I'm running late today, so please update this report later afternoon, as I'll be adding sections throughout the afternoon. I'm currently imprisoned for the day in my London abode, as our affable but incompetent handyman is currently making his third attempt of the year at painting our doorstep. So due to wet paint, I can't leave the house, unless I miraculously find a pair of those spikey shoes at the back of a cupboard. Or perfect the art of levitation.
To keep you busy until today's report is finished, please make a start on Friday's report (which I wrote yesterday evening), which is here. I looked more closely at exchange rates, and I fear for the impact on retailers in particular in 2017.
Interestingly, I've also seen some recent data/commentary suggesting that consumers are less interested in buying stuff, with wardrobes bursting at the seams with clothing & shoes, after years of heavy buying. Consumers appear to be focusing more on experiences, such as nights out. So I think bars & restaurants are looking a more interesting area to focus on, although care is needed as some of the older bar chains have horribly structured, and expensive debt (e.g. Punch Taverns (LON:PUB) and Enterprise Inns (LON:ETI) ) and are killing many of their tenants with unbearably high rents - not a sustainable model at all.
However, I do very much like the format, and figures at Revolution Bars (LON:RBG) (in which I hold a long position) - which is completely ungeared, and is generating tons of cashflow to fund its future roll out. The price looks far too low to me (fwd PER of 9, with no debt), for a self-funding retail roll-out. This one appears to have simply been overlooked, as a relatively recent IPO which many private investors may not be aware of yet. So I think that's a really good one to check out. The recent results presentation slides are very interesting, and are here.
Note that 60% of the customers are female, with a premium, high margin drinks (cocktails) and food offering. Also, with new sites costing around £1m to fit out, this puts them well above the run of the mill bar offering. Rental deals seem good value, as…