Langton Capital – 2020-10-20 – Wales, Level II, Britvic, Escape Hunt, trading & other:
Wales, Level II, Britvic, Escape Hunt, trading & other:
A DAY IN THE LIFE:
Our run-around is a 12yr old Skoda with 80k miles on its clock and about 80,000 dents on its bodywork.
It motors really well and I’m rather fond of it, but our daughter does tend to wince when we pick her up in it and, as some chilled salmon or haddock that we bought last week seems to have leaked when we were transporting said produce back from the supermarket, it’s not likely to have risen in popularity as a result.
Because it’s now not only a geriatric, multi-dented, never-very-expensive motor but it’s all of the above and it stinks of fish.
And, even I have to admit as a diehard fan of the car, that’s not going to do much to endear it to anyone.
Anyway, that’s enough of that. It’s nothing that a month on the drive with the windows wound down won’t cure. On to the news:
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WALES GETS OFF THE FENCE, ANNOUNCES LOCKDOWN: The Welsh Government has announced a 17dy lockdown from 6pm Friday. 20 Oct 2020:
• The Welsh Government has announced a lockdown from 6pm this coming Friday. Pubs, bars, restaurants & non-essential shops will have to close. See Premium Email
THE IMPLICATIONS OF THE MOVE TO LEVEL II. York and also London moved from Level I to Level II over the weekend. 20 Oct 2020:
The key point:
• Not allowing people from different households to meet indoors removed at a stroke much of he rationale for pub meetings, dates in restaurants, catchups with friends over a coffee etc. See Premium
PUBS & RESTAURANTS:
To lockdown or not to lockdown, that is becoming the question.
Lockdown in Wales:
• The Welsh Government has announced a lockdown from 6pm this coming Friday. Pubs, bars, restaurants & non-essential shops will have to close. See Premium Email for further detail, analysis & comment
• The BBPA says the firebreak will force 3,000 pubs to close. It says ‘the Welsh Government announced that grants would be available for some pubs but the trade association says a “far stronger” package of financial support for all pubs, brewers and their supply chains in Wales will be needed if they are to survive a full lockdown. It says 37,000 sector jobs across Wales are at risk too without more support.’
• CEO Emma McClarkin says ‘this ‘fire break’ in Wales will destroy many pubs, brewers and their supply chains in the country unless the financial support package is available to all businesses hit by the forced closure of all pubs.’
• The BBPA says ‘the Welsh Government must now urgently do the right thing and extend the availability of the full financial support package to all pubs no matter what their rateable value is, as well as to brewers and pubs’ other suppliers. This is to ensure they survive this fire break lockdown and will be able to serve their communities and to support thousands of local jobs and livelihoods once more.’
• SIBA says brewers, who are a major part of the supply chain for pubs in Wales that will now have to shut. CEO James Calder says his members have been hit already by a ‘halt on orders from small independent brewers for fear of having beer sitting unsold in their [pubs’] cellars.’
• SIBA says ‘despite 80% of small brewers’ beer being sold via pubs they do not receive any support from Government when pubs are forced to close.’ It adds ‘small breweries cannot just turn production on and off like a switch and this circuit breaker will mean that more small breweries will be deciding to throw in the towel rather than continue through an extremely uncertain time when they have not received the full financial support other sectors have been given.’
First weekend at Level II for York (and London):
• The Evening Standard says ‘leading West End bar and restaurant operators today warned that they will not survive the winter after the “horrendous” first weekend of the capital’s Tier 2 Covid-19 clampdown triggered tens of thousands of cancellations.’
• And this is London Level II rather than Liverpool Level III although, in some ways, Level III would be better for some pubs and restaurants as, one would imagine, even if they supply ‘main meals’, they could choose not to do so for commercial purposes, supply only alcoholic drinks and therefore be ‘forced to close’ and at least get some financial contribution towards staff wages.
• Greene King boss Nick McKenzie has told LBC that Tier II is ‘closure in all but name’.
• See Premium Email for more comment and analysis.
Other comments on shutdowns, Level II & Level III etc.
• Hundreds of hospitality workers demonstrated outside the Houses of Parliament yesterday to draw attention to the plight of their industry. More than a half of the population of England is now at Level II or above. Organisers of the demonstration say that there is no evidence that the 10pm curfew will slow the spread of the virus.
• Mayor of London Sadiq Khan yesterday said ‘I support those from across our hospitality sector protesting today deeply anxious about their future.’ He says ‘the huge failures in the test and trace system have meant that further COVID restrictions are now necessary, but our bars, restaurants and other venues must now get the extra financial support they need urgently to stay afloat.’
• Khan adds ‘the 80 per cent furlough scheme was a lifeline for many businesses at the start of the pandemic, and it is this level of support London’s hospitality sector now needs to prevent further widespread unemployment and ensure this world-leading sector can return to business when the virus is under control. Until the government gets a grip on this virus, ministers have an obligation to give businesses the support they need to survive while restrictions remain in place.’
• Labour Party leader Keir Starmer has called on the Government to enforce a “two to three week” national lockdown, closing hospitality venues while keeping schools open. Starmer says the pubs, bars and restaurants forced to close would be ‘compensated so no business loses out because of the sacrifices we all have to make.’
• The NIESR has said that an earlier lockdown in March would have saved perhaps 20,000 lives.
Other pub & restaurant news:
• Foodservice analysts Peter Backman reports that the mood across the industry is darkening. He says ‘after a promising summer (reopening, EOtHO, fine weather encouraging people to go out), the outlook is turning darker. Consumers were already forsaking the good eating out habits they had rediscovered in August and then the long heralded second wave struck.’
• LVMH’s wine and spirits division reported encouraging signs of recovery in Q3 following a “significant drop” in Q2. The wine division saw “improving performance” in Europe in Q3, although the US and Japanese markets were still “challenging”. The Hennessy Cognac business returned to growth.
• Propel reports that Abokado is to be sold via a prepack with all staff to lose their jobs. The company underwent a CVA in September last year. Although the Covid-19 pandemic was not foreseeable at that stage, the operator clearly did not cut deep enough,
• Remy Cointreau has taken a majority stake in champagne producer, Champagne J. de Telmont, for an undisclosed sum.
• Puttshack has announced that Logan Powell is to become UK President as well as Group CFO. Hugh Knowles has been appointed UK Managing Director
• Four Intu retail sites, Lakeside, Watford, Nottingham’s Victoria Centre and Glasgow’s Braehead centre, have been sold.
HOTELS & LEISURE TRAVEL:
• UKHospitality Cymru says that ‘another lockdown, even a short one such as this, is a severe blow to Welsh hospitality and tourism.’ It says that, as a sector, ‘we can lead on safe socialising, helping make sure people across Wales can meet friends and family safely in a licensed, protected environment.’
• The World Tourism Organisation is to work alongside the Expedia Group to collaborate on a range of topics aimed at driving tourism recovery’
• UK Inbound has urged PM Boris Johnson to introduce a US-UK travel corridor
• The UK’s video games industry has been booming over recent years. The lockdown earlier in the year helped boost sales.
FINANCE & MARKETS:
• Ministers have been told £13bn will be needed per annum to retrain 90% of the UK’s workforce over the next decade. The government’s flimsy algorithm told Langton it may have a future as a dressmaker at £13,500 per annum (after training).
• Chancellor Rishi Sunak has been warned by the food supply industry that supplies to care homes, schools, hospitals and prisons are not secure unless the government steps in to give money and support to struggling wholesalers
RETAIL WITH NICK BUBB:
Today’s News: There is no new Retail company news today, but, given the 20% slump in the Boohoo share price yesterday, we ought to flag that the story that PwC is set to resign as auditor to Boohoo was not the only development concerning investors yesterday, as the Sunday Times also ran a News story that the National Crime Agency (NCA) is investigating clothing suppliers of Boohoo on suspicion of money laundering and VAT fraud.
News Flow This Week: Thursday brings the Superdry AGM and then we get the much-awaited GFK Consumer Confidence index for October first thing on Friday, shortly followed by the belated ONS Retail Sales figures for September.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 21 Oct 20 William Hill Q3 trading update
• 22 Oct 20 Gear 4 Music trading update
• 27 Oct 20 Whitbread H1 numbers
• 28 Oct 20 Texas Roadhouse Q3 numbers
• 29 Oct 20 YUM Q3 earnings update
• 29 Oct 20 Starbucks Q4 results
• By 31 Oct 20 DP Poland H1 numbers
• 3 Nov 20 DART Group AGM
• 4 Nov 20 Shepherd Neame FY numbers
• 10 Nov 20 Premier Foods H1 numbers
• 11 Nov 20 JD Wetherspoon Q1 update
• 17 Nov 20 Gear 4 Music H1 numbers
• 19 Nov 20 Dart Group H1 numbers
• 24 Nov 20 Compass Group FY numbers
• 26 Nov 20 Britvic FY numbers
• 2 Dec 20 Shepherd Neame AGM
• 2 Dec 20 Stock Spirits FY numbers
• 10 Dec 20 Marston’s FY results
• Many, many, many pleas for more help for hospitality. Demo today in Parl. Sq. Companies, observers, trade bodies etc say sales dropped sharply, once at 10pm curfew and again over moving to Level II / III. Cancellations up, illegal to meet acquaintances not helpful etc
• Downing St says EU trade talks now ‘over’, Gove says <50% chance. Deal either not oven ready at all or were being gamed for a spectacular, ‘we-pulled-out-all-the-stops’ rubbish & panicky deal to be announced this week. Betting, Sterling moves etc are on the latter
• Langton’s brush with Covid has left it with a lingering taste of chicory. Had hoped for superpowers (as per Trump) but chicory is better than onions or garlic so may have to live with it.
• Scotland & now Wales putting a lot of clear, blue water between themselves and England. Will be fascinating to see whether the stats diverge or not over the coming weeks. If hospitality was sufficiently supported, could not this be a better way?
• Whitty, Vallance etc getting pilloried for crying ‘wolf’. But there actually is a wolf. If scientists shout about it, and they should, human behaviour changes and the infection chart will change its path. Several brainbox Twitter types suggesting otherwise. Surely disingenuous?
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