Acute distress, busts likely, RTN, C&C, DOM, DPEY, City Pub Group etc.:

A DAY IN THE LIFE:

Minus 1.4 degrees and frosty out there but, as nobody seems to have told Mother Nature that we humans are having a bit of a crisis, the grass keeps growing.

Indeed, it needs cutting.

But, as I’m not sure the thing will start, I’m pondering how easy it would be getting someone out in this environment to mend the mower and its seems a better idea to sit in the sun and finish off The Old Man and the Sea.

And yesterday, at least, it was too hot to sit in the sun and too cold to sit in the shade. This was distinctly odd but, on trying to explain this to the dog, he feigned disinterest and continued to lay in the full sun and try to extricate unmentionable things from his unmentionables whilst keeping half an eye open for rabbits.

Look out for tweets on #brumbymark and let’s move on to the news:

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CGA COFFER PEACH TRACKER – WEEK TO 22 MARCH: Whilst there will shortly be very little to track, last week’s tracker is out. 27 March 2020:

Headline numbers:

• The Coffer Peach Tracker has been run weekly recently. In the week to 22 March, sales across the operators tracked fell by 71% on a LfL basis compared with the same week in 2019. See Premium Email

ACUTE DISTRESS – CORONAVIRUS & CASUAL DINING:

Carluccio:

• See yesterday’s tweets below forthcoming results. Feedback welcomed, please.

• Yesterday we tweeted that we were seeing the first signs of acute distress. We mentioned ‘Byron brings in KPMG (again) to assess its options, Carluccio to pay staff 50% for March, says it has exhausted its cash reserves. Even JDW won’t pay suppliers. Some may not last past next week.’

• Carluccio has made some difficult decisions, Byron has called in KPMG (again) and even JD Wetherspoon has said that it will not pay its suppliers. See also yesterday’s Covid-19 tweets (under forthcoming results in today’s email).

• Carluccio says it is doing ‘everything we can’ to ‘determine a way forward’. It has told staff that they will only receive 50% of their March wages and CEO Mark Jones is not taking any salary for the month. Mr Jones told staff he knew the announcement would ‘be a terrible shock to all of you’ and says ‘I’m so sorry that we have had to take these actions and I deeply regret the impact this is having on you all.’

• Mr Jones told Caterer magazine ‘the entire restaurant sector is facing unprecedented challenges and Carluccio’s is no exception. These are difficult and very challenging times for our team, but we are doing absolutely everything we can and the Carluccio’s board is in constant talks with its stakeholders [Carluccio is owned by the Jagtiani Foundation] to determine a way forward.’

• Carluccio will be seeking a way to secure funds in order to pay some or all of its rents and any outstanding supplier bills and other costs. Some 80% of its wage bill will be covered by government – but the funds there are not immediately forthcoming.

• Carluccio’s underwent a CVA in May 2018.

Byron:

• Byron is reported to have brought in KPMG (again) in order to explore options for accessing emergency funding. That will be a first for the accountants who advised Byron on its CVA in 2018.

• Sky News reports that Byron is ‘understood to be keen to “furlough” the majority of its workforce by accessing the Coronavirus Job Retention Scheme, which has been set up to pay up to 80% of employees’ wages- with a ceiling of £2500-a-month.’

• Byron will be ineligible for access to the £330bn Covid Corporate Finance Facility established by the government to provide cheap loans. It will have to use its own resources and find funds from somewhere else. Byron told Sky ‘in common with most businesses in the sector we are actively exploring the recently announced government support initiatives and have engaged KPMG to help with this.’

• Colliers International has claimed that, since 2016, 13 out of 23 large businesses to have launched CVAs have gone on to file for administration.

Restaurant Group:

• Yesterday The Times broke the story that ‘Chiquito is poised to become the first big restaurant sector casualty after its owner filed a notice of its intention to appoint administrators, putting up to 1,500 jobs at risk.’

• The Mexican brand is a part of The Restaurant Group, which is also to put Food & Fuel, a brand it bought only 18mths ago, into administration. RSM is to handle the process. Chiquito has 61 outlets. Food & Fuel has 11 gastropubs. The Times reports that RTN’s Brunning & Price operation is unaffected. RTN says ‘the decisions have been incredibly difficult and we recognise the significant impact on all our colleagues that are affected.’

PUBS & RESTAURANTS:

Staffing & tenant support:

• Shepherd Neame has announced that it will make none of its staff redundant but it is to put around 85% of its staff on furlough. They will receive 80% of their salary up to £2,500 per month. Shepherd Neame will make up salaries of those over £30k in order that they too receive 80% of their pay.

• Higher paid members of staff who carry on working will take a pay cut of between 10% and 15%. The directors have volunteered to take a 20% reduction in salary. CEO Jonathan Neame says ‘I am incredibly proud of our people, who have shown great spirit, great dedication to the Company and have been a great support to each other in these challenging times, as we all adapt our lives to support the national effort.’ He says ‘as soon as the situation improves we will focus our efforts on resuming normal activity and look forward to welcoming our team members back at that time.’

• Hall & Woodhouse has cancelled all rent and service charges for its tenants for 8wks from Sunday 22 March. The company says ‘we are committed to providing our Business Partners with the financial support and advice needed to help them through this period of uncertainty and felt it was only right to take immediate action.’ It adds ‘we are grateful to the Government for making available employee retention support, as well as providing business interruption loans or grants to our Business Partners, but we feel it is only right that we enhance our help given.’

• Having initially said it would not pay employees until it had received the 80% of their wages promised back by the government, JD Wetherspoon is to pay its staff for work done last week today.

Today’s announcements:

• The City Pub Group has announces a Placing and Open Offer to raise up to £22 million to shore up its balance sheet & give it ammunition for acquisitions. It will raise the money at 50p per share. The group’s shares were 220p only three mnths ago. The placing will be via an accelerated bookbuild process.

• City says ‘the net proceeds of the Placing and Open Offer will be used primarily to strengthen the Company’s balance sheet and also, should the right opportunities arise, to expand the Company’s portfolio of pubs at a time when the Directors’ believe acquisition prices will be reduced in the short term.’

• City says it will be making use of the government’s ‘furlough’ scheme and it is cutting costs where it can. It says ‘it is important that the Company maintains a nucleus of experienced staff who Directors’ believe will help the business to hit the ground running when normal trading conditions return.’ The group’s units are now shut but, in the 11wks to 15 March 2020, they had traded down 4.5% on a LfL basis.

• Domino’s Pizza Group updates on trading saying that ‘in our core UK & Ireland business, trading in January, February and the first two weeks of March was in line with our expectations.’ It says ‘this LFL sales growth has been driven by growth in items per order and therefore higher overall ticket, arising from both the shift from collection to delivery as well as a change in consumer purchasing behaviour.’

• DOM says that now ‘we have moved to entirely Contact Free Delivery, adding additional peace of mind for our customers and colleagues. At the start of this week, we also took the decision to stop in-store collection orders, to further protect colleagues and customers. Collection typically accounts for around 20% of sales, however so far we have seen the growth in delivery more than offsetting the lack of collection sales.’

• DOM says ‘we are taking a cautious and prudent approach and therefore the Board has decided to suspend the final dividend payment of 5.56p that was announced as part of our full year results on 5 March 2020. The Board will keep this matter under review in the coming months.’ Re the outlook, it says ‘we are unable to provide guidance for the remainder of the current financial year’ but adds ‘we will keep the market updated on developments as appropriate.’

• DP Eurasia has reported FY numbers to end-Dec last year saying it increased store numbers, sales and group EBITDA.

• But last year’s numbers mean less than they otherwise would and the group goes on to say ‘the robust like-for-like growth in Turkey experienced in Q4’2019 has continued into the current year.’ It adds ‘the Group is focused on addressing the issues and challenges in Russia, including appointing new management and adopting a new marketing strategy.’

• Re the outlook, DPEU says ‘whilst the Group remains comfortable with its medium-term financial guidance, the Board is mindful of the considerable current uncertainty surrounding the spread of the COVID-19 outbreak and its impact on the business and wider economy in the countries in which the Group operates.  Therefore, the Board is not in a position to provide meaningful guidance on the likely financial and operating results for the current year.’

• C&C has announced that it is raising €140m in a US Private Placement. C&C says ‘the unsecured notes, which represent C&C’s debut issue in the USPP market, have maturities of 10 and 12 years.’ CFO Jonathan Solesbury says ‘we are very pleased to have successfully completed our first US Private Placement, particularly against the backdrop of the current market uncertainty. The issue extends the maturity of our debt as well as diversifying our capital structure. It gives the Company access to a broader range of funding options in the future.’

• Coca-Cola HBC AG has updated on the Covid-19 situation saying that this ‘is an unprecedented event that will in some way touch everybody on the planet.’ It says ‘trading in January and February was in line with our expectations. During March, trading across our markets has been dependant on the severity of restrictions on mobility. In markets with heavy restrictions, such as Italy as well as central and southern Europe, demand in the ‘out of home’ channel has been severely affected. In these markets, ‘out of home’ represents c. 35-40% of sales.’

• Coca-Cola HBC says it is looking at cost-saving measures and reassessing marketing and capex investments. It says ‘it is still too early to quantify the impact that the COVID-19 pandemic will have on our full year 2020 results. Given the uncertainty of the duration and economic impact of this global pandemic, we no longer believe that it is prudent to provide guidance for the current financial year.’

Other news:

• Around 45 leisure companies have updated the market on trading over the last working week. Most restaurant, travel, hotel and gym companies have said the inevitable. Trade has fallen to virtually nil and the companies are unsure when the situation will return to normal. Nor are they sure what normal will be.

• There had only been two fund raisings to date, SSP and Ten Entertainment. Today, City Pub Group raises money and C&C accesses debt, Other companies have drawn down debt facilities. Others will be looking for covenant waivers and possible increases in their facilities. No money promised by government has yet changed hands.

• Inflation down the line. Government borrowing makes this likely. Aldi is giving bonuses and in the US, NRN says ‘Chipotle Mexican Grill said it is giving hourly workers a 10% pay increase through April 12, joining other restaurant and supermarket chains offering so-called appreciation pay for employees serving consumers during the novel coronavirus health crisis.’ Somebody will end up having to pay for all of this.

• NRN reports that Domino’s in the US has hired 10,000 staff in recent days.

• The BBPA has welcomed the Chancellor’s moves to support the self-employed saying ‘85% of pubs are small or medium sized businesses run by independent operators or licensees who are self-employed, so the Chancellor’s support package today is welcome.’ It says ‘ongoing support from Government is still required throughout this crisis to sustain our great brewing and pub sector through this unprecedent lock down, so that when we are through this, pubs can return to being the heart of communities up and down the country.’

• Intu says 29% of the rent due last Wednesday was paid. Though they are simply complying with their contracts by doing so, one is tempted to ask just who made the decision to pay and why?

• Mintel has reported that the UK foodservice industry was dealt a ‘hammer blow’ when consumers were first warned to stay away from pubs and restaurants and then both sets of operators were ordered to close. Mothers’ Day, where cancellations had been accelerating for some time, was therefore a complete no-show as units were closed.

• Mintel says ‘the decline in dine-in sales will make launching home delivery services more urgent than ever before. Partnering with popular third-party delivery apps, such as Just Eat and Deliveroo, will enable more dine-in restaurants to get their delivery services online quicker than setting up their own delivery infrastructure.’ This sounds reasonable but a material number of operators, that could have stayed open for click & collect, delivery and takeaway sales, have shut up completely.

• The Centre for Retail Research suggests that around 20,000 of the shops that have now been closed on the orders of the government to help slow the spread of the Covid-19 virus, may never open again. The CRR says ‘we expect large retail businesses to now be looking at exactly how many stores they expect to operate in 2021 and beyond in order to trade successfully moving forward. They will now make plans to achieve those objectives.’

• Homeless charity Only A Pavement Away is calling on the hospitality industry for food and catering support. This may be hard as many units are closed and a material number will have to physically board up their sites.

• Hotel Owner journal says that Tim Martin was right to initially say that he could not pay his workforce of 43,000 as the business had no cash coming in.

• NRN in the US says that restaurants there are increasingly looking to delivery to help them sustain sales levels. This, however, is meeting some resistance as consumers are turning to grocery stores and ‘third-party marketplaces, like Grubhub, DoorDash, Postmates, and Uber Eats, are declining in growth.’

• Companies’ House has given limited companies three months extra in which to file their accounts.

• Deliveroo in the UK has launched a new rapid payment system that gives restaurants access to cash made from deliveries within 24 hours. Founder Will Shu says ‘at Deliveroo, we want to do everything possible to support our restaurant partners. We are here to deliver for restaurants who want to carry on offering their amazing food to families at home. This new rapid payment system will immediately improve the cash flow of thousands of restaurants and help them better manage their finances during these challenging times.’

• Commenting on the UK grocery market, Mintel says ‘as early as late February retailers were bracing themselves for a spike in demand and even ahead of the measures introduced last week regarding social isolation, some 10% of shoppers had stockpiled goods.’

• This put a pressure on stocking levels. Mintel says both large and small companies were ‘all struggling to fulfil the heightened demand.’ Online has seen ‘demand spike due to some consumers not wanting to go into stores.’ Online is currently only 7% of sales. Mintel suggests that there are new challenges ahead (e.g. how to keep the nation fed if it doesn’t want to leave its house( and says that ‘foodservice can help ease the pressure on grocers.’ Mintel highlights Leon’s move to reposition itself as a food shop.

Other trends:

• Next is reported to have closed its website and dropped plans to maintain its delivery operation. Many companies that could have remained open for delivery or takeaway are shut or shutting.

• British Land is said to be making rent concessions. The City of London has gone to monthly payment with one month deferred. Transport for London and Network Rail have made concessions. A number of pub companies will not be charging their tenants any rent. Intu has not apparently made concessions but received only 29% of the rent that it was due on Wednesday.

• A number of pub company bosses have taken 50% pay cuts.

• A number, and a growing number at that, of casual diners are reported to be in critical talks with lenders. We expect, sadly, to be reporting collapses within a day or so.

• We may be overtaken by events but it is interesting to see that SSP’s move to raise equity funds was not the first of many. Ten Entertainment remains the only other company to date to issue shares. At least it did until City Pub Group raised money this morning and C&C went to the debt market.

• Bad debts are going to be an issue. There have been temporary closures & there will almost certainly be administrations. Suppliers as well as landlords could be left holding the baby in several cases. The government says it is monitoring the impact on landlords.

HOLIDAYS & LEISURE TRAVEL:

• Consumer insight consultancy BVA BDRC says that only a minority of UK consumers expect holiday travel to return to normal by July. Only 17% believe there will be a return to pre-virus levels this summer. Some 63% of people surveyed had already cancelled or now expected to cancel a 2020 holiday. UK short break demand could pick up more rapidly.

• ABTA hopes that a decision by the government about changes to refund rules for ATOL registered holiday bookings will be made shortly.

• IATA says 5.6 million jobs and $378 billion in GDP will be lost if European airline business demand is only 46% this year of what it was in 2019.

• Some 230 British passengers are among those on board a cruise ship off the coast of Panama that is now being barred from docking in ports in South America. Around 145 passengers and crew are ill with flu-like symptoms.

• London City airport has suspended operations until at least the end of April.

• STR reports that occupancy, room rate and REVPAR for the US hotel industry all fell in the week to 23 March. Occupancy fell to 30.3% (presumably on a declining trend), room rate fell by 30.2% and REVPAR was down by 69.5% on the same week a year ago. STR says ‘RevPAR decreases are at unprecedented levels—worse than those seen during 9/11 and the financial crisis.’

• Delata Hotels says revenue is likely to fall by 16% in Q1 this year. Bookings have been getting sequentially worse. The board has taken a pay cut, some hotels will be shut and others will only remain partially open.

OTHER LEISURE:

• Flutter has updated on its combination with The Stars Group saying the two boards ‘continue to believe strongly in the strategic rationale for the Combination. Specifically, the Combination will create a more diversified product portfolio, with best-in-class sports betting, poker, casino, fantasy sports and free-to-play offerings’ and bring a number of other benefits. Flutter now proposes to pay last year’s dividend in new Flutter shares.

• Mintel has reported that the games market is ‘only going to grow as people spend more time at home over the next few months.’ It says ‘a report from Verizon showed that web traffic related to video game usage during peak hours was up 75% over the past week, compared to an increase of 12% for video streaming and flattening for social media.’

FINANCE & ECONOMICS:

• The Bank of England has maintained its rate at 0.1%. It had already cut rates twice this month. It is keeping its ultimate stock of QE purchased government bond and sterling non-financial investment-grade corporate bond purchases at £645 billion.

• The Bank has warned of possible longer-term damage to the economy from the coronavirus crisis. It’s agents report the ‘pandemic has caused a sudden, rapid decline in economic activity in recent weeks. The situation has been described by many Agency contacts as being worse than the financial crisis in 2008.’

• The Bank says ‘over the past few weeks, hotel, airline and travel bookings have declined significantly. Revenues at restaurants, pubs, cafes and leisure venues around the UK have also fallen rapidly as consumers stayed away. This was the case even before the Government issued advice on social distancing and ordered such businesses to close. Some clothing retailers have reported high double-digit falls in sales. New car sales have also weakened significantly.’

• There are reports that there has been a marked deterioration in housing market sentiment in recent weeks. Contacts said that the economic uncertainty as a result of the pandemic had deterred buyers and sellers, bringing transactions to a halt.

• Zoopla says housing transactions will drop by up to 60% over the next quarter.

• The NIESR says ‘the Bank has now exhausted almost all of the conventional monetary space that existed before the pandemic struck.’

• The number of Americans filing for unemployment benefits rose by 3.3m last week as many businesses closed up and laid off workers.

• Chancellor Rishi Sunak has announced that he is to support the self-employed with a package similar to that put in place for employed workers.

• Banks are reported to be pushing for a full shutdown in the house-moving market. They say they have other things on their minds. House valuations could be all over the place. Some forced sellers may have to dump assets.

• Sterling strong against a weak dollar at $1.2245. Up also vs Euro at €1.1073. Oil lower at $26.22 and UK 10yr gilt yield down 6bps at 0.38%. World markets all higher yesterday. Far East up in Friday trade but FTSE100 set to open down by around 70pts.

START THE DAY WITH A SONG:

Yesterday’s song was Inbetween Days, by The Cure. Today, who sang?

And Wendy’s stealing clothes from Marks & Sparks,

And Freddy’s got spots from ripping off the stars from his face,

Funky little boat race

RETAIL WITH NICK BUBB:

• Next: Today’s bombshell is that Next has had to close down its massive Online operations (which it was relying on to help it get through the pandemic crisis), after resistance from warehouse staff: the brief statement reads “NEXT has listened very carefully to its colleagues working in Warehousing and Distribution Operations to fulfil Online orders. It is clear that many increasingly feel they should be at home in the current climate. NEXT has therefore taken the difficult decision to temporarily close its Online, Warehousing and Distribution Operations from this evening, Thursday 26 March 2020. NEXT will not be taking any more Online orders after this time until further notice”. Ouch!

• Frasers Group; Today’s other bombshell is that #MadMike (aka Mike Ashley), having encountered considerable criticism in recent days for his hard-hearted attitude about store closures etc, has issued a public apology, in the form of an open letter published on RNS: “In hindsight, our emails to the Government were ill-judged and poorly timed, when they clearly had much greater pressures than ours to deal with. On top of this, our communications to our employees and the public on this was poor”. He has also offered to put his distribution fleet at the disposal of the NHS etc.

• Howden: After hours last night, the kitchen joinery business Howden issued another update, to flag that recent trading has been OK and that some stores have been able to re-open: sales in Period 3 (to 21 March) were broadly flat (slightly down on a same depot basis), but it announced that it is still suspending the share buyback programme and the final dividend

• Signet: The UK jewellery chains of H Samuel and Ernest Jones didn’t get much of a look-in during the  Q4 results statement from the US jeweller Signet yesterday (UK sales were down 3.1% LFL in the 3 months to end Jan), given the recent news that all the US stores have been temporarily closed, prompting the company to withdraw any guidance for the new year, but the views of the CEO, one Virginia Drosos, are worth noting: “While it is difficult in the current environment to reflect on the past, it’s important to consider where we’ve been and look ahead with the expectation of recovery. Prior to this crisis, our Signet team delivered results ahead of expectations for the fourth quarter and Fiscal 2020. Moreover, we delivered our best overall Christmas business performance in four years. As we entered Fiscal 2021, our momentum from Christmas continued, including a strong Valentine’s
Day selling period…”. And after a precipitate decline from the c$23 level a month ago, the Signet share price surged by 30% to $9.5 as a result.

• Applegreen: The Irish-based motorway service station operator Applegreen (which owns Welcome Break) has announced its finals today and warned that 2020 profits will be well down, but it has sufficient cash and credit facilities to get through the downturn: “We have modelled our expectations of the impact on our business taking account of current levels of trading across the three markets where movement is severely restricted until the end of May with the expectation that restrictions will then ease gradually before normalising in Q4”.

• BDO High Street Sales Tracker: We highlighted on Wednesday that last week’s John Lewis sales figures will have again been helped by strong Electricals sales, but the BDO High Street Sales Tracker for medium-sized Non-Food chains does not include any significant Electricals retailers…and, with already weak High Street footfall collapsing as a result of the coronavirus pandemic, today’s survey flags that Fashion sales slumped by 55% LFL last week (with in-Store Fashion sales down by as much as 77%)…In w/e Sunday March 22nd, Total BDO LFL sales (including a handful of Homewares and Lifestyle retailers, as well as Fashion retailers) were down by 37% (down 56% in Store sales, but up by 17% in Online sales).

• News Flow Next Week: After the flurry of unscheduled updates this week, we are not expecting much news next week, apart from AO.com, but, with the end of the month coming up quickly now. the monthly GFK Consumer Confidence survey on Tuesday will get a lot of attention (albeit the polling will have been done in the first half of the month, before the pandemic began to get a grip). And Tuesday also brings the much-watched Kantar and Nielsen grocery market share figures (for the 4 weeks to March 21st/22nd).

TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 17 Mar 20 Numbers and / or Covid-19 trading update. Tasty, Brighton Pier, Rank Group

• 18 Mar 20 Numbers and / or Covid-19 trading update. Morrison’s FY numbers, DART Group, Gear 4 Music, Loungers, Marston’s, M&B, Restaurant Group, Revolution Bar Group.

• 19 Mar 20 Numbers and / or Covid-19 trading update. Everyman, Gym Group, Shepherd Neame, Sportech, Escape Hunt, Playtech, PPHE Hotels, New River, Comptoir.

• 20 Mar 20 Numbers and / or Covid-19 trading update. JD Wetherspoon, Hotel Chocolat, C&C, Carnival Corporation, Intercontinental Hotels.

• 23 Mar 20 Covid-19 updates, Fuller’s, Fulham Shore, Time Out, Tasty, Britvic, AG Barr, Ten Entertainment, Gym Group, New River, EasyHotel, Wizz Air, Gregg’s.

• 24 Mar 20 – Covid-19 updates – 888, Tasty, Games Workshop, Whitbread.

• 25 Mar 20 – Covid-19 update – SSP Group fund raise, Ten Entertainment fund raise

• 26 Mar 20 – Covid-19 update – Intu, Vianet, Hostelworld, Big Dish

• 25 Mar 20 DP Eurasia FY numbers

• 25 Mar 20 Ten Entertainment FY numbers

• 26 Mar 20 Time Out FY numbers

• 26 Mar 20 Bank of England MPC meeting

• 2 Apr 20 Saga FY numbers

• 3 Apr 20 Constellation Brands numbers

• 9 Apr 20 Hollywood Bowl H1 trading update

• 23 Apr 20 Gear 4 Music FY numbers

• 28 Apr 20 Pepsi Co Q1 numbers

• 29 Apr 20 YUM Brands Q1 numbers

• 7 May 20 Intercontinental Hotels Q1 numbers

• 12 May 20 On the Beach H1

• 13 May 20 Marston’s H1 numbers

• 13 May 20 Stock Spirits H1

• 13 May 20 Compass Group H1

• 13 May 20 C&C full year numbers

• 11 Jun 20 Fuller’s FY numbers

YESTERDAY’S TWEETS:

• Covid financial side effects. We’ll put a few tweets out highlighting a few. Suggestions gratefully received. We’ve covered a number in our Daily (sign up free www.langtoncapital.co.uk) so these are in no particular order.

• Covid ££ side effects #1. Negative working capital in hospitality. Your customers pay you before you pay your suppliers. Only now, that’s in reverse. Even JDW has said it won’t pay its suppliers till its pubs reopen. This may cause some to collapse.

• Covid ££ side effects #2. It’s about the burn rate, stupid. If you can make most of your problems somebody else’s (and that’s a big if), then you need to be able to hunker down, bleed little cash & basically not go bust. Sound easy? Try it sometime…

• Covid ££ side effects #3. Possession is nine tenths. Have money, keep money. Wherever the cash was in the system when the music stopped, that might be where it stays. JDW has the stock and the money, it’s keeping both, for example.

• Covid ££ side effects #4. Poo rolls downhill. It can be slowed, sometimes stopped. But it can’t defy gravity. Operators lean on landlords, the latter moan to banks, banks bleat to government and government is the taxpayer. More shortly…

• Hospitality companies showing acute distress. Byron brings in KPMG (again) to assess its options, Carluccio to pay staff 50% for March, says it has exhausted its cash reserves. Even JDW won’t pay suppliers. Some may not last past next week. 

• Covid ££ side effects #5. Once again, it’s been proven that Black Swans do exist. UK snowstorms bring the country to a halt. They’re rare, so we don’t prepare for them. But will we have the same attitude towards major disruptions going forward?

• Covid ££ side effects #6. Landlords are people too. Sure, we all want to pass this particular parcel. But skipping dividends, rent & interest & defaulting on supply contracts has implications for all of the above. Needs, must. But costs might rise as a result.

• Covid ££ side effects #7. Passed dividends => underfunded pensions. State aid => higher taxes. Skipped rents => higher risk premiums. Jilted staff => higher base wages. Stiffing your suppliers => cash on delivery etc. Needs, must. We get it but action => reaction.

• Covid ££ side effects #8. Asset values will fall. There will be fewer buyers around & they will be poorer. This has implications for funding, tangible net asset values per share etc. The banks won’t be blind to this. Not forever, anyway.

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