Langton Capital – 2021-04-21 – Trade volumes, delivery, Super League, Time Out, Wm Hill etc.:
Trade volumes, delivery, Super League, Time Out, Wm Hill etc.:
A DAY IN THE LIFE:
We re-watched Chernobyl at the weekend so arriving back in the London office on Monday for the first time since Christmas wasn’t such a shock.
We were expecting the slew of dead plants, abandoned and now wizened fruit and a pile of bills. There were, as feared, no inbound cheques. However, the fridge was a hazard, one of the clocks had stopped and its battery was a furry nightmare and the other was an hour wrong.
The pot noodles were out of date, our emergency beer stash likewise and the wobbly chair had not fixed itself. Nor had the modest amount of washing up washed itself up and, given what it looked like, it was deposited in the bin.
We had an electricity bill and four reminders, a rates demand followed, a week or two later, by a letter telling us that our small company deduction was 100% and bountiful correspondence from our landlord pleading, threatening and cajoling us into giving them some money.
All of which had been successfully ignored whilst in York because, truly, out of sight is out of mind but, as I’m now sitting surrounded by the fruits of my ignorance combined with the threat of an immediate cessation of electricity services, I’d better do something about it.
So we’ll be ‘busy bad’ rather than ‘busy good’ for a little while and, to add potential physical injury to insult, the hoarding has come down on the next door building, they’ve prettified the pavement and they’ve put in a 40cm or 50cm high kerb, which will have the injury lawyers setting up cameras because many is the broken ankle…
Anyway, enough of that, on to the news:
ADVERTISE WITH US:
Langton’s free email now carries adverts. See front page of website for today’s copy & contact us for further details.
CHANGED EMAIL FORMAT:
The Premium Email is unchanged. The Free Email is written and pre-sent the evening before. It may not include breaking stories nor Langton comment. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email.
Prices: £295 for one subscription, £495 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option:
PUBS & RESTAURANTS:
Reopening – levels of trade. Operators, trade bodies and analysts continue to feed back information on the first week’s trade.
• S4 Labour reports that ‘hospitality like-for-like sales up 9.1% but 45% of sites remain closed resulting in total sales decline of 25%.’ The plus 9.1% is impressive, particularly as it should include some units that are making very low sales but have chosen to open rather than remain closed. S4 touches on this when it says ‘the analysis of the figures reveals a mixed and complex picture, with 45% of open sites trading at 90% or worse than 2019 of sales in same week in 2019.’
• S4 says ‘operators able to open, benefited from significant pent-up demand and weather conditions that, despite starting with a scattering of snow Monday morning, were generally dry and mild. The research suggests that the general public in England were keen to return to the beer garden for a drink, with open wet-led sites boosted by a 13.2% uplift in sales compared to the same week in 2019, while open sites that are food focused seeing an uplift of 7%.’ It adds that, because the industry as a whole remains down on 2019, ‘these figures on re-opening week are far from a waving flag of success for current restrictions, rather an indicator of significant lost potential for operators.’
• Langton comment: See premium email.
• CGA reports that ‘hospitality venues that were able to open in England last week enjoyed a stronger bounce in sales than they did after the first national lockdown in July 2020, despite being limited to outdoor service.’ It says ‘like-for-like sales at pubs, bars and restaurants that were trading in the seven days from last Monday (12 April) were 45% higher than in the week from 4 July 2020, when they were able to resume both inside and outdoor service.’ It says, however, that ‘like-for-like sales at venues that were open last week were 21% down on the equivalent week in 2019—though that period did include the Easter weekend. But when compared to the previous week in April 2019, like-for-like sales were 1% higher.’
• Langton comment: See premium email.
• Referring to the CGA stats, CEO executive Kate Nicholls said: “It is wonderful to see busy venues again, as people can at long last meet with friends after three months of lockdown, albeit only outdoors. Trading in such circumstances was always likely to benefit from a welcome initial spike but the return of limited trading cannot overshadow the fact most venues remain closed.’ Ms Nicholls says ‘it is crucial that the Government delivers on its commitment to dropping all restrictions from 21 June. If that milestone lapses, then the Government will need to be poised to provide further support for the sector—an investment that would be fully justified, given our ability to drive economic recovery.’
• Also commenting on the above stats, CEO Emma McClarkin said: “These sales figures are very encouraging for our sector and show just how much we have all missed our pubs these last few months. Despite the positive news, it is imperative we remember that whilst they still have restrictions our pubs remain unviable and the many are still to open. Only when all our pubs can fully reopen as normal will they be viable businesses and in the green once more.’
• Wireless Social looks at last week and says ‘the data reveals how footfall recovered to 28% of levels seen in the same week in April 2019, despite fewer than one quarter of licensed venues choosing to open due to the outside only trading rules, suggesting that consumers were confident and excited to visit pubs and restaurants for the first time this year.’ It says the Friday was the busiest day of the week. Wireless Social believes it has detected evidence that older consumers are becoming more active. Founder Julian Ross says ‘for operators fortunate enough to have outside space, the last week has been a much-needed and well-deserved boost. People are desperate to get out and support their favourite pubs and restaurants and our data, along with the fact that sales were up 60% on 2019 levels, proves this, with footfall hitting the highest levels our high streets and venues have seen in
• Tenzo has commented on sales over the first weekend of reopening, saying that ‘Saturday saw sales numbers 29% higher than the same Saturday in 2019.’ This presumably just for units that were open rather than the industry as a whole. Tenzo adds ‘the week (Monday through Friday) saw sales average at 14% lower than the same week in 2019 despite only outdoor dining being open.’
Longer term trends – delivery:
• Just Eat referred to Covid tailwinds and HIM UK agrees. It says ‘2020 was the year that food delivery exploded.’ It says it grew by 48% or £3.7bn during the pandemic and the delivery industry has added 4.3m new users since the appearance of Covid-19. HIM says it has provided ‘a lifeline to hospitality businesses across the UK.’ It adds ‘what’s more, there is +10% growth forecast for delivery by 2024. The pandemic might be (hopefully) drawing to an end, but the opportunities that foodservice delivery offers certainly are not.’
• Langton comment: See premium email.
• HIM says ‘consumer demand for delivery has been relentless since the explosion of the market from 2017 with aggregators including Just Eat, Deliveroo and Uber Eats expanding partnerships with household brands and reaching new territories. The roll out of delivery of foodservice brands including fast food giants McDonald’s and KFC has meant that for many segments in the total eating out market, delivery now commands a higher share of total sales. Independent restaurants and traditional fast food segments have been leading growth in the market which is set to continue. The former is benefiting from sheer number of outlets whilst the latter through players offering relatively low-cost, quick to produce and portable propositions.’
• Langton comment: See premium email.
• Super League considerations. We won’t go into this too deeply because it’s been overtaken by events but, with the PM and others ‘committed’ to stopping it from happening, it may be stillborn. However, here’s a question. Will a Super League suck more money out of would-be pub & restaurant goers’ pockets (as money flows to the ‘content providers’, i.e. the clubs) or could it put more money back into the UK economy as fans in the far east funnel money to Alderley Edge and parts of Hampstead?
• Unemployment stats released by the ONS show that younger people are bearing the brunt of job cuts across the country. It says in the year to March, 811,000 payroll jobs were lost in the UK, with under-35s accounting for 80% of these cuts. The rate of unemployment has dipped to 4.9% as many individuals who have lost their jobs may have left the country or left the workforce.
Company and other news:
• Hammerson has updated on rent collection saying that 40% of rents due for Q2 have been collected (48% in the UK, less in France & Ireland)
• Time Out announced yesterday that, as a result of the Firm Placing and Retail Offer announced in March, a total of 28,320,000 New Ordinary Shares were issued at the Issue Price, raising gross proceeds of approximately £9.9 million. Time Out has also announced that ‘it will issue 16,251,404 New Ordinary Shares to Lombard Odier at the Issue Price of 35 pence, to raise approximately £5.7 million.’
Also in premium email today:
• Shepherd Neame H1 numbers, more on Netflix, chairman succession at Ten Entertainment etc.
HOTELS & LEISURE TRAVEL:
• The Immigration Service Union has warned that border delays could worsen after (or if) international travel resumes next month. Turning the suggestion on its head, it seems fair to say that putting more people through a creaking system is unlikely to make it operate faster.
• Moneysupermarket has blamed (in part) what it says is negligible travel demand for a drop in its profits.
• Willie Walsh, now boss of IATA, has criticised what he has called “profiteering” by Covid test providers. He cautions that ‘to come to the UK for three days, you have to buy a package in advance to test on days two and eight, even though you won’t be there on day eight. It’s a scam.’
• Tunisia is to allow travellers on packages into the country on receipt of a negative Covid test from this week.
• RCL has said it is making progress in agreeing a resumption date with the US health authorities.
• Netflix yesterday reported Q1 numbers including a slowdown in subscriber growth. It reported c3.98 million people signed up for its service in Q1, well short of the projected 6 million. Netflix said it had fewer new shows but says that sequels to existing hit shows are shortly to be released. The group’s shares fell 11% in after-hours trading to $489.28, wiping $25bn off the company’s market capitalization.
• William Hill reported yesterday that its £2.9bn takeover by US casino group Caesars Entertainment had been cleared by a UK. Caesar’s says ‘the opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect.’
• All six Premier League teams have now withdrawn from the proposed European Super League. Manchester City was the first to pull out followed by Chelsea. The Super League said it would reconsider “the most appropriate steps” before it reacted to the news. UEFA said ‘the important thing now is that we move on, rebuild the unity that the game enjoyed before this and move forward together.’
• The UK government had previously said it was be “exploring every possibility, including legislative options” to stop the proposed football European Super League going ahead. It is likely that the Super League has done at least some homework. This could leave its opponents playing catchup for some time. Indeed the BBC reports that ‘the European Super League has filed injunctions against Fifa and Uefa to try to stop them from banning clubs or players from future tournaments such as the Champions League.’
• Festivals this summer have not yet been cancelled. And they may not be, but what’s the betting?
FINANCE & MARKETS:
• The unemployment rate in the UK fell to 4.9% in the three months to March. This is the first decrease since Q4 2019.
• The NIESR has considered the ONS’s wages statistics and says that it ‘predicts that average weekly earnings growth will grow at 5.2% in the second quarter of 2021, after increasing by 4.5% in the three months to February. Forecasts for private and public pay growth for the second quarter are 5.5% and 3.5% respectively.’ Unless productivity picks up sharply, these figures seem to be consistent with a return to levels of modest price inflation.
• The NIESR says ‘the number of furloughed workers is estimated to be around 5 million in February, similar to January. We forecast that number to steadily decline from the end of March until September when the furlough scheme is planned to end.’
RETAIL WITH NICK BUBB:
See premium email.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 21 Apr 21 Wagamama (Restaurant Group) bondholder report Q4 2021
• 21 Apr 21 Chipotle Q1
• 22 Apr 21 Domino’s Pizza PLC AGM
• 22 Apr 21 Music Magpie first day’s trade (issued at 193p)
• 22 Apr 21 Pernod Ricard Q3 numbers
• 23 Apr 21 Gear4Music results
• 23 Apr 21 GfK Consumer Confidence numbers
• 27 Apr 21 Starbucks Q1 numbers
• 28 Apr 21 Carlsberg Q1 numbers
• 28 Apr 21 YUM Brands Q1 results
• 29 Apr 21 Molson Coors Q1 numbers
• 29 Apr 21 Texas Roadhouse Q1 numbers
• 30 Apr 21 Safestay General Meeting
• 4 May 21 Campari Q1 numbers
• 5 May 21 Ten Entertainment AGM
• 6 May 21 Shake Shack 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)
• 10 May 21 Marriott Q1 numbers
• 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
• 20 May 21 Fevertree AGM
• 20 May 21 888 AGM
• 25 May 21 Restaurant Group AGM
• 25 May 21 Shaftesbury H1 numbers
• 26 May 21 C&C FY numbers
• 3 Jun 21 New River full year numbers
• 15 Jun 21 Vianet full year 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
LANGTON CAPITAL: Made in Hull. Like all the best things. Langton Capital is a financial advisory company providing insightful views on the UK and global leisure industry and the wider consumer sector in general. Subscription to the daily email is free. Unsubscribing is painless. We provide daily off the shelf and bespoke research. We have helped with transactions, fund-raisings, disposals and other corporate issues. We have a good ear, we are impartial, independent and not half bad at what we do. If you think that we could help you or your business, drop us a line.