Langton Capital – 2020-12-03 – Loungers’ webinar, read across, sector reopens, Wales, footfall etc.:
Loungers’ webinar, read across, sector reopens, Wales, footfall etc.:
A DAY IN THE LIFE:
Strange and eclectic postbag chez Langton yesterday which, on further inspection, fell into a rather ominous pattern.
Several letters for various offspring no longer living at home alongside a tax demand for £235.20, the offer of a loan from Funding Circle of up to half a million quid, an invitation to take out a corporate credit card with a max limit of £50k and a letter from the Jehovah’s Witnesses saying that they’d welcome the chance to talk to ‘local business leaders’ about God’s Kingdom and how it would be nice to dwell in it.
Hence, death and taxes were joined by loans and debt meaning that, in addition to the post, a full house of fun was opening up.
However, just for the moment, we’ll give all of them a miss though none can be avoided forever. Perhaps, at least hopefully, the Inland Revenue can be dealt with first as they were bold enough to put a date on their demand, 31 January 2021.
Anyway, the weekend is coming vaguely into view so, without further ado, let’s move on to the news:
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IN TODAY’S PREMIUM EMAIL:
Here we consider the hot topics & hope to analyse as well as report.
LOUNGERS H1 NUMBERS – WEBINAR: Following the release of its H1 numbers, Loungers hosted a webinar for analysts and our notes are included below.
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OTHER POINTS AND READ ACROSS:
Table apps, Regional variation, Suburbs, Landlords
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PUBS & RESTAURANTS:
Some operators open again from yesterday:
• Data is sparce but the BBC reports that ‘lockdown fatigue’ and the need to shop for Christmas tempted people back out onto the High Street yesterday. Springboard reports that footfall was up by perhaps 85% on last Wednesday. As the data came out during the early afternoon, it must be a flash figure.
• Springboard says ‘people need and want to buy presents and they want to get out and experience Christmas.’
• The environment was not as helpful for hospitality operators who are banned from opening or severely restricted in what they can sell, when and to whom in 99% of England.
• The British Beer & Pub Association says only 27% of pubs in Britain – that’s 12,600 – would have tried to open their doors yesterday. It says ‘in a survey of its members by the BBPA conducted earlier this week, pub operators also suggested that their pubs could close again as soon as this week if they are unviable opening under the new tier two restrictions.’
• The BBPA says pubs in England will receive an average of £3,400 over the next 6wks compared with £11,300 for pubs in Wales. It says ‘pubs in Wales rightly look set to receive at least three times more in grant support than pubs in England. This is a closer reflection of the real level of costs that pubs will incur under these tight restrictions this Christmas. The Prime Minister’s £1,000 one-off payment is an insult to pubs on their knees in England. He can and must do better.’
• Phil Whitehead, MD, Western Europe, at Molson Coors Beverage Company and Chairman of British Pubs Association, comments ‘we are staggered and disappointed by the measly measures announced by the Prime Minister. These pale in comparison to the devastating hit that pubs across the UK are suffering as they are forced to shut their doors during their most important time of the year.’
• Whitehead continues ‘we need to immediately see a meaningful package of support that truly reflects the financial hit that pubs are being forced to take. We also need to see the government give us as an industry the confidence that we will be able to build for the future by committing to an extension of the 5% VAT rate to all drinks sold in pubs as well reducing the punitively high beer duty rate.’
The High Street, footfall, etc.:
• The night-time economy can provide a draw in itself but, often, lunchtime trade, coffee shops, sandwich shops and other grab and go operators are dependent upon the draw of big shops.
• Here, as we know, there have been problems. Property advisory company Avison Young says ‘the pandemic and subsequent restrictions have had a huge impact on the economy and many sectors have come under pressure, not least the retail sector.’ This will not come as news to the c250,000 members of staff who have thus far lost their jobs.
• Avison Young says footfall levels ‘took a huge hit as the UK went into its first lockdown in March 2020’ and they have risen and fallen as regulations have been eased and reimposed ever since. Secular trends have been accelerated and closures have resulted. Retail parks have not been as adversely impacted as high streets and shopping centres.
• Avison Young says ‘although city centres and high streets in general have struggled, local high streets have seen some resilience. As consumers have been forced to spend time closer to home, their shopping habits have become more locally focused.’ We have heard comments from Loungers and many others to this effect. Fullers last week said that its Central London units were by far the most-impacted by the reluctance to travel of their would-be customers.
• The Local Data Company says that Arcadia Group & Debenhams have provided ‘another blow to the high street.’
• Tesco has said it is repaying the £585m worth of business rates relief that it received as support during the coronavirus pandemic. It says that the cash was useful in the early days of the pandemic. It says there was, at that time, ‘a real and immediate risk to the ability of supermarkets to feed the nation.’
• Morrison’s yesterday evening said that it would do the same thing. It says ‘we have now brought forward this decision and are committing to pay business rates for the coronavirus period in full. The total amount to be paid will be £274m, of which £230m relates to 2020/21.’
• Sainsbury has followed suit this morning saying that it has ‘chosen to forgo the business rates relief on Sainsbury’s stores granted by the UK Government and the Devolved Administrations since March.’ It says the rates relief broadly offset the costs of dealing with Covid-19 but it has decided to forego the relief in any case.
• Tesco’s move, followed by Morrison’s & Sainsbury, will doubtless put some pressure on ASDA, Waitrose, Aldi & Lidl.
• SIBA has called on the government to redistribute the cash to 40,000 pubs and 2,000 breweries that have suffered hardest during the crisis. SIBA says ‘this fund could provide each pub and each brewery in the country with up to £14,000 each, helping them offset the harm tier 2 and tier 3 restrictions will do during the Christmas period and making up for the derisory £1000 offered to wet led pubs this week.’
• SIBA points out that ‘in total, the UK’s big supermarkets have received £1.9bn in business rates relief and grants, but have simultaneously paid shareholders dividends of near equal amounts.’ CEO James Calder says ‘supermarkets have thrived during this crisis, but the UK’s pubs and brewers, which are core to their communities have been left behind. Other supermarkets should follow the good example set by Tesco’s, return the relief they didn’t need and the Government should use the money wisely to give us a chance to see in the New Year.’
• SIBA concludes ‘small breweries have not had access to Business Rates holidays or substantial grants, their sales are at rock-bottom and they are running on empty. Only recently has Northern Ireland announced plans to extend Business Rates holidays to small breweries, and the Treasury should follow their lead with that, and more realistic grants.’
• Brains has said that it will close 100 of its managed pubs from Friday after the ruling that they will not be able to sell alcohol and must close by 6pm. CEO Alistair Darby said that it is “closure by stealth” and announced that the majority of its 1,500 staff will be put on furlough on 80% of their wages.
• The Night Time Industries Association has said ‘the fight is not over, we stand to lose the cultural institutions and amazing workforce of professionals that the UK are renowned for globally. Our clubs, bars, venues, security, freelancers, staff, managers, DJ’s and many more will lose their livelihoods and continue to suffer financial hardship without Government intervention’. It is calling for a direct appeal to the Prime Minister. It says ‘what are you doing to save the lives and livelihoods of the many businesses and workers within the night-time economy? Businesses that have been closed since March and are continuing to suffer.’ It adds ‘what do you say to that Prime Minister, I hope you are sleeping well at night because thousands within our sector are struggling, in fear of their future.’
• UKH & the BII have called for an overhaul of alcohol duty. They are proposing a simpler system that could be used to steer consumption towards the on-trade. A joint statement says ‘a shift in drinking habits away from unsupervised off-trade alcohol to the on-trade would deliver a tax and employment boost. With the future of the hospitality sector, and indeed the entire UK economy looking perilous, the boost for businesses and their employees would be invaluable.’
• JD Wetherspoon has announced that chairman Tim Martin has sold 431,500 of the Company’s ordinary shares at a price of £11.66 pence per share to raise some £5,030,000. Mr Martin still owns 27% of the issued share capital of the Company.
• PE house Cain International has bought Prezzo in a move that includes co-investment by Prezzo’s management team and will see Karen Jones continue as executive chair. Cain says ‘we firmly believe that strong hospitality and leisure brands with disciplined leadership will thrive in a post-Covid landscape.’
• Puttshack is to reopen all three of its UK venues this month. It says all three Puttshack sites are currently located in Tier 2.
• Alcoholic tea company NOVELTEA has announced that it has raised more than £1m from investors in order to fund expansion.
• Alnwick-based The Inn Collection is reported to have secured planning permission to transform Northallerton’s former police station into a 32-bedroom inn.
• A second HospoDemo is to be held at 11am next Monday.
• Beam Suntory has sold its Windsor Canadian Whisky brand to Prestige Beverage Group for an undisclosed sum.
• Bonmarche has become the latest retailer to call in administrators.
• Gift card company Toggle has reported that hospitality businesses are more involved in Black Friday than ever before.
HOTELS & LEISURE TRAVEL:
• Royal Caribbean Group has said that it will extend the suspension of sailings for its various brands. Most are now been suspended through to February 28, 2021, with Australia sailings not due to commence until April 30, 2021. The group says ‘while we continue to work with the CDC and government authorities around the world towards the shared goal of safely returning to cruising, Royal Caribbean Group will be extending the suspension of some sailings.’
• Whitbread’s Premier Inn reports that it has opened a new London flagship hotel today off The Cut in Southwark, London. The group has also completed the acquisition of 15 hotels from the Centro Hotel Group in Germany, taking its hotel portfolio in that country up to 53 units.
• Club Med is to offer home Covid tests at £95.
• Airbnb is likely to raise $2.5bn in new cash via its IPO due 9 December.
• STR reports hat US profitability is picking up.
FINANCE & MARKETS:
• Sterling down at £1.3386 and €1.1045. Oil higher at $48.02. UK 10yr gilt yield unchanged at 0.36%. World markets better yesterday but London set to open down around 12pts.
RETAIL WITH NICK BUBB:
Today’s News: Yesterday’s bombshell from Tesco about repaying Business Rates relief soon bounced its main rivals into following suit, although neither Morrisons or Sainsbury mentioned Tesco in their statements…Morrisons waited until c6.30pm, just before the official close for RNS announcements, to flag that it was going to repay the Business Rates windfall, saying that “For some time Morrisons has been considering the implications of the Government’s decision not to collect Business Rates this year, and we had planned to make our decision once the full cost and duration of COVID-19 had become more clear. However, we have now brought forward this decision and are committing to pay Business Rates for the coronavirus period in full. The total amount to be paid will be £274m, of which £230m relates to 2020/21”. And Sainsbury came into line at 7am this morning, announcing that “Having
HomeServe Watch: It says something about the current stockmarket mood that, after a stay of just 6 months, the home repair/Checkatrade business HomeServe was ejected from the FTSE 100 index in last night’s quarterly review (despite its admirable defensive qualities and a £3.5bn market cap) and (with effect from Dec 21st) replaced by an American hedge fund, Pershing Square…The obvious joke is that Pershing must have been short of HomeServe…
News Flow This Week: The Q3 results from the jeweller Signet and the supermarket giant Kroger (Ocado’s key tech client) in the US will be out at lunchtime today. The ABF/Primark AGM update is out tomorrow morning.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 4 Dec 20 Shepherd Neame AGM
• 8 Dec 20 Vianet H1 numbers
• 10 Dec 20 Marston’s FY results
• 10 Dec 20 On the Beach FY results
• 14 Dec 20 Hollywood Bowl FY numbers
• Est 15 Dec 20 Fulham Shore H1 numbers
• 17 Dec 20 Revolution FY numbers
• 17 Dec 20 JD Wetherspoon AGM
• 22 Dec 20 Revolution AGM
• 12 Jan 21 Nichols FY trading update
• 20 Jan 21 JD Wetherspoon H1 update
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