 58% said they would comply with an instruction to return to the office for five days a week. Talk is cheap, of course, but it is likely that WFH is now somewhat embedded…

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Service sector:

S&P has reported its UK Services Sector PMI for January saying that the ‘data signalled a sustained expansion of business activity.’ It caveats this by saying that ‘incoming new work declined in January and the pace of job shedding accelerated to its sharpest for four years….’

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Music:

The Night Time Industries Association has reported on the economic benefits of electronic music in the UK’s hospitality industry saying that such music contributed an estimated £2.4 billion in 2024 in terms of measurable economic impact. The NTIA says ‘while overall spending has dipped in certain areas since 2022, the sector shows extraordinary resilience and innovation, balancing commercial opportunities with community-driven values…’

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Other news:

The World Brewing Alliance reports data from Oxford Economics that suggests the global beer market was worth US$878 billion to global GDP in 2023….

COMPASS GROUP – Q1 UPDATE:

Compass Group has updated on Q1 trading ahead of its AGM later today and our comments thereon are set out below:

Headline numbers: Compass Group reports that it ‘delivered strong organic revenue growth of 9.2% in the first quarter.’ It says that ‘all regions and sectors performed well, with positive outsourcing trends continuing to underpin our growth momentum.’ CPG says that ‘organic growth drivers were in line with our expectations, with net new business supported by strong client retention, and pricing and volumes trending as anticipated.’ The company reports North America organic revenue growth of 9.7% with 8.4% in Europe and 7.9% in the Rest of the World.

The group reports ‘we continue to invest in attractive growth opportunities which further enhance our sectorisation and capabilities to unlock new market opportunities.’ Compass says its ‘expenditure on M&A for the year to date is c.$1.0bn, the majority relating to Dupont Restauration (France) and 4Service (Norway), which completed in January, alongside the disposals of our operations in Chile and Kazakhstan.’ Re Currency, CPG says if current spot rates were to continue for the remainder of the year, foreign exchange translation would negatively impact 2024 revenue by $558 million and operating profit by $36 million.

Outlook: Compass Group reports ‘we are pleased with the strong start to the year. The Group delivered good growth across all regions and sectors, supported by continued strong client retention.’ It says ‘we are an even more focused business and are leveraging investments in capex and M&A to support future growth, as we maintain our strong track record of delivering long-term, compounding shareholder returns.’ The company concludes ‘our 2025 guidance remains unchanged.  We expect to deliver high single digit underlying operating profit growth with organic revenue growth above 7.5% and ongoing margin progression.’

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COMPANY NEWS:

Comptoir has announced the formal appointment of Chaker Hanna as Chief Executive Officer of the Group, with immediate effect. It points out that ‘Chaker has over 15 years’ experience operating at CEO level and served as Chief Executive Officer of Comptoir upon joining the Company in March 2010, until his departure in August 2022….’

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Jennings Brewery in Cockermouth is reported set to reopen under new ownership after the acquisition of the brewery for an undisclosed sum by two local businesspeople and entrepreneurs.

Di Maggio’s Restaurant Group reports that it generated some £49.5m in sales in the year to April 2024, up 8% on the prior year. The group reports PBT and exceptional items of £6.2m.

HOLIDAYS & LEISURE TRAVEL:

Doncaster City Council has announced that the owner of Munich Airport will provide operational support in running the soon-to-be reopened Doncaster Sheffield Airport. The site closed in November 2022 and should, according to its current timetable, reopen in Spring next year.

TUI-owned Marella Cruises reports that January was its best month ever in terms of sales.

Uber has reported Q4 and full year numbers saying that, in Q4, ‘Gross Bookings grew 18% year-over-year and 21% year-over-year on a constant currency basis.’ It says that income from operations was $770 million and adjusted EBITDA of $1.8 billion was up 44% on the prior year…

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OTHER LEISURE:

Walt Disney, which is a September financial year end, yesterday reported Q1 numbers ahead of Wall Street estimates. The company’s Entertainment unit (film & TV) had a strong Christmas but the shares slid by around 1.6% on the news after the company added that it had lost 700,000 Disney+ streaming subscribers in the quarter. It pointed to a “modest” decline in Q2 as a result of a price increase.

Games developer tinyBuild has updated on full year trading to end-December saying that ‘Revenue and Adjusted EBITDA [are] broadly in line with expectations for FY 2024.’ The company says that ‘cash and cash equivalents of low single digit millions at the end of December 2024, in line with expectations, with cash seasonally improving at the end of January 2025….’

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FINANCE & MARKETS:

Bank of England Interest rate decision at 12 noon today. A drop from 4.75% to 4.50% is widely predicted. Whilst expected (and likely), there is a risk of disappointment if rates are not reduced in line with market forecasts…

• City economists are forecasting between three and six rate cuts this year. That’s a pretty wide range and the outturn should be in there somewhere.

The SMMT reports that new car registrations in January were down by 2.5 per cent on the same month in 2024. Re EVs, it says ‘EV demand is growing’ but it adds ‘affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers.’

US imports reportedly rose by 4% between December and November as importers moved to beat what they imagined, rightly, would be sabre-rattling gestures on tariffs.

Sterling up marginally at $1.2480 and €1.2024. Oil lower at $74.85. UK 10 year gilt yield down 9 basis points at 4.44%. World markets up yesterday and London set to open up some 58 points as at 6.30am.

RETAIL WITH NICK BUBB:

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