WTB, Travelodge, GNK, YUM, SBUX, JDW, business confidence & other:

A DAY IN THE LIFE:

I calculated Langton’s Q1 VAT yesterday and did the accompanying paperwork.

And, if there’s anything I enjoy even more than working out the FCA’s Financial Resilience stats for them on a sunny day when I should be drinking beer, it’s spending hours and hours poring over VAT receipts in order to, at the end of it all, remit what for me is quite a large cheque to HM Treasury.

Anyway, that’s done and the sun’s still shining.

It’s a new month and, re the weather, as Hull City are wont to say around the 80th minute, there’s still plenty of time for it all to go wrong.

On to the news:

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PUBS & RESTAURANTS:

Cost inflation:

Meaningful Vision reports that further inflationary pressures are likely to beset the hospitality industry. It says its data ‘paints a clear picture: while 2024 saw a levelling off of menu price inflation at 5%, early 2025 saw a significant upturn, driven in no small part by escalating labour costs….’

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Business confidence:

The Institute of Directors has reported that business confidence rose (albeit only to minus 51) in April to reach what is its highest level since October last year. It says this is the second monthly rise in a row and adds that ‘the overall mood among business leaders improved in April as the worst of the tariffs from the States were paused for 90 days….’

Other news:

Punch Pubs & Co, in collaboration with charity partner Only A Pavement Away, has announced its latest initiative to support the national Food For Thought campaign. The company says ‘the latest inspiring collaboration included the donation of 2,100 portions of Vietnamese curry, which was matched by equal portions of rice by wholesale food supplier, Brakes.’

COMPANY NEWS:

Greene King has reported that revenue in the year to end-December 2024 rose by 3.2% to £2.4bn. The company raised operating profit by 6.4% to £198m. Exceptional and other costs drive the company to a statutory operating loss of £16.4m versus a profit at the same line of £167.2m in the prior period….

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YUM Brands has reported Q1 numbers saying that worldwide system sales grew 5%, excluding foreign currency translation, led by Taco Bell at 11% and KFC at 5%. The company announces that unit count increased 3% including 751 gross new units in the quarter. KFC opened ‘528 gross new restaurants across 52 countries.’ The UK comprises 6% of KFC system sales and LFL sales in the UK rose by 4% in the quarter…

JD Wetherspoon has announced that it is to open a new pub in Merchant Square, Paddington, London, on the site of the former Temper restaurant. The company adds that it ‘aims to start development work in a few weeks time and be open towards the end of summer….’

AG Barr announced yesterday that, following the announcement of its ‘intention to discontinue the Strathmore brand during the Company’s current financial year, the Company is pleased to announce that it has now entered into exclusive discussions with a third party regarding a potential disposal of the Strathmore business.’ It says ‘further announcements will be made as and when appropriate.’

Starbucks has reported that re the UK, ‘we posted positive comps and have started gaining market share with great feedback on our fresh baked launch.’ Regarding other markets, it says ‘in The Middle East, our regional business partner returned to positive transaction comps for the quarter. And in Japan, the business posted their sixteenth consecutive quarter of comp growth and has increased both brewed coffee and espresso comps through a focus on the coffee house experience.’

Rémy Cointreau, which has a March year end, has reported organic sales down by 18% in the year as a whole to €984.6 million. The performance is ‘in line with expectations’. Sales in Q4 fell by 19%. The Americas were down by 20.2% for the full year, but this featured a ‘steep recovery’ in Q4. The group confirmed its outlook for FY26.

Subway reportedly closed some 630 US locations in 2024 according to information in the company’s franchise disclosure documents. The company now has the lowest number of US restaurant in 20 years.

In the US, Wingstop has reported Q1 numbers saying that System-wide sales increased 15.7% to $1.3 billion with 126 net new openings in the fiscal first quarter 2025. The company announces that ‘domestic same store sales increased 0.5%’ and total revenue increased 17.4% to $171.1 million. Net income rose by 221.0% to $92.3 million, or $3.24 per diluted share…

WHITBREAD – FULL YEAR NUMBERS:

Whitbread has this morning reported full year numbers and our comments thereon are set out below. Headline numbers: Whitbread reports revenue down 1% at £2.922bn with Adjusted PBT some 14% lower at £483m. The group reports Adjusted EPS down by 6% at 194.6p and the dividend has been held at 97.0p, EPS was also down 6% at H1. The company reports that Premier Inn UK ‘total accommodation sales were in line with last year.’ There are more units open and ‘revenue per available room was down 2%.’ The group says that ‘UK F&B sales were in line with our expectations and fell by 11% due to the impact of AGP (the accelerated growth plan), partially mitigated by strong breakfast sales.’

The group says that UK margins fell from 21.2% to 18.8%. In Premier Inn Germany, the estate outperformed ‘driven by the increasing maturity of our hotels and brand, enhanced distribution, a strong events calendar and the positive impact of our commercial initiatives; adjusted loss before tax† reduced to £11m (FY24: £36m).’ The group points out that total cash returned to shareholders via dividends and share buy-backs in FY25 was £442m (FY24: £756m). It says it has a ‘strong balance sheet’ and ‘lease adjusted leverage increased to 3.0x (FY24: 2.6x) and net debt† was £483m (FY24: £298m).’

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TRAVELODGE – FULL YEAR NUMBERS:

Herewith a piece sent out to clients in April:

Travelodge has reported its FY numbers for the period ended 31 December 2024 to Companies House. The group is the second largest hotel brand in the UK, operating in the midscale and economy (MS&E) sector of the hotel market, with around 600 units. In terms of scale, Premier Inn has around 860 hotels. Headline numbers: Revenue slipped slightly to £1.008bn from £1.017bn in the prior year. Underlying operating expenses rose by 5.5% and operating profit slipped by 17% to £268m from £324m in the prior year. Both interest costs and interest received rose and PBT was down by almost 30% at £107,3m (FY23: £152.7m). The above are all underling numbers in both years. In FY24, Travelodge reports exceptional costs before tax of £10.4m compared with a charge of £5.5m in the prior year….

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HOLIDAYS & LEISURE TRAVEL:

Hilton has reported Q1 numbers saying that total revenue rose to $2.7 billion in Q1, up by 4.7 per cent on the same period in 2024. Net profit rose by 12 per cent year-on-year from $268 million to $300 million. The company is forecasting full year net income of between $1.71 billion and $1.75 billion….

OTHER LEISURE:

Flutter Entertainment yesterday announced that it had completed the acquisition of Snaitech, ‘one of Italy’s leading omni-channel operators from a subsidiary of Playtech plc, for cash consideration based on an enterprise value of €2.3bn….’

A judge in the US has held that Apple wilfully violated an injunction in a case brought by Epic Games. The judge suggests that a top Apple executive “outright lied” under oath.

Meta yesterday reported Q1 numbers saying that revenue came in at $42.31 billion for the first quarter, compared with analysts’ average estimate of $41.40 billion. Shares rose around 4% in after-hours trading.

Microsoft Corporation has reported Q1 numbers ahead of Wall Street’s quarterly sales and profit expectations. Revenue rose 13 per cent year-on-year to $70.1 billion and net income was up 18 per cent to $25.8 billion.

The Wall Street Journal reports that Tesla’s board has started a search for a CEO to take over at some point from Elon Musk.

FINANCE & MARKETS:

US GDP shrank in Q1 by 0.3% after growth of 2.4% in the last quarter of the Biden administration. President Donald Trump has asked for more time to let his policies work. He says $8tn of inward investment had been promised and blamed the slowdown on his predecessors.

The US trade deficit in physical goods widened materially in March to $162bn from $92.8bn at the same time in 2024 as importers sought to access goods ahead of the imposition of tariffs.

The Nationwide reports that home prices in the UK fell by 0.6% in April. It says the softening was due to stamp duty changes bringing forward transactions into March.

Sterling down at $1.3291 and €1.1765. Oil lower at $61.05. UK 10 year gilt yield down 4 basis points at 4.43%. World markets better yesterday & London set to open around 59 points higher as at 6.30am.

RETAIL WITH NICK BUBB:

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