Steve Magnall takes St Peter’s Brewery top job: Award-winning St Peter’s Brewery has announced the appointment of Steve Magnall as its new chief executive. Magnall will lead and develop business for the Suffolk based brewery when he takes over from Colin Cordy, who is retiring. Previously managing director of Thwaites Beer Company, which was recently sold to Marstons for £25m, he has also worked as deputy managing director at Greene King and is a non-executive director of Cask Marque. Magnall said: “I am greatly looking forward to developing the St Peter’s brand even further through both its beer and retail formats. Without question, St Peter’s is a fantastic brand which produces a range of award winning beers -whether gluten free, organic, golden, ruby red or any of the others in the range. This is a true sleeping giant of a brand.” St Peter’s chairman, John Murphy said: “I and the rest of the team are delighted to welcome Steve to St Peter’s Brewery as our new Chief Executive Officer. His record is impressive and his knowledge of our industry is unmatched. He is brimming with ideas and, after more than twenty years of business, his vigour and enthusiasm is just what we need. We are very excited to see where he will take the business.” Founded in 1996, St Peter’s Brewery is based in former agricultural buildings at St Peter South Elmham, near Bungay in Suffolk. Its own deep borehole provides high quality water and locally malted barley is used together with UK hops to produce a range of classical English cask-conditioned ales and distinctive bottled beers.
Douglas Jack – trading has weakened in Wetherspoon’s Third Quarter: Numis Securities leisure analyst Douglas Jack has issued a reduce recommendation on Wetherspoon shares, with a price target of 680p, after weakening Third Quarter trading. He said: “Trading weakened further in Q3 (the 13 weeks to 26 April), with LFL sales slowing to 1.7% (H1: 4.6%), with margins falling 50bps, compounded by additional breakfast/coffee discounting and weaker LFL sales. We are holding our 2015E forecast, which anticipates LFL sales growing by 3.5% and margins falling 85bps to 7.35%. LFL sales slowed to 1.7% in Q3, featuring a 1.6% increase over the first six weeks and a 1.8% increase over the last seven weeks. LFL sales are benefiting from slightly easier comps (Q1 3.7%; Q2 6.7%; Q3 6.2%; and Q4 5.2%) and increased promotional activity, particularly for breakfasts/coffee. Year-to-date, LFL sales are up 3.6% with total sales up 7.9%. The company started its attempt to boost early morning food trading on 18 March through discount-driven coffee and breakfast campaigns. We question whether the resultant volume growth will be sufficient to offset the inevitable hit on margins. Ebit margins fell 50bps (to 7.5%) in Q3 with low price increases (1% on drink) having hurt margins more than they benefited volumes. Due to LFL sales slowing, annual drinks price inflation remaining at 1% during February and March, as well as further dilution from discounting breakfasts, we forecast Ebit margins to fall 85bps (to 7.35%) over the full year. Since 1 January 2015 we have cut our 2015E forecast by 8% (PBT from £84.7m to £77.5m; consensus £78.0m). For 2016E, our forecasts assume Ebit margins fall by 5bps (consensus: flat). We believe there is downside risk to these assumptions, with the company citing “increased competition from supermarkets and restaurant groups, together with additional staff and repair costs”. Our 680p target price equates to 8.1x EV/Ebitda, above the company’s 7.5x historic average rating even though prospects are below-average. For example, average Ebit/pub has increased by a total of just 2% over the last 12 years; whereas average Ebit/pub fell by 5% in H1 alone.”
