Langton Capital – 2021-04-08 – Reopening plans, passports, rent arrears, 21 June hopes, Carnival etc.:
Reopening plans, passports, rent arrears, 21 June hopes, Carnival etc.:
A DAY IN THE LIFE:
It’s been cold over the last few days as the wind has shifted around to the north and, as it happens, our house whistles in a very odd way when the air hits it briskly from that direction.
This had me thinking that someone was warbling tunelessly in the kitchen – and indeed in the back bedroom at the same time – for a short while. But I got over my confusion pretty quickly, unlike the dog, who is still convinced that two, three or maybe more, people are stalking around the house making strange noises.
However, the fact that they’re invisible and smell of nothing more worrying that snow on the North York Moors seems to have reassured him that they’re harmless. And, with that in mind, the mystery will be filed away as just another entry on that long, long list of things that he doesn’t understand but, as they don’t threaten his food supply or keep him awake at night, he can safely ignore.
Anyway, we’re pleasantly further through the week than would normally be the case, so let’s move on to the news:
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PUBS & RESTAURANTS:
The road to reopening:
• There are two major variables (and a whole host of minor ones.) We would suggest that the two major variables are dates and details and, whilst the 12 April, 17 May and 21 June dates remain in place, there is some uncertainty as to details. With discussion still swirling around the potential need for vaccine passports (not for 12 April, we are told – no promises beyond that) and just what the complete return to normality on 21 June means (although it almost certainly does not mean exactly what it says).
• Why the delay compared to non-food retail?
• Sacha Lord, who is the night time economy advisor for Greater Manchester, has been told that his legal challenge to ensure that hospitality should be allowed to reopen for indoor service at the same time as non-essential retail, will be expediated through the courts. As outdoor opening will happen on Monday, there are claims that the government is playing for time. The case will next be heard on 19 April.
• Why talk of passports when you don’t need them in shops?
• The Guardian quotes Loungers’ founder Alex Reilley as saying that the government is treating hospitality unfairly in that it is talking about Covid checks above and beyond those that will be taking place elsewhere in the economy. Reilley says ‘this feels like a measure which is unreasonably targeting our sector, they are not proposing this to go into a supermarket.’ He says ‘it is undemocratic, it’s potentially incredibly discriminatory, and it is requiring a sector which has suffered immeasurable financial losses through the last 15 months to have to adhere to yet another nonsense rule in order to operate ‘as normal’’.
• On the same subject, JDW’s Tim Martin says ‘Wetherspoon’s has no faith in this sort of trade-off or in any initiatives dreamt up on a daily or weekly basis, by a small group of ministers, under emergency powers, following discredited and counterproductive curfews, substantial meals, table service, moon-shots and other idiocies.’ There is no shortage of other operators that are of the same view.
• Langton comment: See premium email.
• More on passports:
• The CRG is on the case with potentially as many as 70 rebels. Labour is keeping its powder dry. The Lib Dems are anti and it is hard to see the Scot Nats doing much to help Mr Johnson out. So the potential for a Commons defeat is very much there but, and here’s the question for lawyers, would such a move actually require Commons approval or is it covered by the emergency powers that the government has granted itself and recently renewed.
• Langton comment: See premium email.
• Hopes for 21 June:
• The Morning Advertiser carries a number of comments from operators saying that ‘trading restrictions must be lifted this summer.’ At the moment, that is still the plan but, in reality, what did the PM mean, if anything, when he said that all restrictions would be lifted by 21 June?
• Langton comment: See premium email.
• The Times has suggested that the one metre rule could be dropped if customers provide proof of immunity or vaccination. This puts passports back on the agenda. Admiral Taverns’ Chris Jowsey says he is ‘very nervous’ about this as a possibility. Oakman’s Peter Borg-Neal says they would be ‘impractical, discriminatory and unnecessary.’
• Consumer demand:
• KAM Media has produced research suggesting that ‘2021 looks set to be the summer of socialising for many UK consumers, with 36% saying they intend to have friends and family over to their homes more often than pre-pandemic.’ The poll, conducted last week, finds ‘there will be a significant amount of socialising going on in homes if and when restrictions are completely lifted this summer. 39% of UK adults said they will have friends or family over for a BBQ. 32% will have people over for a dinner party.’ In addition ‘the research showed that 41% intend to have a picnic in a public place. 60% intend to visit a pub or restaurant. People are also open to visiting the cinema (27%), the theatre (16%) and also music festivals (12%.).’
• KAM’s Katy Moses says ‘there’s a definite buzz in the air as consumers begin to let themselves dream that the lifting of restrictions may be a reality this summer. It’s no surprise that the enthusiasm to get out and socialise is led by the younger generations but interesting when we look at social and leisure activities outside of pubs and restaurants, we start to see a difference in the sexes too! Women are much keener to go on picnics, have people round for BBQs and dinner parties than men. But both sexes are equally keen to get back to the pub this summer!’
Other Covid issues:
• Customers will be allowed inside pubs & restaurants to use the loos and to pay their bills.
• Lumina Intelligence says the ‘food to go market contracted by 46% in 2020.’ It says it will recover to ‘72% of its 2019 market value in 2021.’ Given that it’s April now, it had better get a move on.
• Rent negotiations .The Government has launched a call for evidence to monitor how commercial rent negotiations are going. This is one of several elephants in the room. The current Lease Forfeiture Moratorium expires at the end of June. Jonathan Downe of London Union quotes the government as saying ‘if there is evidence that productive discussions between landlords and tenants are not taking place, and that this represents a substantial and ongoing threat to jobs and livelihoods, the Government will not hesitate to intervene further.’ Downey refers to his own business when he says ‘four of the landlords of my five London sites refused any reductions in rent and expected full payment of arrears. Two of the sites, Dinerama and Hawker House, closed permanently, with 90 job losses. Milk & Honey + Model Market will be gone when the forfeiture moratorium ends.’
• Working from home. Mixed messages. Goldman is going back, Google is telling staff they will need to ask permission to work from home from September and accountant Grant Thornton has said the majority of its UK employees want to spend less than half of the working week in the office after the pandemic. Rival accountancy group PwC says it will adopt a hybrid model with staff in the office perhaps 2 or 3 days a week.
Company & other news:
• Deliveroo shares rose 5p or so yesterday as its riders threatened strike action and the FT reported that ‘Goldman Sachs bought about £75m in Deliveroo shares to prop up trading in the UK food delivery group after investors shunned its market debut.’
• Wendy’s is to open a site in Croydon, its first in London since it announced its return to the UK market.
• Shake Shack has announced it is partnering with Chef Neil Rankin to Introduce a Vegan Crispy Shallot Burger
• Starbucks has announced that it is to scale up testing of its reusable cup rental service, Borrow a Cup, at five stores in Seattle this spring.
• Earnest Research has suggested that the $1.9 trillion American Rescue Plan stimulus package could raise restaurant sales by as much as 20% to 30% during the next several weeks.
HOTELS & LEISURE TRAVEL:
• Carnival Corporation yesterday reported Q1 numbers saying it had made an adjusted net loss of $(2.0) billion for the first quarter of 2021. The group in January reported a loss for calendar 2020 of $10.2bn. The company says it ended the quarter with $11.5 billion of cash and short-term investments. It says ‘cash burn rate in the first quarter of 2021 was better than expected as the company has identified and implemented opportunities to optimize its monthly spend.’ There is no trading comment as there is no trading. CCL does say ‘booking volumes for all future cruises during the first quarter of 2021 were approximately 90% higher than booking volumes during the fourth quarter of 2020.’ It says ‘cumulative advanced bookings for full year 2022 are ahead of a very strong 2019, despite minimal advertising or marketing.’
• CCL CEO Arnold Donald says ‘we are focused on resuming operations as quickly as practical, while at the same time demonstrating prudent stewardship of capital and doing so in a way that serves the best interests of public health.’ Mr Donald says ‘we have been positioning Carnival Corporation to return to serving guests an operationally stronger company than we were before. With an exciting roster of six new, more efficient ships by December and with lower capacity from the exit of 19 less efficient ships, we expect to capitalize on pent-up demand and achieve significant cost improvement from the greater efficiency of our fleet, along with ongoing streamlining of shoreside operations.’
• The CDC in the US has said that cruising from the US could resume by mid-summer with sailing restrictions.
• Business Travel News has suggested that many businesses are taking a fresh look at their business travel needs. It says that combined pressure from the need to cut costs and the desire to reduce carbon footprints (and the fact that Zoom has done the heavy lifting recently), could lead to business trips being examined more closely to ensure that they are really necessary.
• Bloomberg has reported that travel in China is up to 95% of pre-pandemic levels.
• Claire Murdoch, national mental health director for NHS England, has suggested that gambling firms have profited during the pandemic but are leaving the NHS to “pick up the pieces” reports The Guardian.
• Virgin Media’s CEO Lutz Schuler is reported set to the enlarged firm that results from the merger with Telefonica’s O2.
FINANCE & MARKETS:
• The ICAEW reports Smith & Williamson as saying it expects to see ‘waves of insolvency this year as sector by sector, businesses feel the pinch.’ Government measures have been ‘hugely supportive’ but this has meant that a number of firms are being kept ‘artificially afloat.’ The ICAEW says ‘so far, hospitality, healthcare, and the charity sector have been among the worst-hit industries.’
RETAIL WITH NICK BUBB:
• Nick is taking a well-earned break and is back on 12 April.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 8 Apr 21 Sportech FY numbers
• 8 Apr 21 Constellation Brands FY numbers
• Est. 9 Apr 21 Barclaycard Consumer Spending (March)
• 13 Apr 21 Just Eat Q1 numbers
• 15 Apr 21 Deliveroo Q1 numbers
• 15 Apr 21 Pepsi Q1 numbers
• 15 Apr 21 Naked Wines FY trading update
• 15 Apr 21 Heavitree Brewery AGM
• 22 Apr 21 Domino’s Pizza PLC AGM
• 23 Apr 21 Gear4Music results
• 28 Apr 21 Carlsberg Q1 numbers
• 28 Apr 21 YUM Brands Q1 results
• 29 Apr 21 Molson Coors Q1 numbers
• 30 Apr 21 Safestay General Meeting
• 4 May 21 Campari Q1 numbers
• 6 May 21 Bank of England MPC meeting
• 7 May 21 Intercontinental Hotels Q1 numbers
• Est 9 May 21 Barclaycard Consumer Spending (Apr)
• 12 May 21 Compass Group H1 numbers
• 12 May 21 Stock Spirits H1 numbers
• 12 May 21 TUI H1 numbers
• 12 May 21 Just Eat AGM
• 18 May 21 Britvic H1 numbers
• 19 May 21 Marston’s H1 numbers
• 26 May 21 C&C FY numbers
• 24 Jun 21 Bank of England MPC meeting
• 27 Jul 21 Campari H1 numbers
• 5 Aug 21 Bank of England MPC meeting
• 10 Aug 21 Intercontinental Hotels H1 numbers
• 12 Aug 21 TUI Q3 numbers
• 18 Aug 21 Carlsberg H1 numbers
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
• 8 Dec 21 TUI FY numbers
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