numberbiter
23 Aug 2017
Re: I'm going in I recommended a sell on 15 March (3,905p), on 23 June (3,959p) and 28/6 3,963p). Today they are 3.800p. There are bound to be further falls in the medium term, because this company's management have lacked innovation for several years. The only new product has been cheep micro rooms (much smaller than student rooms at university), but this concept have limited growth potential. Costa is looking very tired and is on the decline because of no new ideas nor refurbishment. It is a cash cow, but the cow is getting very old! Time to move out and invest in a more innovative company.
gamesinvestor
20 Aug 2017
Declining Growth [link] graph showing the declining like for like growth at Costa is quite telling in it's 5 year steady consistency.I'm not sure telling the public a nice story about the history of it's coffee making is going to do it for the public. Costa will still have to compete in an ever more crowded market.I think the novelties look like a distraction and they are going to have to package products better to win over customers as the individual prices of the products are too high in a stretched consumer market.Alison's £150M cost cut is all very admirable, but it only effects the short term, you can't keep cutting costs.Costa still has a battle on it's hands here.Is Costa also starting to cannibalise it's own sales with too many outlets in each location area?Greggs is doing a roaring trade with it's new meal deals -- is this also making an impact?Is Costa still that special a place to sit in to be paying a premium price anymore?Games
Hardboy
15 Aug 2017
Re: share perk Mine are held in my ISA & I get the card OK. Excellent breakfasts in Brewer's Fayre, made more pleasing by getting the discount.
Kool Keith
14 Aug 2017
share perk Hi, I've had the shareholder perk before for Whitbread but when recently sent a reminder via iii I've been informed I'm not entitled to it as the shares are held in my SIPP. Why would this be an issue, is this an issue?Anyone else had similar experiences with either WTB or other companies when shares are held in a SIPP account?
Triggers broom
11 Jul 2017
Re: I'm going in This is the MSE poll I referred to and the comments on the Facebook page at the time were a great advert for Premier Inn.[link]
Uncle Doug
11 Jul 2017
Re: I'm going in Good to read your personal insight on Gatwick PI and the Martin Lewis info. If they can keep customers happy then they'll win plenty of return trade. I like the oft quoted stat that if there was a Starbucks, Costa and Cafe Nero next to each other in the High Street then the vast majority of customers would choose Costa. Must be doing something right. Very good value here at £38.
Triggers broom
10 Jul 2017
I'm going in I've been watching WTB for 2 years now from £52 down waiting for a) spare funds and b) the "right" entry level price.Well that time is now upon me and WTB is about to replace the uber munter WTG in my Alphabet ISA. The tipping point for me to invest was several months ago when we stayed at the Gatwick North PI. We've stayed in numerous PIs around the country and they are always top of the pops for their beds and breakfasts. The on site restaurant Thyme at Gatwick was also excellent and we will book here again any time we need to use Gatwick.Chuck in a recent Martin Lewis poll about UK hotel chains being almost universally positive about PI and the omnipresence of Costa in UK high streets, petrol stations of Costa and I'm in for the long haul.
Bill1703
30 Jun 2017
Top 10 Stocks for 2017 - H1 Update Having reached the end of Q2 and therefore H1 2017, it is time again to "own up" on YTD performance for my previously published 2017 Top Ten...Having just edged ahead of the market at the very end of Q1, the list has spent most of Q2 outperforming decently, albeit somewhat erratically with different stocks putting in a strong run at different times, only to fall back again. But despite a weak-ish end to the quarter and first half, I am pleased to report that it is still up 4.4% overall YTD (vs +3.1% at end Q1)... outperforming the FTSE100 by 2.0% and the All-Share Index by a slightly slimmer 1.0%.Star performer is now Capita - would you believe - up a full 30% YTD (and of course, the only one of the Top 10 I still don't own myself). The erstwhile magnificent Card Factory (+17%) has lost some of its lustre but holds on to a solid second place. After that, other decent returns were recorded by Vodafone and Bonmarche (both up c.9%) and Whitbread (up 5%). Braemar and Sainsbury's have just about held onto positive gains (up 1-2%), albeit a tad below the market, while my three "losers" are now Imperial brands (-3%), ITV (-12%) and Stagecoach (-13%, most of it in recent days - annoyingly - post underwhelming figures). For full disclosure, I continue to (mostly) happily own nine of the 10 stocks - I may now have missed the boat with Capita, though wouldn't be amazed to see it track back again with a number of outstanding issues still to play out. And I have recently doubled up on my holding of ITV, which is looking more and more the outstanding value play for H2 2017 (and a nice overseas take-out bid wouldn't go amiss).Even in the current fragile and nervous market I remain optimistic for H2 - though I should probably bite your hand off for another half of marginal outperformance... god knows, it's good enough for most professional managers (and better than many can manage), and my fees remain highly "competitive" (I know my worth, or lack thereof).
tomox
29 Jun 2017
Re: The effect of cost cutting I disagree.I cannot see any link between cost cutting and staff not washing their hands after using the toilet.It was a shocking report I agree, but if there is any comfort it is that in other areas measured, namely tray and table cleanliness, Costa fared rather better than both Starbucks and Cafe Nero. It was also pleasing to note that management seem to have taken prompt action to correct the problem, so I cannot see any effect on Costa's future prospects - one way or the other so do not see it as 'further evidence'.
numberbiter
28 Jun 2017
The effect of cost cutting In a recent environmental health check, seven out of ten samples of Costa ice were found to be contaminated with bacteria found in faexxs This is further evidence that Costa is in decline.
numberbiter
27 Jun 2017
Re: HL view Hardboy, the difference is that Mc Donald's continue to invest and are constantly coming up with new products and new gimmicks to keep punters interested. They also invest heavily in advertising to let everyone know what their new product is. In reality, often the difference is slight, but with chances to win money (for example) the punters keep rolling in, Likewise KFC advertises its new ideas, even if means only a free drink or whatever.On the other hand, Whitbread does not invest in its Costa brand, arpart from putting vending machines into garages. The shops are tired and the products have not changed in years.There is not even an attempt at innovation,The difference between McDonalds, KFC and Costa might only be subtle, but it is also significant. Investors should wake up the management team; they are letting them down. At 3,975p these shares are still overvalued.
Hardboy
23 Jun 2017
Re: HL view NB: "Costa are very close to the peak" - Maybe in the UK, but there is still plenty of scope for growth internationally. Ad whilst you are right about product lifestyles there are exceptions that defy the rules (mainly food & drink related.) I have no idea about whether or not these businesses have peaked or grown; but McDonalds, & KFC, how long did they grow? And without significant change to the core offering or branding.
numberbiter
23 Jun 2017
Re: HL view The key issue here is 'product life cycles'. A new product will initially grow rapidly and will continue to grow at a slower rate. There always comes a time when growth ends and decline sets it, The key to good management is to sell the business while it is still growing but before it hits its peak. When Whirbread got out of brewing and into coffee they did that,Unfortunately, the current management are not as cute and Costa are very close to the peak. You can always see when this is the case; investment is cut back and cost savings are made to try to improve profitability. But it doesn't work! As another poster pointed out, Costs Coffee shops have not been refurbished and are looking very tired. Worse staff has been cut, which means customer service has been reduced to unacceptable levels. I recently visited a Costa at lunchtime, the solitary assistant could not cope and after a fifteen minutes wait half the queue (me included!) left the shop without buying anything, Costa is only a few months away before decline sets in. Once it starts the decline will accelerate.It now seems that three Premiere Inn hotels have unsafe cladding and while there are much better safety features than in high rise social housing, there will be a dispute between the company and its contractors. This will dilute management time further.To go forward the company needs a new innovative product. They came up with Premier Inn Hub and while this was innovative, growth will be limited.With Costa in terminal decline, lacking investment and staff, the company will find it hard to achieve any significant growth. On this basis the shares are over-priced.
Hardboy
22 Jun 2017
Re: HL view Thanks for posting that, nk, a reasonably balanced view; but I do wish financial commentators who Should know better refrained from comparing % growths from different base points.When turn over is low, large % growths are easy.If something grows from 10 to 11 it has grown 1 unit and 10%. If years later it grows from 100 to 105 it has grown by 5 units - 5 times as much; but only 5%. because it once grew at 10% and now at 5% it does not mean that the growth has halved!
nk1999
21 Jun 2017
HL view "20 years ago over 50% of Whitbread revenues came from brewing and pubs. Today, pubs are off the menu (bar those supporting the hotel estate), while brewing is long gone. In their place are 2,270 UK coffee shops, and a 69,000 room hotel estate. Quite the transformation. Costa revenues grew from £143m in 2005 to £1.1bn in 2015, compound annual growth of 23% a year, while Premier Inn checked in growth of 12%. Recent performance is still respectable, but notably slower. There are a number of short-term reasons for that, ranging from weakness in the London hotel market to lower city centre footfall hitting Costa's high street shops. New products, including self-service coffee machines and the stripped down 'hub' city centre hotels, may go some way to alleviate those pressures. However, Whitbread is a more mature business now, and that has inevitable consequences for growth. There's still room for both brands to grow domestically, with less than 10% market share in key segments such as London hotels, but UK growth is unlikely to be as rapid as it once was. Costa in particular might be bumping up against the edges of the tank in some areas. The UK's thirst for coffee may be insatiable, but demand for coffee shops isn't, and Costa's recent growth has been driven by new store openings. Overseas expansion seems a reasonable response. Premier Inn's international business has been rebalanced, focussing future efforts on Germany where initial signs are good. Costa is further down the international road, and already turns a small profit on its overseas operations, with positive noises coming out of China too. We see no reason why both couldn't sell as well internationally as they do at home, but building international brands from scratch takes time. In the immediate future the challenge will be guiding a more mature UK business through less favourable economic conditions Prior to the results announcement Whitbread shares were trading on a prospective yield of 2.6% and a price to earnings ratio of 14.7 times (a 16% discount to its five year average). "
