JD Wetherspoon reports like-for-like sales up 3.5% in First Quarter, sales growing slowing: JD Wetherspoon has reported like-for-like sales were up 3.5% and total sales increased 2.3% for its First Quarter, the 13-week period up to 23 October 2016. The level of like-for-like sales growth reduced to 2.3% in the last 5 weeks of the period. The company stated: “The operating margin, excluding property gains, in the 13 weeks to 23 October 2016 was 8.6%, compared with 5.8% in the same 13 weeks last year. The margin was unusually high during the period and was unusually low for the same three months last year. The company currently anticipates an operating margin of around 7% for the current financial year. The company has opened one new pub since the start of the financial year and has sold nine. We intend to open about 15 pubs in the current financial year. Following a recent meeting with a major shareholder, the company issued a summary of its current views in respect of debt. The summary is as follows: The company understands that debt always involves risk: the greater the debt, the greater the risk. As a rapidly expanding company, Wetherspoon has historically had higher debt levels than the conservatively financed ‘family brewers’, the debts of which have often been around two times Ebitda, but the levels have usually been lower than the large pub ‘PLCs’, where they sometimes rose to five to eight times Ebitda, in recent years, often with unfortunate consequences. As well as expanding rapidly by opening new pubs, Wetherspoon has bought back approximately half of its shares in this millennium, at a cost of £400m and has spent approximately £140m on freehold reversions: freeholds of properties where Wetherspoon was the tenant. This level of expenditure and debt may be justifiable in an era of (a) low interest rates, (b) reasonable historic prices for shares and property and (c) an experienced board which is sceptical of dangerous fashions in the financial world. Even so, the company’s debt levels during this period, which have benefited shareholders, have clearly involved significant risk. As at 24 July 2016, the company’s net debt/Ebitda was 3.47 times. Weighing the level of debt and risk is a difficult job. Our aim is to be conservatively financed as the business matures, although a precise timetable depends on many factors. For the foreseeable future, it is intended that the company’s net debt/Ebitda will be around 3.5 times. The ratio may rise for a temporary period, for example, if there were a sudden deterioration in trading, in which instance the company would seek to reduce the level in a timely manner. Insofar as it is possible to generalise, the board believes that debt levels of between zero and two times Ebitda are a sensible long-term benchmark.” Chairman of Wetherspoon Tim Martin, added: “Angela Merkel of Germany and François Hollande of France have supported the stance of the unelected EU ‘President’ Juncker in stating that the “UK must pay a price” for leaving the EU and that there “must be a threat” to the UK. According to press reports, Juncker told European business leaders, in October, not to negotiate with UK companies and to adopt an “intransigent” attitude. This suggested approach puts an unfair burden on the excellent European suppliers with which UK companies, like Wetherspoon, have traded for many decades. For example, Wetherspoon normally agrees on trade deals with suppliers for three to ten years. If we, and companies like ours, are unable to agree on tariff-free transactions, it will inevitably result in a loss of business for European companies which have done nothing to deserve this outcome. Indeed, the ultimate sanction will be in the hands of UK consumers, should they take offence at the hectoring and bullying approach of Juncker and co. French wine, Champagne and spirits, German beer and Swedish cider, for example, are all at extreme risk. The company’s sales growth has been strong in the last few months, but has slowed in recent weeks. The company anticipates higher costs in the remainder of the current year, for instance in the areas of wages, business rates and repairs. The company also intends to increase the level of capital investment in existing pubs from £34m in 2015/6 to around £60m in the current year. The company has made a reasonable start in the current year, but any forecasts for the full year are inevitably tentative, with nine months still to go – and the outlook for the current financial year is unchanged. We will provide updates as we progress through the year.”

Just Eat reports orders up 34%: Just Eat, the leading marketplace for online food delivery, total orders in the Third Quarter to 30 September were 33.3 million, showing strong growth of 34% year-on-year on both a reported and like-for-like basis. UK orders were up 28% in the quarter, notwithstanding a significantly warmer and dryer summer than 2015 (Q3 2015: up 50%). There was further penetration into mobile usage with more than 80% of UK orders being made via mobile devices (Q3 2015: 74%) and over 46% of UK orders being made by app (Q3 2015: 41%). Over 30% of UK orders are now being processed on its Orderpad restaurant platform, and it has successfully commenced the roll out of this technology in Spain, Denmark, Italy, Canada and Ireland. The company stated: “As we get closer to the end of the year, we increase our expectations for full year revenues to £371 million at constant exchange rates up from £368 million, and a range of £109-£111 million of underlying Ebitda, up from £106-108 million, again at constant exchange rates.” Chief executive David Buttress said: “Just Eat has had another period of strong order growth. Whilst we continue to invest in a number of technology and marketing initiatives and are starting to see the benefits of these in many of our markets, we have continued to focus on delivering the best possible service to our restaurants and customers. Consequently, we are pleased to increase revenue and Ebitda guidance for the full year. I would like to thank the whole Just Eat team for their continued hard work and commitment.”

Easyhotel announces Reading franchisee: Easyhotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has announced the signing of a new franchise agreement in Reading, which will add a further 54 rooms to the Easyhotel network. The site which is centrally located on Caversham Road in Reading is an existing hotel that will be converted into an Easyhotel during 2017. The hotel is only a few minutes’ walk from Reading’s town centre and is within easy reach of the railway station and all major road networks. Following the opening of the 107-room easyHotel Brussels on 24 October 2016, its first easyHotel in Belgium, this agreement brings easyHotel’s total committed development projects to 1,658 rooms under development, 576 of which are owned and 1,082 are being developed by franchise partners. Chief executive Guy Parsons said: “We are delighted to announce the extension of our franchise network in the UK as we continue to implement our expansion strategy. This franchise agreement will enable us to further increase our presence in the south-east and raise brand awareness without direct capital investment.” Easyhotel Reading franchisee, Nadeem Boghani, vice chairman, Splendid Hospitality Group, said: “We are delighted to be working as a franchise partner with Easyhotel to create the new Easyhotel Reading. Reading is an area we know well from an operational point of view and it is ideally suited to the Easyhotel portfolio. We think that business and leisure travellers in and around the M4 corridor will welcome this affordable super budget option. The simple ethos and exceptional brand recognition of Easyhotel appeals to us and fits well into our 20-strong portfolio of branded and independent hotels across the UK.”