Langton Capital – 2021-06-14 – 21 June, trading, staffing, BrewDog, JDW, Revolution Bars, Saga & other:
21 June, trading, staffing, BrewDog, JDW, Revolution Bars, Saga & other:
A DAY IN THE LIFE:
Spare a thought for your shoes.
Mine pretty much fell off my feet on Friday but, after perhaps 2yrs and c3.5 million steps, they had done pretty well.
And they have to be given some credit for preventing the rest of me from coming into too close a proximity with things that I don’t really want to think about too much; ancient bubble gum, dog mess and my feet to name but a few.
So, overall, they did pretty well and fully deserved the heroes send-off that I gave them; viz a one-way slide down the rubbish shoot.
Anyway, here’s a poser for you: If it takes four or five seconds to fill a kettle and perhaps 30 seconds to fill a toilet cistern, how long did it take to fill the Med (via the Zanclean Flood) when the wall at Gibraltar holding back the Atlantic failed? Answer above Pubs, below:
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Somewhere between two and 10,000 years. Or, indeed, a figure either side of those two numbers because, at the end of the day, the scientists are just making educated guesses (as indeed they are in other areas of our lives at present).
PUBS & RESTAURANTS:
Threat to 21 June:
• Government sources have told the Guardian that the lifting of all lockdown restrictions in England is likely to be delayed for up to a month from the planned date of 21 June.
• UKHospitality warns that the government must stick to its roadmap and lift all restrictions on 21st June or risk further jeopardising the future of thousands of hospitality businesses. UKHospitality CEO Kate Nicholls said ‘due to the amazing efforts of the NHS in rolling out vaccines, it is time to lift the restrictions that are crushing businesses.’
• The Night Time Industries Association says that over the past year the Night Time Economy has seen the loss of over 700,000 jobs, billions of pounds in revenue has left thousands of businesses, artists and creatives in financial hardship. The NTIA has urged the government to allow clubs, venues and events to open, saying ‘we will not survive if we are not able to open our doors.’
21 June removal of restrictions:
• Judging by the pre-briefings and mood-music, a delay to the removal of restrictions on 21 June is all but certain when Boris Johnson speaks later today. Sky quotes observers as saying that a delay to lifting lockdown is “inevitable” and it goes on to say that a narrow majority of the public would agree with that decision. Hospital admissions are rising at present (even given current, more modest lifting of restrictions) but deaths, thankfully, are only edging up slowly. An Opinium poll of 2,002 UK adults found that 54% thought the lifting of restrictions should be postponed, up from 43% two weeks ago, says Sky.
• Trade reaction. Although there has been a definite move towards a more cautious approach over recent days, hospitality trade bodies have said that any moves to delay un-lockdown would cause further damage to the sector. The Times reports ‘hospitality leaders have reacted with fury’ and says ‘more than 5,000 music gigs by artists including Olly Murs, Beverley Knight and McFly are also expected to be cancelled at a cost of £500 million.’ UKH says a four-week delay to the end of restrictions will cost pubs, bars, hotels and restaurants £3 billion in lost sales and £4 billion to the economy overall, reports The Times. A further 200,000 jobs in the sector could be lost.
• Langton comment: See premium email.
• The Drinks Recovery Tracker by CGA shows that LfL average sales were up by 41% and 55% on Sunday and Monday of the long weekend (30 and 31 May), compared to the equivalent week in 2019.
• The Scottish Beer & Pub Association (SBPA) predicts that Scotland fans will buy 360,000 pints when Scotland play Czechia in the Euros on Monday.
• KAM Media and the BBPA conducted a survey showing that 85% of pub-going football fans told us that the current restrictions will negatively impact their experience of watching the Euros. Half of respondents said they would be more likely to watch Euro 2020 at a pub if all restrictions on pubs are lifted.
Staffing issues and labour:
• The Daily Mail says hospitality bosses are saying ‘customers are desperate to get back in the pub – it’s our staff who are staying away.’ There were stories last week of operators cutting sessions (say Monday lunch etc) due to staff shortages. The Mail says ‘while business owners are desperate to make up for months of lost trading due to lockdown restrictions, a lack of available staff means many are having to operate their companies under reduced hours – such as remaining closed on Mondays or shutting early at weekends.’ The Telegraph puts it colourfully, saying operators are ‘out of frying pan into the fire as pubs and restaurants scramble for staff.’
• Langton comment: See premium email.
Companies & other news:
• The Times reports that ‘BrewDog is in danger of losing its ethical business certification in the wake of allegations of a toxic work culture.’ BrewDog says that it will learn and adapt after members of staff alleged bullying, hypocrisy re green issues and an overall climate of fear at the Scottish operator.
• BrewDog has appointed a director as its first chairperson. Blythe Jack is MD at BrewDog shareholder TSG Consumer Partners. Co-founder James Watt says ‘we have appointed our first ever chairperson to lead our board. That will be Blythe Jack and we are delighted she will be leading our business at board level. This is effective immediately.’
• Revolution Bars Group has announced the result of its Open Offer saying that ‘a total of 105,001,866 New Ordinary Shares will be issued at the Issue Price (subject to the conditions noted below), of which 5,001,866 New Ordinary Shares will be issued pursuant to the Open Offer and 100,000,000 New Ordinary Shares (the “Firm Placing Shares”) will be issued pursuant to the Firm Placing.’ It says the Firm Placing Shares are not subject to clawback and were not part of the Placing and Open Offer.’
• JD Wetherspoon is reported to have transported staff from other parts of the country to work at one of its pubs near to one of the G7 Summit sites. The company said earlier in the month that it was experiencing some staffing shortages at seaside sites, which it pointed out was normal at this time of year. The company also says ‘we can confirm that four members of staff have tested positive for Covid-19 at the Towan Blystra on Cliff Road in Newquay.’ It adds ‘in accordance with NHS guidelines, these employees are required to self-isolate for the requisite ten-day period.’
• The SBPA has ‘produced practical guidance for pubs [North of the Border] to help ensure screenings are a success and customers and staff are kept safe during the tournament.’ The aim is ‘to ensure a safe environment for both customers and staff, whilst enabling people to enjoy the much-missed freedom of visiting the pub to watch the football once more.’
• US Trade journals suggest that perhaps 3% of restaurants have permanently shut in the US.
• Some reports of shortages of garden furniture and sharp price rises. This will impact both the on-trade and home BBQs.
• In the US, New York City’s City Council is considering a bill that would allow restaurant surcharges of up to 15%. Restaurants would only be allowed to use these surcharges if they pay all of their employees the city’s minimum wage of $15 per hour before tips.
• Over 500 Stonegate pubs will be showing every match from the Euros, with customers having the chance to win 15 pairs of tickets via the company’s We Love Sport app.
• The Wall Street Journal reports that McDonald’s systems in the US, Taiwan and South Korea were hacked according to the company, impacting customer and employee information.
• Brown-Forman, owner of Jack Daniel’s, reports that increased sales of Ready-To-Drink beverages helped boost sales. The company reported Q4 net sales of $812m, up 14% yoy.
• MusicMagpie reports revenue up 3.4% to £72.5m with EBITDA up 14.8% to £6.2m in the first reporting period for the company since its £208m flotation in April. The company said growth was driven by a growing trend of consumers adopting circular economy models to recycle and reuse items.
HOTELS & LEISURE TRAVEL:
• Saga has updated on Q1 trading saying that it has made ‘further progress against strategic priorities.’ Langton comment: See premium email.
• Supercity Aparthotels has secured a new site in the city of York. The site is due to open in 2023.
• Travel Weekly reports on holiday enquiries saying ‘demand for this summer has flattened and consumer confidence fallen further following Portugal’s removal from the green list.’ Operators report ‘an immediate drop off in sales’.
• Premier Inn owner Whitbread could face some opposition this week at its AGM (and Q1 trading update) on 17th. Sky reports that ‘one of the City’s most influential voting services, IVIS, has red-topped Whitbread’s remuneration report ahead of its annual meeting next Thursday.
• Travel Trade Gazette reports that Celebrity Cruises, which is owned by Royal Caribbean, has confirmed two guests have tested positive for Covid-19 onboard Celebrity Millennium.
• The CAA reports that air passenger numbers in the UK fell by 223 million to around 74 million. The airport showing the largest drop was Cardiff, down 86.7%, followed by Glasgow Prestwick, which saw a decline of 85.8%. Heathrow was down by 72.7m.
• STR reports that, as more hotels reopen in the US, occupancy stats are being restrained. STR’s Market Recovery Monitor shows that revenue per available room for the week of June 5 was just 77% of the level achieved during the same week in 2019. This is the highest level of the past 65 weeks.
• STR reports that the UK is leading the hospitality recovery in Europe with a rebound faster than in China or the US. Robin Rossmann, STR managing director, said ‘In the space of two to three weeks seven-day occupancy for open hotels reached 60%-65% [in the UK].’
• Following the Scottish government’s decision to ban passenger vessels from calling into the country’s ports, Saga has had to change two UK cruises on Spirit of Discovery.
• Airline leaders have been told that the European Commission is committed to a resumption of international travel within the EU from July 1.
• Stobart Air has ceased trading and is in the process of appointing a liquidator. The company operated regional flights on behalf of Aer Lingus.
FINANCE & MARKETS:
• ONS data shows that the UK economy grew 2.3% in April, its fastest monthly growth since July last year. It says High Street rose on the reopening of non-essential shops and says there was also more spending in pubs, cafes and restaurants. Construction output was modestly lower. Chancellor Rishi Sunak said that the data were “a promising sign that our economy is beginning to recover”.
• The NIESR says ‘another month of rapid service sector growth in April was driven by the re-opening of sectors affected by Covid-19 restrictions, resulting in a 2.3 per cent growth in monthly GDP almost in line with our May Tracker forecast. We expect the recovery to have continued in May and June, forecasting monthly growth of 1.5 per cent and 0.9 per cent respectively.’ It says ‘like March, April was a month of rapid growth in services output, as anticipated, driven by the re-opening of non-essential retail, outdoor hospitality and near-full attendance in schools. May will follow a similar pattern, as further restrictions are lifted, as will June if the final step of the roadmap goes to plan. But falls in construction and production, which were less affected by the 2021 lockdown, remind us that our focus should now be on the prospects for the economy in the second half of the year,
• The CEBR says that the economy will take a £1.6bn hit if ‘Freedom Day’ is delayed by four weeks. Langton comment: See premium email.
RETAIL WITH NICK BUBB:
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 8 Jun 21 DP Eurasia AGM
• 9 Jun 21 SSP H1 numbers
• Est 9 Jun 21 Barclaycard Consumer Spending report
• 10 Jun 21 Compoir FY numbers
• 15 Jun 21 Vianet full year numbers
• 15 Jun 21 On the Beach H1 numbers
• 17 Jun 21 Whitbread AGM & Q1 trading update
• 22 Jun 21 Coca Cola HBC AGM
• 24 Jun 21 Bank of England MPC meeting
• 30 Jun 21 Constellation Brands Q1
• 8 Jul 21 Fuller’s FY numbers
• 13 Jul 21 Pepsi Q2 numbers
• 23 Jul 21 Premier Foods AGM & Q1 update
• 27 Jul 21 Campari H1 numbers
• 27 Jul 21 Games Workshop FY 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
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