numberbiter
07 Nov 2017
Re: Hotels Growth - Good for Premier Inn Costa coffee shops may be full, but the market has reached saturation point, so there is no further growth. As I have said many times before, here we are dealing with the concept of the 'product life cycle'. Selling coffee is a mature business and is at the beginning of the downward curve. There is no new innovation, so things can only get worse. The only plan they have is to sell 'specialist' coffees at inflated prices, but this isn't new - Starbucks have been doing it for years,On top of this, Premier Inn is not a new concept and is beginning to get stale; in the past (Costa and Premier Inn) they have what is known as 'cash cows', which means they are at the mature spectrum and generating plenty of cash, but not being developed. What needs to happen is that a percentage of the cash generated by cash cows is used to develop innovative (and therefore 'new') products, but it hasn't happened. Without new management, Whitbread will enter a period of decline, which will accelerate unless something is done.
numberbiter
07 Nov 2017
Re: Hotels Growth - Good for Premier Inn Sorry, Lupo you did. See your post 24/10/17. Well, actually you didn't, you were quoting somebody else. So somebody else was right, not you! I recommended selling at 3,724p. As they used to say in 'Are you being served' "going down'.
Dogberto
07 Nov 2017
Re: Share price I’m staying long - market has this one wrong IMO DYOR
Bill1703
07 Nov 2017
Re: Share price "... just sold a big PUT option on WTB..."So you must think the WTB SP is going to rise from here, Games? Otherwise you might be BUYING a big Put option (or selling a Call option... etc).Then again - it's been a while since my last derivatives course....
gamesinvestor
07 Nov 2017
Re: Share price "and I can say that (in the nicest possible way) I HOPE you never get to buy WTB!"Bill -- just sold a big PUT option on WTB at 2800 -- lol !!Games
Bill1703
02 Nov 2017
Re: Share price "I can see Whitbread moving to a 10-12 P/E before it's finished, a bit like Next and a bunch of other companies that look susceptible to consumer belt tightening... I'd be a buyer at 2800 -- so I may never be one of course, but that's OK..."The difference between NXT and WTB, Games, is that NXT overall profits are now in absolute decline, with no immediate sign of this reversing... whereas overall sales and profits are still growing pretty decently for WTB.And while the market obsesses too much with partial metrics such as LFLs, and any suggestion of slowdown thereof, these are still positive for WTB - albeit slowing from previous levels - while NXT has been posting fairly big negative LFLs for some time, in at least parts of its business.So 10-12x P/E would be perverse against a market average of, say, 15x, when overall growth rates remain at least in line with the market average... even without any premium accorded for the track record of superior growth in the recent past.But things can change, of course... which is why I'd "never say never" to you getting your £28 here - just as I won't say that John Kingham will never get his chance to buy ULVR below £23. The market has a (nasty?) habit of giving you exactly these sort of chances, just when you might think they have gone for good...But I can say that it's unlikely (IMHO) that Kingham will get ULVR below £23... and I can say that (in the nicest possible way) I HOPE you never get to buy WTB!
gamesinvestor
01 Nov 2017
Re: Share price yellow - it's all about expectations and despite a continued expansion plan, the existing outlets are not growing as fast as those set expectations. The concern is that there may be a curtailment of the expansion if the existing coffee shops and hotels look less profitable and that will flatten out the future EPS growth.It's all nonesense of course because there are miriad ways to value these companies and each method comes in and out of fashion faster than Guy Fawkes does on November the 5th.It appears you either believe in the Whitbread story or you don't.Looking at the general market, everyone worries about a big correction, when in fact most companies are being corrected on a one by one basis as they report results or issue trading statements -- in every case, good or bad, the market seems to want to sell it off and then it recovers a bit more until the next rather nothing announcement.I can see Whitbread moving to a 10-12 P/E before it's finished, a bit like Next and a bunch of other companies that look susceptible to consumer belt tightening and no doubt eveyone will blame it all on Brexit, when in actual fact it's more realistically happening because everything has been pumped up.I'd be a buyer at 2800 -- so I may never be one of course, but that's OK.Games
yellowrocks
01 Nov 2017
Share price I frequently stay at Premier Inn and eat at Brewers Fayre next door. Both are always full, so wha t is affecting share price
shieldbug
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn "Last year the artisan bakery and coffee outlet next door shut down "A lot of these places are personal dreams. When the reality of paying wages and rent kicks in its not always so easy. Marketing a small company is really hard when you are competing against corporations. Some will work but many will struggle. The fact is that national advertising campaigns are effective.
shieldbug
26 Oct 2017
Note on Costa's roastery Truck deliveries to the Lambeth roastery were made to Newport street where a forklift would come out into the street with a couple of guys holding lollipop signs to halt the traffic. Once the forklift had grabbed a pallet and darted into the railway arch the traffic was allowed past. Imagine that for a FTSE 100 company receiving its primary consumable in 2017.This was happening until they moved to the new roastery in March this year. Apparently green coffee beans arrive at Tilbury, 14 miles from the new roastery. The company says there are training facilities in Basildon to train 3,000 Baristas each year. Costa may well be poised to up their game, improve service, productivity and hopefully profitability too.
Lupo di mare
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn Interestingly, I note that Finland consumes the most per person. Now anyone who follows my admittedly entertaining, foresightful and informative posts will know, the missus is from Finland. When she first came to this wonderful (still) country that we're so fortunate to be nationals of, she'd have coffee first thing in the morning. I weaned her off the stuff, so now she has tea first thing.The other side of the saucer is that I now have coffee first thing....:/Not the most useful post I admit, but I'm waiting for the gal from Funland to bring me my mid-morning coffee. I usually do the honours.
Bill1703
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn "It's very difficult to pick a typical town. They vary so much. As do coffee shops." Thanks all - I think we have successfully put into perspective any narrow parochial focus on individual personal experience. It all suggests plenty of life in the Costa story yet... if coffee is already in decline, as NB portends, it is reflected neither in anecdotal evidence nor in the numbers. Just as the numbers don't bear out NB's charge of failing to invest in Costa... when he condemns lack of spend and others caveat high ongoing capex, someone must be wrong! Now, if only we had people on the ground in China to feed back how the Costa story is going down there... but this much we do know, the Chinese are about as far away from "peak coffee" as we are from "peak disdain of politicians" (that's quite a long way, for the avoidance of doubt). And with the UK running only at 45th in the 'coffee per capita' stakes, I don't see it here either, not quite yet."Oh dear - what does that say about me? I've never had a Costa Breakfast; but frequently when I'm out & about I have a 'Spoons breakfast."Rest easy, Hardboy... I've never had a Costa one either, but I did hugely enjoy a Spoons experience earlier in the year... formidable fry-up for a fiver, plus a well-received pint (exceptional circumstances you understand, not my normal routine - okay!) And I am neither that old nor anywhere approaching "down market", in all objective reality...But as TomHB says, they are serving two different markets.... I know plenty of people (mostly younger) who are confirmed Costa converts but wouldn't be seen dead in front of a 'Spoons breakfast (as, I believe, quite a few people actually are...)
tomhawbuck
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn We generally go to Spoons for breakfast when we are off for a day's walking. I can recommend the ones at Liverpool Street and Victoria and Eastborne. My son was in hospital in Leeds a couple of years ago and visiting hours weren't until the afternoon, so we sat in Spoons at the station and watched. The first group of people who came in were chaps who clearly liked to start the day with a beer, followed by a band of Leeds United supporters getting beer and a fry up before setting off for a hard afternoon on the terraces. Then came some serious breakfasters and finally about 10.30 pensioners started arriving for coffee and cakes. We had to leave before the lunchtime crowd arrived. Spoons clearly know what they are doing.....
Lupo di mare
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn Just like to add to the small towns figures: a very small town near where I live had a few coffee shops (enough, IMHO) and along came a Costa. Hoho, what an outcry there was - and is.Love the idea of having a Spoons brekkie whilst checking the maket on the laptop .
Hardboy
26 Oct 2017
Re: Hotels Growth - Good for Premier Inn Tom,"Spoons (breakfast) clients are slightly older and slightly more down market than the ones who frequent Costa."Oh dear - what does that say about me? I've never had a Costa Breakfast; but frequently when I'm out & about I have a 'Spoons breakfast. Though I must admit I'm usually the only person there using a lap top (checking market opens, don't you know) when I'm in. The wifi is an added attraction to the value for money.
