Visitor levies, delivery, franchisees, hotel trading, Fever Tree & other:

PREMIUM EMAIL – PLEASE DO NOT FORWARD:

A DAY IN THE LIFE:

I’ve never been particularly interested in cars.

Not in what they look like, what they cost nor, provided that they’ve got at least one seat and they get me from A to B, in how they perform.

So, when it comes to the time when I really have to buy another one, I tend put it off.

The Skoda, which has left us but which is still in the family, is 18 years old and our ‘new’ car was registered in 2013 and, with the best will in the world, it probably needs changing.

Hence, we’re at the time when, unless somebody invents Buy-Me-Any-Car.com pretty soon, I’ll have to talk to a car dealer, and that’s never much fun.

Because they’ll shine their teeth at you, ooze sincerity, try to sell you any old junk they have lying around and then financial extras by the boatload and, at the end the day, you’ll still have the feeling that they’ve picked your pocket even if you can’t quite work out how.

Anyway, got that to look forward to but, for the moment, let’s move on to the news:

PUBS & RESTAURANTS:

Overnight visitor levies:

UKH has commented on modelling by Oxford Economics that suggests that the imposition of a holiday tax would shrink GDP, cause thousands of jobs losses and see the Treasury lose hundreds of millions in tax revenue. The modelling, says UKH, ‘lays bare the devastating impact a holiday tax in England would have on holidaymakers, businesses and the economy….’

• The government is proposing giving local authorities the power to impose visitor levies in the areas that they control. UKH says that, if a 5% levy ‘is fully realised by 2030, the impact on the economy and consumers would be stark:’ Oxford Economics suggests that this would lead to a reduction in GDP of £2.2 billion, or about 0.07% of today’s GDP, hopefully less if the economy grows in the next five years. Whilst this is a small number in the context of the economy as a whole, it would not be evenly shared across all businesses.

• This would represent a ‘£1.6 billion tax increase for holidaymakers’, says UKH. And ‘£688 million in reduced tax receipts to the Treasury.’ The drop in tax revenue should be viewed in the context of the c£1,000 billion that the government currently takes in taxation per year.

• On a more micro level, UKH says ‘hospitality and tourism would be devastated by the direct impacts the tax would have on consumers:’ There would be 9m fewer nights spent in accommodation. The ONS believes there are currently around 308m bed nights spent on holiday in the UK. Business trips would need adding on top to give a total ‘bed-night’ figure.

• Allen Simpson, Chief Executive of UKH, says ‘the numbers are clear. A holiday tax would hike costs for Brits, make staycations more expensive and decimate tourism.’ Despite the funds raised by councils, he says ‘there are no winners from a holiday tax.’ Hoteliers, domestic holiday and visitor attraction companies such as Hilton, Haven and Merlin are, understandably, not keen on the imposition of a tax.

A ‘night out’:

Asahi reports on data collected by Time Out and Peroni Nastro Azzurro 0.0%, suggesting that ‘the meaning of a night out is shifting.’ Their research ‘suggests moderation is now part of everyday social culture, with nine in ten UK drinkers (90%) saying they actively moderate their alcohol intake in some way.’

Higher petrol prices & food delivery

In the US, DoorDash has launched ‘an emergency relief program to help ease the impact of rising prices at the pump for Dashers and keep more money in their wallets.’ It says its programme ‘includes 10% cash back on gas for U.S. Dashers using the DoorDash Crimson card and weekly relief payments for Dashers who drive 125 miles or more while dashing….’

• Despite the widespread use of bicycles in the UK, higher petrol prices can do little other than put up prices for any product that needs transporting.

FEVER TREE FULL YEAR:

Fever Tree has this morning reported full year results and our comments are set out below:

Headline numbers:

• Fever Tree reports that revenue for the year came in at £372.7m, up 4% in constant currency terms.

• The company had previously updated that ‘in the US, the transition into Molson Coors’ national distribution network is progressing to plan and, alongside an upweighted marketing investment, will provide a strong platform for 2026.

• Adjusted EBITDA is £42.4m against £50.7m in the prior year. Earnings per share have slipped to 18.8p from 20.9p in FY24. The dividend has been raised from 16.97p to 17.31p.

Highlights:

• Fever Tree says that it is ‘gaining scale, with 45% of Group revenue now generated from products beyond tonic, broadening Fever-Tree’s relevance across a wider range of adult socialising occasions.’

• It adds that its ‘strong US brand momentum [was] maintained throughout the Molson Coors transition, establishing a scalable platform for accelerated growth in 2026.’

• UK revenue is down ‘2% but performance improved in the second half, driven by a strong Off-Trade performance.’

• The Group completed a £100m share buyback, funded by strong operating cash flow, working capital efficiencies and transaction proceeds from the Molson Coors share issue.’ It adds that a ‘further £30 million share buyback is in progress, highlighting our cash generative model.’

Outlook

• The company reports that ‘notwithstanding the current uncertain geopolitical outlook, our expectations for 2026 remain unchanged and in line with market expectations.’

Company comment:

• CEO Tim Warrillow says ‘2025 was a pivotal year for Fever-Tree. The strategic partnership with Molson Coors in the US creates a significant opportunity to take Fever-Tree to the next level in our largest growth market.’

• The CEO says ‘the transition has progressed well, and it has been particularly encouraging to see that underlying brand momentum has remained strong throughout.’

• He adds ‘across our markets, the long-term trends shaping adult socialising, namely premiumisation, moderation and longer, lighter serves, continue to play directly to our strengths. Fever-Tree is increasingly enjoyed as the world’s leading premium mixer, but also as a premium soft drink. Products beyond tonic now represent 45% of Group revenue, a clear sign that our diversification strategy is resonating with consumers.’

• Re the outlook, the CEO says ‘as we enter 2026, Fever-Tree does so from a position of strength. We have a premium brand with unmatched credentials, an ever-growing market leadership position, upweighted marketing plans, a broader and more relevant portfolio, and scalable platforms in place across our priority markets.’

Langton Comment:

• Fever Tree’s shares were buoyed by the announcement of the partnership with Molson Coors (and the news that Carlsberg had purchased rival Britvic), but they have since edged back before getting caught in the general sell-off following the US and Israeli attacks on Iran.

• The market has been struggling with the question as to how to value Fever Tree shares for some time,

• The brand is strong but the shares are not cheap in absolute terms, despite the material fall from their end-2021 highs of over £27.

• Fever Tree’s market cap is still considerably more than twice revenue. And, with the shares trade on more than 35x historic earnings and relatively little by way of yield support, valuation remains an issue.

 COMPANY NEWS:

Domino’s Pizza franchisee Team West, which is based in Wiltshire, reports numbers to 31 March 2025 saying that revenues rose marginally to £11.38m (FY24: £11.31m). The GP% has risen to 37.1% from 35.7% and, despite a rise in admin costs, the operating loss has been reduced to £75k from £103k in the prior year. The loss before tax is £112k. This compares with a PBT of £1.23m in the prior year, which benefited from a £1.37m profit on asset disposals (FY25 – nil). The accumulated profit is £1.59m (down due to the loss in the current year) and shareholders’ funds are £1.60m (FY24: £1.8m)….

• Team West reports that ‘the year continued to be affected by the cost of living crisis, and like everyone, we have had to adapt to the economic conditions and continue to service our customers’ needs.’ It says ‘fortunately, there has been a move from restaurants to takeaway food to save money over the period and this has allowed us to maintain a good level of business.’

Joe & the Juice. Denmark-based Joe & the Juice has reported delayed full year numbers to 31 December 2024 to Companies’ House saying that revenue rose by 15.3% to £88.8m. Metrics moved in the right direction and the group reports that its GP% rose from 80.5% to 81.3%. Admin expenses rose at a slower rate than sales, up 6.3% at £63.9m and net interest charges fell. The company, as a result, reports £8.12m against £1.36m profit in the prior year…

• The company retails ‘fresh, made-to-order fruit and vegetable juices, smoothies, shots, unique sandwiches and salads, coffee, and tea prepared on the premises and cakes made by a third party supplier.’

• It reports that ‘revenue growth was mainly driven by multiple factors increase in same-store-sales, full year effect of the incorporation of delivery turnover which doubled in 2024 compared to 2023 and price increases to absorb impacts of a high inflationary pressure on input prices throughout 2024.’

• Joe & the Juice says ‘the total number of stores at year end increased from 67 in 2023 to 72 in 2024.’ It adds that it ‘is satisfied with the Company’s operational performance, exceeding previously communicated expectations, and believes 2024 results underline the robustness and growth capacity of the JOE & THE JUICE brand and business model.’

• Re the outlook, the company says that ‘building on the strong financial performance in 2024 and revenue growth trajectory from prior years, Management expects 2025 results to continue the upward trend.’

• Joe & the Juice concludes that ‘revenue is expected to display growth compared to 2025 with Operating results in a range of GBP 10 – 13 million and a positive result before tax in a range of GBP 8-10 million. Expectation for operational results is affected by full-year impact from organizational investments made in 2024 and continued investments planned for 2025.’

HOLIDAYS & LEISURE TRAVEL:

CoStar reports that ‘as the 2026 FIFA World Cup nears, there are concerns about the level of international inbound demand U.S. hotels will capture during the tournament….’

• Given current delays at airports driven by budget standoffs and staff shortages, alongside President Trump’s suggestion that he will put ICE agents into airports to screen visitors, this is perhaps not a surprise.

• Add in materially higher flight prices, the fact that televisions are widely available and pubs in virtually every country competing will be screening matches and demand may sag a little. CoStar adds that the proposed fee, ‘the $250 Visa Integrity Fee created through the One Big Beautiful Bill that was approved and signed last year’, will do little to boost demand.

• The $250 fee will apply to all visitors who need non-immigrant visas to enter the U.S. It has not yet been implemented.

Adagio Hotels has reported well-overdue numbers to end-December 2024 to Companies’ House saying that revenues rose by 4.3% to £22.4m and the GP% slipped slightly to 79.3% from, 80.8% in the prior year. Admin costs were well-controlled and the operating profit rose by 37.5% to £5.4m/ PBT was up by 89% at £3.2m. Accumulated profits as at the balance sheet date were £4.0m and shareholders funds rose to £5.1m from £2.8m at the prior year end.

• Aparthotels Adagio, which owns Adagio Hotels UK, is a JV between Accor and Pierre & Vacances Center Parcs. Adagio in the UK had 6 managed and 1 franchised hotel both in the year under review and the prior year. In addition, it had one franchised hotel in both years.

• It says that it ‘remains confident in its long-term prospects and is committed to further expanding the Adagio brand in the UK. A new hotel opened in 2025, reinforcing Adagio’s presence in the region and supporting its continued development.’ The company adds that it ‘remains supported by the awareness of the Adagio brands and the commercial strengths of the Adagio group alongside Accor.’

OTHER LEISURE:

GB News, which is jointly-owned by hedge fund manager Sir Paul Marshall and Dubai-based investment firm Legatum, has reported numbers to 31 May 2025 to Companies’ House revealing that it lost £29.8m before tax in the year. Accumulated losses since incorporation in 2019 totalled £149.7m as at its last balance sheet date…

• GB News reports revenues up by 58% at £26.2m. Operating losses were reduced by around a quarter to £26.6m and the loss before tax was cut by 17% to £29.8m. The company has lost £149.7m since incorporation and now has negative net worth of £27.5m (FY24: negative £121k).

• Re the Going Concern principle, which the company has adopted, GB News says, as it is loss-making, it is ‘dependent upon the contributions received from its investors’. It says it has ‘strong support from its investors and the Directors have no reason to believe that the level of these contributions might vary to a significant degree or not be forthcoming as required.’

• The directors say they have issued SAFEs (Simple Agreement for Future Equity) ‘after the year-end to replace the convertible debt.’ They add that ‘investors have confirmed they will provide funding which the directors believe will be sufficient to cover any expected deficit.’ The Auditor, Buzzacott LLP, has signed off on the adoption of the Going Concern principle, dated 24 Feb 2026.

• GB News says its aim is ‘to champion robust, balanced debate and to provide a range of perspectives on the issues that affect everyone in the UK’. It says ‘with television audience share up 53% and radio audience share up 61% year-on-year’ and with strong growth in its digital operations, the ‘encouraging usage data is highly supportive of the group’s stated ambition of becoming the UK’s largest news channel by 2028.’

FINANCE & MARKETS:

Markets see-sawed yesterday. Stocks fell and interest rates and the price of oil rose early in the day on the back of weekend news that President Trump was set on obliterating Iran’s oil infrastructure. All the above markets reversed their moves when Mr Trump tweeted that peace talks had taken place and then wobbled a bit when Iran said they hadn’t.

Sterling up at $1.3396 and €1.1569. Oil down around $11 at $102.78. UK 10 year gilt yield 4.94%, down around 5 basis points. World markets better yesterday but London set to open around 10 points lower as at 6.30am.

KPMG says that growth estimates for UK economic growth this year are around half the level of 2025 (0.7% vs 1.5%) following the US and Israeli attacks on Iran….

• KPMG says ‘the outlook for growth in 2026 has taken a hit from the impact of higher energy prices, a cooling labour market and weak household spending.’ It adds that ‘the weaker growth outlook coupled with growing cost pressures will likely see firms scale back any investment plans over the coming year. Consumers could also cut back on discretionary spending to offset the squeeze from higher prices.’

• KPMG cautions that ‘with inflation likely to re-accelerate from this summer, the Bank of England will be reluctant to move quickly on rates, meaning households and businesses will face higher borrowing costs for longer, even as the economy slows.’

RETAIL WITH NICK BUBB:

• News Flow This Week: After the Kingfisher finals today, the next big scheduled event is the much-awaited Next finals and update on Thursday, although Thursday also brings the Q1 results from the fashion giant H&M, the finals from the Co-op Group, a Capital Markets event by the fast-growing Dutch discount chain Action (which is owned by the investment giant 3i) and an H1 pre-close trading update from the discount chain Pepco. First thing on Friday we get the widely followed monthly GFK Consumer Confidence index and the Retail Sales figures for February from the ‘Planet’ ONS. The Morrisons Q1 update and the Asda Q4 update are also due/overdue.