Marston’s, Compass Group, TUI AG, Airbnb, jobs market & other:

A DAY IN THE LIFE:

A cat wandered past my home-office window the other day with a dead squirrel in its mouth.

And, whilst that’s a big ‘mon chapeau’ to the cat, squirrels are tough little beggars, it’s a good job the dog didn’t see what was going on as she’d have run straight through the plate glass windows to get at them. 

Because any price would have been worth paying to get the two animals that she hates most in the whole world in her mouth at the same time.

And that’s a handy illustration of her attitude towards both deferred gratification (she simply will not defer gratification for any period of time, no matter how short and no matter how great the deferred reward) and the time value of a severe scolding (meaning that, if the telling off is more than a minute or two in the future, it may as well not happen at all).

So the cat caught a lucky break. Less so the squirrel, of course, but that’s life.

Or death in this case. On to the news:

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PUBS & RESTAURANTS:

Employment (and demand):

ONS stats yesterday confirmed that the UK jobs market has continued to weaken. The number of workers on payrolls fell in the first few months of the year and pay rises continued to moderate. Some analysts have suggested that April’s increase in employer National Insurance contributions and the National Living Wage may be reducing demand for staff, although there were signs of moderation before the changes came into effect….

Other news:

Celebrity farmer and now publican Jeremy Clarkson has told The Telegraph that running a put is ‘more stressful’ than running a farm. He says that operating his pub, The Farmer’s Dog, has been worse for his nerves than has been keeping his farm afloat. The fourth season of Clarkson’s Farm will return to Amazon Prime on 23 May…

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USA – CGA reports US on-premise sales rose by 4% year-on-year in the week ending 3 May 2025. It says that spend per ticket was up 5%, suggesting that volumes declined.

MARSTON’S – H1 ANALYSTS’ MEETING:

Following the release of its H1 numbers, Marston’s hosted a meeting for analysts and our comments thereon are set out below: Introductory comments: See also earlier Flash Note. This was a ‘really good half year with growing evidence that the transformation programme is working’. The positive trends ‘should accelerate’. H2 has begun well and guidance is unchanged. Period included a record Christmas Day and a record Mothers’ Day. LFL sales +1.9% in Q1, +0.7% in Q2 and +10.5% in the five weeks since H1 end. Caution: Easter comps moved from Q2 in FY24 to Q3 in FY25 (and the weather has been very good).

Pub EBITDA margin up to 20.1% this year from 17.6% last. Slide 7 shows the bridge from last year to this. Co expects to offset additional labour cost in H2 with efficiencies. Target margin unchanged. Properties are 82% freehold. NAV per share rises from 95p to 107p. Leverage is below 5x. Stable debt position.

Strategic progress: The company ‘is now very much in delivery mode’. It ‘has made good progress on improving the pub operating model’. Conversions & new formats: 18 transformations YTD. Average 33% uplift. Will do 30 this year, most on Two Door. Around £250k. Says (re transformations as a whole), it’s ‘early days but so far, so good. Digital transformation. Launched improved ‘order from table’ format in March 2025. Should come into its own in the summer (in Beer Gardens, for instance). Q. This is in active roll-out and will be in all pubs by financial year end.

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COMPANY NEWS:

Marston’s shares yesterday responded positively to the company’s H1 numbers and the news that the company believes it is now delivering on earlier promises. The shares finished up 3.5% at 42.7p having been a little higher earlier in the day.

Coca Cola Europacific Partners reports that it is today holding a Capital Markets Event in Manila for analysts and investors. It says ‘Chair Sol Daurella, Chief Executive Damian Gammell and members of the executive leadership team will present our growth strategy and key enablers to drive the delivery of our mid-term growth objectives and continued shareholder value.’

The MCA reports that Shake Shack has plans to ramp up expansion in London and across the country by 2027. Business director Richard Franks says that forthcoming openings include a new site in Cambridge’s Petty Cury shopping district and several more undisclosed locations in the pipeline….

In the USA, McDonald’s is reported set to hire up to 375,000 new employees across the country this year….

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Also in the US, Dutch Bros has reported Q1 numbers saying that it achieved revenues of $355.2 million, up 29.1% from $275.1 million in the same quarter last year. It says that net income was $22.5 million, or 13 cents per share, as compared $16.2 million, or eight cents per share, in Q1 – 2024….

COMPASS – H1 RESULTS:

Compass reports revenues up by 8.5% at $22.6bn with underlying operating profit up by 11.6% at $1.627bn. The company reports PBT of $1.478bn against $1.363bn in the prior year. Underlying EPS is up 10.6% at 64.5c and the group is reporting an interim dividend of 22.6c against 20.7c in the prior year. Compass reports that it ‘secured new business of $3.6bn, an 8.5% increase year on year’ and adds that it had ‘strong client retention rate of over 96%.’ It maintains that it is investing for future growth, saying that it had $1.7bn net expenditure on capex (3.0% of underlying revenue) in the half year.

Outlook: Compass reports that it is ‘well placed to benefit from any increase in outsourcing due to macroeconomic pressures.’ It says the outlook is unchanged and adds ‘for 2025, we continue to expect high single-digit underlying operating profit growth driven by organic revenue growth above 7.5% and ongoing margin progression.’ The company says ‘longer term, we remain confident in sustaining mid-to-high single-digit organic revenue growth, ongoing margin progression and profit growth ahead of revenue growth.’

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HOLIDAYS & LEISURE TRAVEL:

Manchester Airport has confirmed that its Terminal 1 is to close after part of it is included in an enlarged Terminal 3 next year.

Premier Inn has secured a vacant office block close in Stamford Street, close to the South Bank area, which it will convert into a 400-bedroom hotel to be run as a Hub by Premier Inn. The project is subject to planning permission and an opening date has not been announced…

Airbnb has announced that it is to offer ancillary services such as the ability to book hair stylists, chefs and personal trainers as well as renting out properties. The company has introduced an ‘experiences’ tab on its revamped app…

TUI Q2 RESULTS:

TUI reports that ‘Q2 Group revenue was modestly higher up 1.5% to €3.7bn overall.’ It reports ‘revenue was supported by continuing strong Travel & Tourism market fundamentals and robust consumer demand as we continue to transform the business and deliver sustainable growth.’ Group underlying EBIT was a seasonal loss of €206.8m (Q2 2024: loss €188.7m). The company reports that this is ‘excluding a €32m effect from the shift of the Easter holidays into Q3. The company says that ‘results included a solid performance in Holiday Experiences, with Markets + Airline closing in line with expectations.’ TUI reports that ‘including the impact of Easter, Group underlying EBIT loss of €206.8m was worse by €18.1m.

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OTHER LEISURE:

Microsoft Corporation is reported set to cut around 3% of its workforce globally in its largest redundancy programme in over two years. The company has around 228,000 full-time workers. It says ‘we continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.’

FINANCE & MARKETS:

Sterling up at $1.3303 and €1.1893. Oil up at $66.21. UK 10 year gilt yield up 2 basis points at 4.67%. World markets mixed yesterday & London set to open around 22 points lower as at 6.30am.

RETAIL WITH NICK BUBB:

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