LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

LIBERUM: The Liberum Leisure Digest: Festive cheer, optimistic new year

LIBERUM: The Liberum Leisure Digest: Encouraging updates, falling markets

Long-term attractiveness underpinned by further shareholder rewards

Whitbread reported consensus-aligned revenue in H1 but better-than-expected profitability. The UK business continued to outperform the local sub-segment and the losses in the German activities narrowed. The FY guidance has been maintained, supported by buoyant trading trends. While higher capex is expected, the majority of the additional expenses will be auto-funded. The raised dividend and an additional of £300m buy-backs also testify to the group’s optimism. We have upgraded our P&L estimates

UK keeping buoyant; German business on the right path

In the past quarter, Whitbread continued its success in the UK hotel market and its UK restaurants bore fruit after effective commercial initiatives. Its German business also benefited from the overall restoring market demand and improving performance. The group reconfirmed its upbeat stance on the FY outlook.

Thriving in a sluggish economy

Whitbread’s share price rose by up to 5% today following the announcement of stronger-than-expected FY figures and a share buy-back programme that is scheduled to complete in the coming HY. The current trading looks supportive, which is hoped to be further supported by expanding the hotel portfolio and the seemingly less-worrying unfavourable macros. We expect an increase in consensus estimates and our target price.

Cheerful H1; H2 looks softer but manageable

Both the in-line revenue and the market-beating adjusted profit exceeded their pre-pandemic levels in the past HY as the inspiring trading trend extended into Q3. Whitbread now foresees tougher market conditions on the back of inflation, but diminishing interest costs and the slightly more favourable loss outlook in Germany should allow an offset effect. Additionally, the group has managed to upsize its long-term network target following a contraction for independent operators. We expect an upgr

FY23 looks rosy despite macro headwinds

The market reacted positively to Whitbread’s consensus-beating FY22 results, resumption of dividend distribution and compelling to-date trading update. Despite the heavier inflationary pressures, the group seems to be managing to demonstrate its ability to cope with the current economic downturn.

Resurrecting in the UK but challenging in Germany

Whitbread’s revenue surpassed its pre-crisis level in the past quarter and was especially good in the UK hotel business. The group maintains its confidence in UK hotel trading, while the restrictions-led delay in recovery in the German market remains a concern.

Whitbread - Strength in depth

Whitbread continues to show that the strong get stronger with Premier Inn, much the largest UK hotel chain, materially outperforming the market throughout H1 to August and to date (by 14% in the seven weeks to 14 October). Notwithstanding seasonality, accentuated by the staycation boon, management expects leisure demand to remain buoyant, with tradespeople business resilient and office-based custom recovering, thereby a potential return of UK like-for-like RevPAR to pre-pandemic levels ‘at some

Supportive H1 but margin rebuilding under pressure

Despite the encouraging H1 performance, which was partially explained by the staycation-driven increase in demand, and a faster revenue recovery for its UK hotel business, Whitbread’s H2 profit generation should be limited by inflationary pressures and the restrained activities in Germany.

Whitbread - The strong get stronger

Confirmation of recovery ‘much broader than staycations’, backed by continued significant outperformance of the midscale and economy hotel market in the quarter to May, highlights a predictably positive update by Whitbread. That is not to play down expected ‘very strong’ demand throughout the summer at tourist locations (c 15% of the estate). While key office-based demand may not pick up meaningfully until the autumn, robust finances, brand strength and economies of scale should allow Whitbread

Encouraging recovery signs seen

Whitbread’s Q1 was largely constrained by the travel restrictions in the UK, like its rivals, while it managed to enlarge its outperformance to the M&E market compared to past quarters. The outlook remains unchanged despite the staycations-driven positives and the encouraging pick-ups in leisure demand from 17 May.

Well positioned for future success

Strong performance against tough market conditions

Initial Equity Trading Comments - 19 February 2024

Pinewood Technologies (PINE LN) - Driving growth in automotive software

Pinewood’s transition to a pure-play automotive SaaS business is now largely complete. Today we introduce summary forecasts out to FY26 and reiterate the investment case. We see significant opportunity for Pinewood to grow its user base in the UK and internationally whilst generating high EBITDA margins and cash conversion. With a 24.5p special dividend embedded in the current price (payable Q1/Q2), the effective price today is 12.3p. Based on the Group’s FY27 target of £27m EBITDA, we estimate

Domino's Pizza - Growing the base

Domino’s Pizza Group’s (DOM’s) new CEO has set an ambitious long-term growth target, including an acceleration in its net store opening programme. With better alignment between the company and its franchisees, management believes DOM should be capable of generating improved profit growth, versus that achieved in recent years, and potential higher returns.

Marks & Spencer+ (MKS, House Stock at 255p) - 7Y FS HSBC UK tie-up– another brick in the wall

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

PROGRESSIVE: Vertu Motors: Traction control

Vertu is the fourth largest automotive retailer in the UK, with 188 sales outlets and a track record of cross-cycle growth, principally through businesses it has acquired, funded by equity, debt and most importantly cash generation. Vertu operates across the entire vehicle lifecycle, including new and used vehicle sales, and vehicle servicing, repair and parts. Service and repair is a 40+% gross margin repeating business. With economic headwinds, the transition to electric vehicles, recent overs

LIBERUM: Safestay: First management contract opens up new revenue stream

Hybridan Small Cap Feast - 17 April 24

17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

React Inititation of Coverage

React Group is a well-managed, growing UK services business with a high degree of recurring revenues (c87%).

SSP Group+ (SSPG, House Stock at 218p) - Further progress expected in H1

ME Group - Modernising and growing the estate driving growth

During 2023, ME Group commenced the deployment of its next generation photobooths, which are integrated with the group’s newly developed proprietary software, gained market leadership in the Japanese photobooth market with an acquisition, continued to roll out laundry units with existing and new location partners, commenced a share buyback programme and gained entry into the FTSE 250. 2023 was a year of significant strategic and financial progress, with sales up 15%, EPS up 31% and net cash main

PROGRESSIVE: Zoo Digital: Recovery underway and a significant contract

Today’s trading statement from ZOO highlights a ramp-up in demand following the end to the industry-wide strikes of last year. ZOO struck a note of caution in its January update regarding the timing of orders. However new productions are starting to translate into a healthy order pipeline, with a good recovery in revenue anticipated in H1 FY25. The update guides to revenue of at least $40m for the year to March 2024, ahead of our estimate at $36.8m. We have improved our adjusted EBITDA loss marg

Inchcape (INCH LN) - Strategic progress, strong returns

Inchcape’s interim results for the period to 30 June show strong revenue and profit increases, supported by major acquisitions and robust organic growth. The Group’s market-leading, digital-led approach continues to drive positive trading momentum. Inchcape expect FY23 results to be at the top end of current consensus ranges, so we upgrade underlying PBT estimates by 2.8% to £500.8m and see further potential for high quality earnings growth. Trading on 9.3x FY23 earnings, we think Inchcape share