What the Sunday papers said - 28 October
The Sunday Times
Whitbread is expected to shelve £70m of new ventures to offset losses caused by the downturn that followed the September 11 terrorist attacks. Its Marriott division is also expected to announce that 300 of its 11,000 staff will be made redundant when the leisure company reports interim results on Tuesday. Two key developments, one at Whitbread's former London brewery and a £20m hotel in Leicester, are expected to be postponed indefinately, along with a number of smaller projects.
Ernst & Young's latest quarterly profit warning survey says the British economy is sinking further into crisis with the worst still to come. There were 135 profit warnings in the third quarter of the year - the highest number recorded since the survey began in 1997. It predicts 150 in the last quarter.
The Sunday Telegraph
Red tape is costing small businesses an average of £9,000 a year according to a new survey by Peninsula, Britain's largest employment law firm. The cost of the minimum wage and the working time directive as well as numerous health and safety requirements have all contributed to the esculating cost. The survey also said nine out of 10 businessmen believe Britain's "compensation culture" is running out of control.
The Observer
Belgo, the mussels-and-chips restaurant founded by Luke Johnston is struggling to unmask the mystery investor who this month became its biggest single shareholder. Kintoro International increased its stake from two to 14 per cent after buying shares sold by Zurich Financial.
The Mail on Sunday
In a news feature, the Financial Mail tells the story of Les Brooker, a licensee who runs the White Horse pub in the Hambrook area of Bristol. Mr Brooker recently took his landlord, namely Unique, to court over his annual rent hike from £20,000 to £24,000. He challenged, won, and subsequently had his rent reduced to £16,000 per annum. Many in the industry will already know of this case but The Mail claims it will have massive implications for pubcos, especially Punch, which intends to float both its leased and managed businesses next year. The article says the guaranteed income that pubcos use to generate huge sums of finance (Punch has borrowed £1.5bn) no longer looks so guaranteed. If licensees across the country follow Mr Brooker's lead when their rents are up for review, UK pubcos could see a big drop in annual rental income. This would seriously affect the value of company going to the market, such as Punch. Hugh Osmond, Punch's founder seems unimpressed: "The whole thing is complete piffle. A local judge has gone off on a frolic. It's just an irresponsible, daft judgement in a junior court. If you were to ban upwards-only rent reviews it would crater the entire UK property market."
Elsewhere, shares in Greene King are tipped as a long term 'buy' in the Mail's "Midas" sharewatch column. The days when the company was regarded as a sleepy regional brewer are long gone and it is now one of the fastest growing companies in the sector with further possible acquisitions in the pipeline. Interim results next month should "confirm the company as a solid choice in a still uncertain stock market".
The Companies & Markets section confirms that Whitbread will dispose of its poorly performing Pelican brand of restaurants, as reported previously on thePublican.com.Pelican includes the Cafe Rouge and Bella Pasta chains.
The Independent on Sunday
No industry-related news
The Sunday Express
The Markets page backs Majestic Wines as a 'buy' at 320p, pointing at its recent earnings-enhancing £7.25m acquisition of four retail warehouses in northern France, which will give the group access to the lucrative UK booze cruise market. Half-year trading was buoyant with like-for-like sales up 13 per cent.
