I would like to say how much I enjoy the e-mails from Langton Capital on a daily basis. I use the newsletter as an ideal way of keeping me up to date with what is going on financially in the drinks industry.
Tenanted pub company
Debt, tipping, costs, labour, TinyBuild, BrewDog, Caffe Nero & other:A DAY IN THE LIFE: The deadline for getting calendar 2023 financial accounts in to the FCA is Wednesday so, in order to let the accompanying essay-crisis build nicely, I spent yesterday watching the rain trace ever-shifting rivers down the office window. And then I had a massive panic. But, when I’d got my breathing under control, I told myself that there were many, many hours to go until the deadline. indeed, there would be 24 hours on Wednesday itself so chill out, it would all be a question of timing. And, as HMQ said to our former PM, the one who came a distant second to a soggy lettuce, one should always pace oneself. Sure, there’s little point leaving yourself an hour and a half to run a marathon but more rain-watching ensued alongside the vague concern that the firm’s account books could be in London at a time when I definitively am not. But worse things happen at sea and I’ve got to do Q1’s VAT next week. But it’s not Wednesday afternoon yet so let’s move on to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories (after the ellipses) are in the Premium Email. Reply to this email if you would like to upgrade. Prices for the Premium are £395 for one subscription, £695 for multiple, £995 for very large subscribers, all plus VAT. Or sign up for easy in, easy out monthly option per subscriber HERE https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN PUBS & RESTAURANTS: Tipping rule change delay: On the heels of news that Brexit checks on imports are to be delayed once again, bottle deposit schemes are delayed and that new scanners are not available to implement tweaked baggage rules at airports, the government has announced that the implementation of new tipping laws will be put back by three months to 1 October…. • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Economic outlook: The EY ITEM Club has produced its Spring Forecast for the UK economy in which it says it expects GDP to grow 0.7% in 2024, downgraded slightly from the 0.9% projected in January’s Winter Forecast. It has upgraded growth expectations for 2025 from 1.8% to 2%... • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Higher costs mean higher prices: The Sunday Times reports Stonegate CEO David McDowall acknowledges that the price of a pint may reach £10 within the next five years due to increasing operating costs but said it will still take some time. McDowall emphasised the importance of providing a certain level of experience for customers, especially as Stonegate implements surge pricing in high footfall locations, and highlights the trend towards moderation in drinking habits…. • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. PERMANENTLY HIGHER LABOUR COSTS: With delays to tipping changes announced, herewith a piece that we sent out to clients last month on the implications of (potentially) permanently higher labour costs. Summary: Time was when a busy bar restaurant could, perhaps, have got away with labour between 25-28% of sales. But, with labour scarcity issues, the NLW rising by 10% compound and tips legislation looming, this is no longer the case. Full service restaurants may be looking at 35-40% of sales being spent on labour and, with food & drink costs high, business rates rising and rents on an (until challenged) upward only trajectory, this may not be sustainable. But what’s the options? Saying something ‘isn’t sustainable’ is trite. It may not be true and, even if it is, so what? • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. COMPANY NEWS: Mislaid the Lost Forest. BrewDog CEO James Watt responded to media criticism of the company's reforestation project, expressing disappointment with ‘sensationalised’ headlines. The company’s reforestation project saw it plant 500k trees of which 50% did not survive the first 12 months due to what the company called ‘extreme weather conditions…’ BrewDog recently claimed that it had overtaken Asahi in the UK in terms of beer sales but the numbers appear to remain unsupported from public data… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Caffè Nero reported a strong performance in Q3 of its financial year, with group sales growing by 12.7% YoY and UK sales up by 10.5%. The coffee chain continued its global roll-out, opening 45 stores year to date. The company saw impressive Christmas trading and experienced significant growth in its delivery and ‘Coffee at Home’ businesses…. Everards of Leicestershire reported turnover +11% YoY to £34.7m for the year to the end of September 2023. Operating profit rose by 26% on a like-for-like pub basis, reaching £2.2m…. The MA reports pizza chain Rudy’s is expanding its presence in London with the opening of its sixth venue in Queensway this month, aiming to reach 10 locations in the capital by year-end. The new restaurant is housed in a former bank near Hyde Park and the company has plans to open a potential standalone restaurant in Canary Wharf. HOLIDAYS, HOTELS & LEISURE TRAVEL: Refuelling operatives at Heathrow airport are set to strike for 72 hours starting 4 May, affecting 35 airlines such as Virgin Atlantic, Delta Airlines, Emirates, and Air France. The dispute, involving around 50 refuellers, arises from changes to terms and conditions for new staff recruited since January. The Telegraph reports ferry passengers at Dover may face increased costs as the port ramps up hiring to accommodate new mandatory fingerprint checks…. The May Bank Holiday week may face rail disruption due to strikes and an overtime ban announced by drivers over pay and working conditions. Staff from 16 train companies will participate in rolling one-day walkouts from 7 to 9 May, with an overtime ban in effect from 6 to 11 May. A report from the Rail Delivery Group reveals that travelling by train on six UK business routes is not only up to 80% cheaper but also up to 17 times more environmentally friendly compared to flying. The report highlights that on four of these routes, trains are not only more affordable but also quicker. Liverpool airport experienced a temporary suspension of aircraft operations on Monday (22 April) due to a power failure affecting air traffic control services. Flights have now resumed. OTHER LEISURE: Hipgnosis Songs Fund is considering a takeover offer from Blackstone after the private equity firm expressed interest in outbidding a $1.4bn deal with Concord Music. Blackstone’s potential $1.5bn offer comes after Hipgnosis, owner of music catalogues from Beyoncé to Neil Young, faced turbulence from shareholders. Games developer Tinybuild has this morning reported full year numbers to end-December saying that revenues fell by 29% to $44.7m with the result that the company swung from a profit of $15.9m in FY22 to a loss of $64.5m in FY23. The company reports net cash down from $26.5m to $2.5m at the end of December… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Hornby yesterday reported that its volumes were adversely impacted by delays in shipment of products through the Red Sea… FINANCE & MARKETS: The ONS has this morning updated on UK public debt saying that the government borrowed some £11.9 billion in March 2024, £4.7 billion less than in March last year. It says ‘borrowing in the financial year ending March 2024 was provisionally estimated at £120.7 billion, £7.6 billion less than in the same twelve-month period a year ago but £6.6 billion more than forecast by the Office for Budget Responsibility… Rightmove has suggested that the UK housing market is firming up. It maintains that sellers are growing increasingly confident and asking prices are sticking rather than being heavily discounted as has been the case for some time. Data produced by the ONS shows that house prices in London have underperformed those in the rest of the UK for the some eight years now as affordability issues have choked off demand. The FTSE100 closed yesterday at an all-time high driven by easing tensions in the Middle East and weaker Sterling. Sterling weaker at $1.2350 and €1.1592. Oil down at $87.41. UK 10yr gilt yield down 3bps at 4.21%. World markets sharply better yesterday and London set to open up around 42 points as at 6.30am. 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