Leisure & the Brexit vote – Assessing the Impact
The initial financial impact.
- 52% of voters (38% of the electorate) voted to leave the EU on 23 June
- The FTSE100 fell then rose. It is now +3% since 23 June.
- But FTSE100 is an international index. In US$ terms (pound down 13%), it is down 10%.
- The largely domestic FTSE250 is down 9% in Sterling terms and down 21% in US$s
- International earnings are worth more in Sterling terms
- But UK-centric companies face an uncertain short & medium term future
Is there any tangible, on-the-ground evidence?
- Companies also lack visibility
- The Construction PMI was poor but the Services PMI wasn’t too bad
- Both were 80% pre-Brexit vote measures
- In the near term, the movement of Easter (April to March), the slipping of the Half Term holiday into June & the football could hinder analysis
- Additionally, last week was the hottest of the year in 2015. Hence pubs faced tough but restaurants (and cinemas etc.) faced soft comps
Young & Co.
- It may be misleading to micro-analyse
- But Young & Co today said that it was +4.1% LfL at wk13 (to 27 June).
- It had been +5.3% at wk7 suggesting +2.7% in the last 6wks
- Anecdotally May was > April hence the slowdown was June
- June faced tough weather comps but should have benefited from the football
- Very hard to conclude but caution seems to be the watchword
- Re business. Comment on business confidence => investment => employment will be critical. The outlook here, given uncertainty, is tricky.
- Re consumers. Employment trends => confidence => spending patterns. See ‘business’ above.