Langton Capital – 2021-06-25 – Unlocking concerns, ads, Deliveroo & delivery, GfK, Brighton Pier etc.:
Unlocking concerns, ads, Deliveroo & delivery, GfK, Brighton Pier etc.:
A DAY IN THE LIFE:
The corporate Disney machine might have a different view but nature is, I’m beginning to suspect, ruthless, unemotional and cruel because, though our bird feeders are absolutely awash with newly-fledged juvenile birds at the moment, this never seems to last.
Perhaps it’s because they go to play in someone else’s garden?
I’d like to think so but, as we’ve got at least one pair of fat and happy sparrow hawks checking their patch every couple of days, perhaps not. On to the news:
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PUBS & RESTAURANTS:
Working from home:
• Per the BBC, Citigroup plans for staff to work from the office for three days a week, with boss James Bardrick saying ‘business works best from being together…what we are saying is that, yes, use greater flexibility, but to do your job well, to develop as an employee, to get the best out of yourself and for the team, we need to be together.’
The outlook for 19 July:
• 19 July has been billed as a firm end-date. However, with an R rate of 1.4 and a large section of the population (including all children) still unvaccinated, the numbers could look ‘worse’ on 19 July than they did on 21 June. Some 16,000 new confirmed Covid cases were reported in the UK on Wednesday, the highest daily figure since early February and, though the number of hospitalisations and deaths is lower as a percentage of infections due to the younger unvaccinated population, deaths are running at around a ten week high. Although the race between vaccine rollouts and the virus may be tight, there is much political capital that has been expended on 19 July being a backstop date. Any vague hopes re 5 July are unlikely to be fulfilled.
• The government is set to announce a ban on junk food advertising online and before 9pm on TV from 2023, as part of an election pledge to tackle the UK’s growing obesity crisis. The online ad ban would affect all paid-for forms of digital marketing, from ads on Facebook to paid-search results on Google, text message promotions, and paid activity on sites such as Instagram and Twitter.
• The proposed ban on advertising foods high in fat, sugar and salt pre-9pm on TV will impact the UK’s large fast-food restaurants. However, ‘small’ companies (which probably can’t afford to advertise on TV anyway) are excluded and online advertising will still be allowed. The children that the legislation is intended to protect are not likely to be big consumers of TV with ads.
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• Interestingly, San Francisco’s Board of Supervisors has approved a resolution to permanently cap food delivery fees charged to restaurants at 15%.
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• Meanwhile, 70% of 16-34 year olds now feel comfortable visiting the centre of town, as do 62 per cent of Londoners as a whole. Confidence has also increased about the capital’s economic rebound, with Londoners feeling more optimistic about their job prospects.
• The number of workers furloughed fell to its lowest since the start of the pandemic with 6% of workers (1.5m people) on the scheme in early June.
GfK Confidence measures:
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Companies & other news:
• Vegan fast food brand Ready Burger has exceeded its £1.5m crowdfunding target within hours. With 29 days left on its Crowdcube campaign, Ready Burger has raised £1.76m from 369 investors.
• On Trade Consultancy is welcoming a new client in Hospitality Services this week, Bupp. Bupp is a reward points exchange that gives points earners ways to do more with their points because they can redeem them on more things, from product purchases, points auction to good causes. The company says it is ‘delighted to be partnering with On-Trade Consultancy’ and adds ‘we are thoroughly looking forward to working with them and gaining access to their incredible network and connections within the hospitality industry.’
• Hawksmoor will open its biggest restaurant yet at a site in Wood Wharf, Canary Wharf. The three-floor restaurant will include a 150-cover dining room and 120-cover bar.
• Heineken has acquired control of United Breweries Ltd, the largest brewer in India, after buying an additional 39.6 million shares in UBL to push its holding to 61.5%, up from 46.5%. UBL is the maker of India’s top-selling Kingfisher lager.
• Pernod Ricard forecasts organic profit growth of about 16% for its 2020/2021 fiscal year, up from a previous April forecast of 10%. The drinks group said off-trade continues to be resilient, while on-trade demand is accelerating as restrictions are progressively lifted.
• Nanias, a vineyard based in Bristol, has started a crowdfunding campaign to gauge potential interest in three new still wines; the first of which, will be England’s first orange wine in a can.
• In the US, IWSR Drinks Market Analysis figures show that alcohol consumption in the US was up by 2% in 2020. The IWSR has predicted that by the end of the year, alcohol volume sales in the US will be up by 3.8% year on year, while value sales will be up by 5.5%.
HOTELS & LEISURE TRAVEL:
Green List expansion:
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Trading & outlook:
• Boris Johnson said there is a ‘real opportunity’ to open up overseas leisure travel for those who have received both jabs. Johnson said ‘I’m not going to claim that this summer, for travel purposes, is going to be like any other summer. I don’t want to cast a pall over things but, as I said the other day, it will be different.’
• It takes two to tango. It’s one thing the UK saying that travellers returning from certain countries needn’t self-isolate, but it’s another to assume that destination countries will grant them access. German Chancellor Angela Merkel has said travellers from the UK should be quarantined wherever they arrive in the EU, in a move to slow the growth of the Delta variant on the continent. Merkel has criticised Portugal in recent days, where the entry of British tourists is permitted without quarantine.
• Travel Supermarket reports that the majority of new holiday interest, and bookings, is for December and beyond due to the ongoing ‘lack of clarity’ around international travel. Only 21% of this year’s bookings were made for June, July and August combined, whereas 53% of bookings on the site where made for holidays in 2022.
• Proposals have been submitted for 24 luxury holiday lodges, a reception building, and new landscaping on a site northwest of Beamish Hall, County Durham. The development is also expected to sustain a host of local businesses.
• STR reports that U.S. weekly hotel occupancy hit its highest level in 85 weeks in the week to 19 June. Occupancy was 68% (down 10% on 2019) and room rates were down 4.4% to give REVPAR some 13.8% lower than two years ago.
• Carnival Corporation yesterday updated on Q2 trading saying that it made a net loss of $(2.1) billion and adjusted net loss of $(2.0) billion over the 3mth period. The group says it ended Q2 ‘with $9.3 billion of cash and short-term investments, which the company believes is sufficient liquidity to return to full cruise operations.’ It adds that ‘customer deposits increased in the second quarter of 2021 compared to the previous quarter’ and says ‘cash burn rate in the first half of 2021 was better than forecasted primarily due to the timing of proceeds from ship sales and working capital changes.’
• Chief Executive Officer Arnold Donald says ‘we are working aggressively on our path to return our full fleet to operations by next spring. So far, we have announced that 42 ships, representing over half of our capacity, have been scheduled to return to serving guests by this fiscal year end.’ The company says it ‘is uniquely positioned for its phased resumption in cruise travel given its multiple brands which are being restarted independently and tailored to the environment of their respective source market. Eight of the company’s nine brands either have resumed or have announced they plan to resume guest cruise operations by the company’s fiscal year end, November 30, 2021.’
• Carnival says ‘despite our minimal advertising spend, we continue to experience an acceleration in booking trends globally, including capturing significant latent demand for our new sailings this summer. This strong demand affirms confidence in our future. In addition, customer deposits grew this past quarter, a significant milestone on our path to resumption.’ The group says ‘booking volumes for all future cruises during the second quarter of 2021 were 45% higher than booking volumes during the first quarter of 2021. Cumulative advanced bookings for full year 2022 are ahead of a very strong 2019 as of May 31, 2021.’
• Landal GreenParks, which was recently sold by previous owner Hoseasons to Roompot, has added three new UK destinations to its portfolio. It says it has seen a “surge in demand” for domestic holidays this summer and Landal now has 10 parks in the UK.
• Marriott has said it will not require its employees to be vaccinated against COVID-19 to work at its units.
• Nielsen reports that streaming of programmes in the US, which received a major boost because of the lockdowns that accompanied the Covid-19 pandemic, is now responsible for 26% of all time spent on TV. Nielsen says ‘the past year has categorically shifted the television viewing landscape. Even as people begin to dive back into their pre-pandemic activities, based on the changes many made to enable streaming coupled with the variety of newly introduced services, we expect people to keep sampling and exploring their options. Maybe just as importantly, as production ramps back up, new content will enter the space, driving additional traction.’
• EA has announced that it is acquiring Warner Bros. Games’ mobile gaming studio Playdemic for $1.4bn all-cash. Playdemic is a Manchester based studio best known for its release ‘Golf Clash’.
LATER NEWS – SEE PREMIUM EMAIL:
• GfK Confidence measures flat June on May.
• Deliveroo. Court confirms riders are self-employed.
• Heavitree Brewery swings to H1 loss.
• Burger Kind is to open a unit in Parkdean Resorts Trecco Bay holiday park.
• Brighton Palace Pier has overcharged customers due to computer error.
• Darden Restaurants says delivery sales are ‘stickier’ than it had expected.
• Green List expansion. Balearics on etc.
• Markets, Sterling, oil, interest rates
FINANCE & MARKETS:
• Bank of England. As expected, the Bank changed nothing yesterday. It reports ‘at its meeting ending on 22 June 2021, the Committee judged that the existing stance of monetary policy remained appropriate.’ It voted unanimously to maintain Bank Rate at 0.1% and also voted unanimously to maintain the stock of bond purchases at £20 billion. It voted 8-1 ‘to continue with its existing programme of UK government bond purchases, financed by the issuance of central bank reserves, maintaining the target for the stock of these government bond purchases at £875 billion and so the total target stock of asset purchases at £895 billion.’
• The Bank said it expected inflation to go above 3% “for a temporary period”. It says ‘the near-term strength in inflation is expected to be transitory.’
• The Bank of England said it now expected the UK economy to recover faster than it had previously predicted. Outgoing MPC member Andy Haldane had said that now was the time to wind down the stimulus to the economy via QE.
• The business confidence tracker produced by the Institute of Directors rose to 27 points in June, up from 14 points at the end of Q1. The IoD says this is the highest level of business optimism since it began recording its members confidence in July 2016, in the wake of the Brexit referendum.
• Sterling down at $1.3921 and €1.166. Oil price up at $75.67. UK 10yr gilt yield down 3bps at 0.75%. World markets better yesterday and London set to open around flat.
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• 22 Jun 21 Coca Cola HBC AGM
• 23 Jun 21 UK Markit Flash PMI numbers
• 24 Jun 21 Carnival Cruises Trading Update
• 24 Jun 21 Bank of England MPC meeting
• 25 Jun 21 GfK Consumer Confidence
• 28 Jun 21 Escape Hunt AGM & Q1 update
• 30 Jun 21 Constellation Brands Q1
• 8 Jul 21 Fuller’s FY numbers
• 13 Jul 21 Pepsi Q2 numbers
• 21 Jul 21 Loungers FY numbers
• 23 Jul 21 Premier Foods AGM & Q1 update
• 27 Jul 21 Campari H1 numbers
• 27 Jul 21 Games Workshop FY numbers
• 30 Jul 21 DPP AGM
• 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
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