Langton Capital – 2021-05-06 – The ‘new normal’, rental debt, Krispy Kreme, 17 May holidays etc
The ‘new normal’, rental debt, Krispy Kreme, 17 May holidays etc:
A DAY IN THE LIFE:
I was ticked off the other day for not mentioning that the Mighty Hull City had been crowned champions of Division One with a whole one game remaining.
And no small thing that was too. Our first silverware since Adam was a lad (actually, since 1966) and the first time we’ve won anything worth winning since decimalisation.
Although that’s not quite true because, since I started taking our lads to City matches, we’ve been promoted seven times (including three times into the Premiership) and have been demoted four times – and that’s more than bigger teams such as Arsenal, Liverpool or Everton can say.
I took them to see us beat York 2:1 and then put five divisions between us over the next ten years. They were mascots at Barnet, we’ve been given strong advice on where we should go and how we should do it by opposing fans at Craven Cottage, The Emirates, Wembley and Upton Park and still my daughter hasn’t seen them win a match.
Or even score a goal, she tells me. Of course, she’s only fifteen and these things take time but it does bring home to us that, in a season when we won more game than any other season in living memory, we haven’t been to a single match.
Anyway, here’s some Hull for you:
• Is Glare Bull Worming a veterinary procedure or the product of too much CO2 in the atmosphere?
• Is Earl Fur the ermine they wear in the House of Lords or a TV channel?
And we could go on but we won’t. Here’s the news:
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PUBS & RESTAURANTS:
Later news making it into the premium email:
• AB InBev Q1 numbers, Virgin Wines update, Puttshack fund raise, Carnival restart, Uber legal issues etc.
Returning to more ‘normal’:
• Getting out of the house. Nielsen has reported that supermarket till sales grew in April whilst online sales growth, although still positive, slowed to 25% up year on year in April versus up 92% in March. Before reading too much into the slow-down, it’s worth pointing out that the comps for online sales will have got much more challenging next month. Public transport stats are edging higher.
• Less working from home. Some companies are asking their staff to return to the office. Bloomberg reported earlier in the week that Goldman Sachs has told its bankers in the US and UK that they should return to the office next month. The bank stresses the importance of ‘coming together’ saying in a memo ‘we look forward to having more of our colleagues back in the office so that they can experience that once again on a regular basis.’
• Social contact. Demand, although buffeted by the weather, has been generally good – at least for operators that have outside space, particularly those who made dome effort – since pubs and restaurants were allowed to serve customers outdoors on 12 April. Last Monday, quite literally in many cases, was a washout, but stats, particularly in the first and second weeks of reopening, were relatively buoyant.
• Ordering at the bar. The Telegraph reports ‘JD Wetherspoon, Greene King, Slug & Lettuce owner Stonegate and Young’s are all plotting a return of bar service from June 21, the earliest date that Covid restrictions are expected to be lifted.’ JDW’s Tim Martin says table service could be a ‘legacy of the pandemic’ with customers continuing to order from online apps.
• Langton comment: See premium email.
Other Covid news:
• Rental debt, one of the elephants in the room: UKH has said that the £2.5b rent debt overhanging the hospitality industry threatens thousands of businesses and over 330,000 jobs. The current eviction moratorium expires at the end of next month. The government had solicited comment on any potential solution with comments to be in by Tuesday this week. UKH says 52% of the 730 companies that it contacted had not been given any extension on rental payment terms with 73% either unable to or unaware how they can pay their rent arrears.
• Langton comment: See premium email.
Company and other news:
• Krispy Kreme, which is owned by German food conglomerate JAB Holdings (which also owns Peet’s Coffee, Douwe Egberts, Dr Pepper, Panera Bread and Pret a Manger), has filed a draft registration for an initial public offering in the US with the Securities and Exchange Commission. JAB took the company private some 5yrs ago. NRN in the US reports that the number of shares Krispy Kreme will offer and the price range for the IPO has not yet been determined. The IPO will take place after the SEC completes its review process of the draft registration. Restaurant Dive reports that ‘the company’s financial circumstances improved under JAB Holdings, increasing global sales by 58% to $960 million since 2015.’
• Walgreens Boots Alliance is to partner with DoorDash Inc, Uber Technologies Inc and others to launch same-day, under 2hr delivery, in the US. Deliveroo has said that it sees some areas of general retail in the UK as potential areas for further expansion.
• New World Trading Company is to open a second venue in Sheffield. The Furnace will open later this year.
• The BII has awarded Kate Nicholls, CEO of UK Hospitality, its Franca Knowles Live your Life Award ‘for devotion of energy, spirit and life to the hospitality sector.’
HOTELS & LEISURE TRAVEL:
• Possible 17 May restart. Travel Weekly reports a ‘leading industry source’ as saying that the reopening of the travel sector is due to gather momentum this week despite cautious words from government. Traffic light colours will be ascribed to countries at the end of this week. Some two weeks’ notice should then be given if a country is to lose its ‘green’ status. TW says its source believes ‘the restart “will be cautious”, but said: “We’ve heard there will be reviews every one, two or three weeks. We’d hope for a review more often than three weeks, but one or two weeks wouldn’t be an issue.’
• Langton comment: you need both supply (from the industry) and demand (from consumers) if the industry is to pick up again. Operators are keen to supply holidays. Of course they are but, from the point of view of the holidaymaker, there are still a lot of unknowns. Which country will be on which list? Can we get insurance in case a destination shifts from one colour to another between holiday booking and departure? What will be open in resort? What happens if the colour changes while we are out of the country etc.?
• The TTG reports that ‘despite hopes of take-off this month, a TTG poll of 700 readers found just 40% were confident of a stronger summer this year than last year.’
• Langton comment: See premium email.
• Exercise bike and treadmill company Peloton has recalled about 125,000 treadmills in the US after the death of a six-year-old child and up to 72 reports of injuries ranging from cuts and bruises up to broken bones.
IN YESTERDAY’S PREMIUM:
• Britvic announced the acquisition of Plenish, ‘the plant-based milks, cold-pressed juices and shots company, and one of the most exciting brands in its category in Great Britain.
• Carnival Cruises has announce that its Australian business has extended its ‘temporary pause in operations’ to 17 September, 2021.
• Ride-hailing company Lyft yesterday reported Q1 numbers saying that revenues rose to $609m with a loss per share of 35c against the loss of 53c expected by analysts.
• Playtech has announced that it has ‘signed a new, expanded long-term strategic software and services agreement with Holland Casino.
FINANCE & MARKETS:
• Chancellor of the Exchequer Rishi Sunak has ruled out a wealth tax. City AM suggests he is also watering down suggestions that he may crank up the take from Capital Gains Tax. Speaking of the general economy and the tax take therefrom, Sunak says ‘as we look forward to reopening over the coming weeks and months, there are signs to be cautiously optimistic and we can see that in the data. I’m hopeful that will be sustained through the rest of the year.’
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