Langton Capital – 2021-04-26 – Reopening, delivery, Adnams, Remy, Star Pubs, Accor etc.:
Reopening, delivery, Adnams, Remy, Star Pubs, Accor etc.:
A DAY IN THE LIFE:
Langton lost half its runner beans to frost mid-week and then, after looking brave but rather limp for a couple of days, most of the survivors succumbed on Saturday night.
Same reason, frost again, so when we read that French wine producers have lost an estimated €2bn to the cold weather as well, we can sympathise as we’re in the same boat.
Only their boat is rather a different size to ours and the above, of course, is an example of ‘false equivalence.’
A phenomenon beloved of ‘balanced’ reporters. It includes putting somebody from the local fruit & veg stall up against an economics professor to discuss Brexit or the balance of payments deficit or quantitative easing or whatever and then saying, if they disagree with each other, that opinions are divided. Like saying the murder was nice to his dog, so he wasn’t all bad. Like saying we’ve lost thousands of City, pharma and tech jobs but there’s plenty of demand for fruit pickers etc.
Which is all nice and balanced but, at the same time, rather misleading. But we’re not really going anywhere with this so, before we completely lose the plot, let’s move 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 – trading to date:
• Trade has remained strong and the weather has been kind. This is pay week and we have a Bank Holiday coming up. The path to allowing indoor trading looks clear and, though there may be issues with international travel, there are grounds for guarded optimism. The Sunday Times suggests that operators are bouncing back strongly – though this is far from the whole story as the majority of pub & restaurant sites in total remain closed. Those that are open are trading only outside and for delivery. This suggests for some restaurants – and these the relatively fortunate ones that have any space at all – perhaps less than a quarter of their covers are available. Whilst the space available to suburban pubs is greater as a percentage of their total capacity, the industry is still being held back and levels of turnover will be very weather-dependent.
• Deliveroo shares rose by around 1% on Friday to close last week at 233p, some 40% below the company’s IPO price. Short positions have reportedly been opened – but shorting is a symptom rather than the disease and an important question is ‘why do traders believe it right to take a negative position on the group’s shares?’ Meanwhile, competition from other delivery companies remains intense. Uber is encroaching on Just Eat’s German market, for example, but competition has re-emerged from restaurants themselves as they (restaurants) are now allowed to serve customers directly for consumption outdoors.
• Langton comment: See premium email
• Adnams on Friday released full year numbers to 31 December 2020 saying that sales fell to £50.7m from £74.7m in the previous year. The company says that the number of trading days were down 61% on 2019. Beer volumes were down by 23% and the group reports an operating loss of £3.7m against an operating profit of £719k in the prior year. The group reports a loss before tax of £4.3m against a marginal profit of £39k in the prior year. Chairman Jonathan Adnams says ‘the business has been able to weather this most challenging of years, avoid significant job losses, retain cash in the business and pay down borrowings’. There is no dividend for the year.
• Adnams says ‘there was strong underlying demand for Adnams products when the business was able to be open.’ It says ‘online sales rose 245% and off trade grew 15%’ but says that the ‘environment on which we trade has changed significantly with the advent of the inevitable consequences of Covid 19 and the temporary closures in hospitality.’ The company says that it has had a ‘strong focus on cost control and investment in the available mechanisms that support cash flow have been successful in mitigating the financial impact of the pandemic.’
• Langton comment: See premium email
• Remy Cointreau on Friday reported on full year (to March) sales saying that the company had turned in a ‘good performance in a challenging environment.’ It says it saw a ‘sharp sales acceleration in the second half.’ The company reports sales of €1,010.2 million in full year 2020/21, up +1.8% on an organic basis. It says that reported sales were down 1.4%. Remy reports that ‘after declining in the first half of the year, business bounced back strongly in the second half, including +15.1% organic growth in the fourth quarter.’
• Star Pubs & Bars has said that it will continue with its rent reduction support measures until restrictions are fully lifted for its tenants. The company says ‘we know the rent relief, which represents a significant investment on behalf of Star Pubs & Bars during challenging times for the whole industry, will have a significant bearing on the future sustainability of our licensees’ businesses – and clearly we want to see our pubs thrive in the long-term. We’re delighted that the Scottish Government has allowed us to reopen but the restrictions are onerous. Pubs are in a fragile state. The Scottish Government urgently needs to provide additional financial assistance or scrap the nonsensical curfews and restrictions on drinking alcohol indoors that will hamper the recovery of Scotland’s pubs.’
• Rick Stein has permanently closed its fish and chip restaurant in Falmouth.
• Risk Capital Partners has appointed a new management team to lead its newly acquired Curious Brewery business. Mark Crowther and former UK head of Budweiser Budvar Simon George join the business as chairman and managing director, respectively.
• Nestle reports that enforced home working has boosted coffee demand. Certainly, there will have been less of it purchased and drunk out of home in the last year.
• Urto Food & Beverage Co will provide food and drink products to local independent restaurants, venues and shops in the Teesside area, starting with artisan ice creams and wines.
• Fentimans has reported operating profits of £260.5k for the year to the end of December, up from 2019’s £8.95k.
Other pub & restaurant news:
• Some allegations of price gouging. The Mail goes with £7 per pint for Peroni. Langton paid £6.40 a pint for IPA last week, admittedly inclusive of a 12% (now unavoidable) service charge.
• Some feedback suggesting that sales of cask ales have been very strong. Given that it is a product that isn’t easy to replicate other than in a pub environment, this would make some sense.
• Concerns that kitchen staff could be in short supply post reopening.
• Charity Only A Pavement Away has partnered with TV personality Fred Sirieix to launch the ‘Sponsor a Kitchen’ campaign, which will be aimed at finding ex-offenders employment in the outside world.
HOTELS & LEISURE TRAVEL:
Potential leisure travel restart:
• Specific story in The Guardian that Covid passports could be made available by 17 May. The paper says the documents are likely to be different from domestic Covid certificates. Thomas Cook has told Sky News that it remains confident that Britons will be allowed to holiday abroad from 17 May.
• Langton comment: See premium email
Other travel news:
• Accor has reported Q1 revenues of €361 million for 2021, down 53% on the prior year and down 57% on Q1 2019. Accor says ‘there were no surprises in our first-quarter performance.’ It says ‘global business trends are improving slightly and the ramp-up of the vaccine rollouts bodes well for a particularly strong rebound. As it did in 2020, the group continues to keep a close eye on protecting its cash and cutting costs. Today, all our efforts are focused on the strong recovery expected this summer.’ Comps are about to get much easier.
• Seabourn has cancelled more sailings in Europe this summer
• Turkey has lifted its suspension of direct flights from the UK
• The Global Business Travel Association has reported “multiple positive signs” of a recovery in business travel
• Re the stillborn European Super League, Real Madrid president Florentino Perez has suggested that the 12 clubs that agreed to have “binding contracts” and “cannot leave”. The lawyers may be the only ones certain to make money.
• Concern re festivals. Millions of tickets have already been sold, says The Guardian. The Boomtown festival has just been cancelled due to a lack of insurance.
• Exhibitions company Informa has reported a 2020 loss of £1.1bn
• Oliver Dowden has committed £7m of taxpayers’ money to support British cinema
• Mattel has reported Q1 sales up 47%
• Snap has reported Q1 sales up 66% with users up 22% year on year.
FINANCE & MARKETS:
• Political decision-making may be impacted as government mired in sleaze, cronyism and corruption allegations. Cummings’ blog post, calls for Michael Gove to address the Commons etc.
• UK government borrowing hit £303bn in the financial year to end-March.
• Markit reports Composite flash PMI for the UK up to 60.0. Services was 60.1. Markit says ‘forward bookings for hotels, restaurants and other consumer services in response to the roadmap for lifting pandemic restrictions helped to boost new business volumes across the service economy in April.’ It says ‘companies are reporting a surge in demand for both goods and services as the economy opens up from lockdowns and the encouraging vaccine roll-out adds to a brighter outlook.’
• Inflation perhaps on the horizon. Markit says ‘prices charged for goods by manufacturers are meanwhile rising at a rate not seen for a decade, linked to higher global prices for many inputs and near-record supply shortages. These prices will inevitably feed through to higher inflation as we head into the summer, though there’s much uncertainty as to how long the inflationary impact will last.’
RETAIL WITH NICK BUBB:
• See premium email
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 27 Apr 21 Whitbread FY numbers
• 27 Apr 21 Starbucks Q1 numbers
• 28 Apr 21 Carlsberg Q1 numbers
• 28 Apr 21 YUM Brands Q1 results
• 28 Apr 21 Sainsbury FY numbres
• 29 Apr 21 Molson Coors Q1 numbers
• 29 Apr 21 Royal Caribbean Q1 update
• 29 Apr 21 Texas Roadhouse Q1 numbers
• 29 Apr 21 WH Smith H1 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
• 14 May 21 Tasty 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
• 8 Jun 21 DP Eurasia AGM
• 15 Jun 21 Vianet full year numbers
• 24 Jun 21 Bank of England MPC meeting
• 27 Jul 21 Campari H1 numbers
• 3 Aug 21 Domino’s Pizza 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
• 19 Aug 21 Rank FY 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.