Langton Capital – 2021-04-27 – Whitbread FY numbers, Jet2, current trading, new openings etc.:
Whitbread FY numbers, Jet2, current trading, new openings etc.:A DAY IN THE LIFE: There’s nothing like a good essay crisis to get the blood pumping. Of course, bungee jumping and parachuting might achieve the same result but at considerably greater risk to life and limb. Nonetheless, we’re rather rushed today because of the coincidence of: a) our March quarter VAT calcs being due, b) the FCA demanding that we lodge our Dec 2020 financial accounts in the next few hours and, c) the fact that, unprompted and despite knowing for months that these events would coincide this week, we decided only to address them on Monday morning. That’s planning for you. 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: WHITBREAD – FULL YEAR NUMBERS: Whitbread has reported FT numbers to end February 2021 and our comments thereon are set out below. Headline numbers: • Whitbread reports that revenues in the period fell by 71.5% to £589m. The group reports an adjusted loss before tax of £635m (2020: profit £358m) and says that its reported statutory loss is £1,007m. • The loss per share on an adjusted basis is 288p (2020: profit per share 166p) and there is, perhaps unsurprisingly, no dividend. WTB says that net debt, after its rights issue, is £47m compared with £323m a year ago. For detail, see premium email. PUBS & RESTAURANTS: Current trading since reopening: • Apologies to operators in Wales & Scotland (where outside trade has only been allowed from yesterday) but herewith some comments on trading in England over the last two weeks. The Coffer CGA Business Tracker shows like-for-like sales down less than a quarter on April 2019 despite trading restrictions. Trade has been helped by good weather and a pent up desire to spend. CGA says that two in five managed sites are now open for outside service. • Langton comment: See premium email • The MA says that pub operators are describing to it just how keen customers are to come out for a drink in the sun. It says, however, that ‘licensees also raised areas of concern with trading restrictions including customer resistance to using the NHS app for contact tracing and hostility from local authorities in regards to outside structures.’ The MA says that, of those who responded to its poll request, some 70% of operators had invested in outdoor space. We would suggest that there will be a very direct link between the effort put into attracting customers and the amount of money going through the till. • Big Hospitality says ‘hospitality businesses across England have reported a mixed bag of trading in the first few weeks of the lifting of lockdown for outside trading, according to the latest Lumina Intelligence Hospitality Leaders Poll.’ It says 43% of operators have been ‘busy or very busy since rules were eased.’ Covid passports: • PM Boris Johnson is understood to have shelved plans for Covid passports in pubs. A ‘senior Downing Street source’ has said that no formal decisions have been made yet, but confirmed the focus is on large events and major venues. Responding to the news, SIBA CEO James Calder says ‘with cases now as low as they were last Summer and the extraordinary progress of the vacation programme it is sensible and welcome that the Prime Minister is moving away from the idea of Covid Passports for hospitality.’ He says ‘we know that pubs and taprooms are safe based on all the evidence collected over the last 12 months.’ • SIBA adds ‘Covid passports would have been another unjustifiable level of red tape and incursion into the freedom of individuals. But whilst this is good news as pubs in Scotland and Wales open today, the industry is still running at a third of its usual capacity and small breweries, who mainly supply pubs but were left out of hospitality support, are still under immense pressure. Pubs and breweries will not be profitable for many weeks and months to come until all restrictions are peeled off.’ Rent arrears: • There are a large number of elephants in the room but accrued rental liabilities is definitely one of the biggest. MCA Insight has reported that there are calls to implement the same rent relief scheme as has been adopted in Australia. The scheme in Australia has pushed through rent reductions and forced landlords, in some cases, to waive some rents and allow deferred payment terms for the balance. Scotland & Wales:
• Pubs and restaurants were allowed to reopen for outside service yesterday. The SBPA says ‘the industry is asking for the extension of opening hours back to normal licensing times, which at the moment is not scheduled to be reintroduced until Level Zero. The SBPA says that the current arrangement means that many pubs won’t be viable given the restricted trading hours – risking business failures just as the recovery period should be starting.’ The SBPA nonetheless says ‘it’s fantastic to see Scotland’s pubs and bars reopening again today. Teams coming back and reconnecting with customers and communities is an important first step, and everyone is excited to get going again.’ It says, however, that ‘the maintenance of the curfew severely limits profitable hours and for many of Scotland licensed premises, it could be the difference between survival and bankruptcy. Removing the curfew Consumer confidence: • Supply is not much use without demand and so it is a relief that, re the latter, the signs look good. We touched on the Deloitte Consumer Tracker a little yesterday but here’s more detail. Deloitte says ‘consumer confidence about their household levels of disposable income jumped by a significant 17 percentage points year on year to -10% the highest level recorded for that measure. Similarly, confidence about levels of debt rose by eight percentage points compared to the same period a year ago, and at 1.5% is at its highest since the Tracker began in 2011.’ • Deloitte says ‘combined with near record levels of savings, these results suggest that if consumers continue to be confident about their income, they could spend that extra cash and become the driving force for growth as the economy reopens. Indeed, the easing of restrictions and the continued roll out of the vaccine programme is expected to unleash pent-up demand for non-food categories, leisure and travel services.’ There are inequalities, says Deloitte, with 31% of consumers saying their savings had increased and a similar 29% saying they had fallen. • Interestingly, ‘confidence about job security rose by six percentage points to -9% compared to Q4 2020 and sentiment around job opportunities and career progression gained seven percentage points to minus 12% over the same period. Encouragingly, recruiters have been reporting the strongest rebound in permanent hiring for six years in March. Job security is often instrumental in adding the desire to spend to the ability to spend. Turning to business, Deloitte says ‘CFOs also expect a strong recovery in the second half of this year following the planned reopening of the economy. A majority, just under 60%, report that demand for their businesses’ products and services has already returned to pre-pandemic levels or will do so by the end of this year. Of course, whether a strong recovery materialises is heavily predicated on the continued suppression of the virus.’ • Langton comment: See premium email Company & other news: • Deliveroo shares down 5p to 228p yesterday. The top of the indicated range at IPO was 460p, a little more than twice today’s share price.
• Everards of Leicestershire has updated saying that ‘71% of our pubs started trading again, week commencing 12 April with the remainder opening from 17 May.’ It says its tenants have ‘received rent cancellations, advice and services from the business. In the 12 months to March 2021, 73% of the pub estate rent roll has been cancelled.’ MD Stephen Gould says ‘the last 12 months have been intensely challenging for the hospitality industry’ but he adds ‘we are as well placed as we can be as we emerge from the lockdown. However, it is imperative that the Government Roadmap is delivered so that by 21 June all of our pubs can operate without Covid related restrictions. That will be the first step to recovery. Working with the Government, I think there is a long overdue opportunity to deliver lower taxation for beer duty, property rates and VAT for pubs. Such reform will directly invest into • Pret a Manger is reported to have secured a capital injection of £185m from its shareholders. In a report delivered to Companies’ House, the co says ‘the impact of coronavirus on the global retail and hospitality industry at the date of this report has been severe. Social distancing will continue to change consumer habits for some time, and may permanently affect where, when and how customers choose to enjoy Pret’s food and drink. Management’s priorities remain as the safety of Pret’s team members and customers, and protecting the business. It is still too early to know the full impact on the business due to the ongoing uncertainty.’ • Langton comment: See premium email • Meal kit company Gousto says it will take on 1,000 more staff after seeing sales grow during the pandemic. JET 2 TRADING UPDATE: • Jet2 has updated on trading saying that ‘as a result of the Covid-19 pandemic, the Board expects to report a Group loss before foreign exchange revaluation and taxation from continuing operations for the financial year ended 31 March 2021 of between £375m – £385m. It says ‘during FY21, Jet2 plc took swift and decisive action to raise close to £1.0bn in liquidity from a diversified range of funding sources, to mitigate the impacts of the Covid-19 pandemic. • Langton comment: See premium email HOTELS & LEISURE TRAVEL: • Hostelworld updated on trading at its AGM yesterday, saying that ‘booking volumes were weak throughout Q1 2021 with continued lockdowns and travel restrictions impacting demand. Domestic booking volumes are recovering, particularly in North and Central American markets.’ The company said its ‘liquidity position is strong with €38.3m of cash at bank as at 31 March 2021, including the new term loan facility signed in February 2021. The Group’s monthly operating cash outflow of €1.6 million is in line with expectations.’ Hostelworld says ‘we continue to expect the pace of recovery to be driven by changes in travel guidance in individual markets, which we hope to see accelerate as vaccination programmes are rolled out across our key geographies. In light of the continued market uncertainties, the Group’s full year guidance for FY21 remains suspended.’ • Leger Shearings Group says that domestic bookings are booming. It says ‘UK sales are akin to a January peak.’ It says ‘we envisage this will build when UK travel is confirmed on May 10 for tours departing from May 17’ but adds ‘bookings for European tours are slower than we would like albeit we’re well sold due to re-bookings. Bookings for Europe are primarily for September and beyond, and most for 2022, so having Shearings really helps – 90% of Shearings’ bookings are for this year.’ • Destination Analyst in the US reports that ‘American travel is indeed definitively on the rise. Now 71.6% say they will take a vacation or getaway between Memorial Day and Labor Day, up nearly 10 percentage points from last month and up nearly 36 percentage points from 2020.’ FINANCE & MARKETS: • Langton comment: See premium email 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 numbers • 28 Apr 21 888 Q1 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. |
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