Langton Capital – 2021-07-19 – Freedom Day, Tracker, pingdemic, JDW, Flutter, Hawksmoor, Boparan etc.:
Freedom Day, Tracker, pingdemic, JDW, Flutter, Hawksmoor, Boparan etc.:
A DAY IN THE LIFE:
Well, one’s never pleased to see the back of a weekend and it’s fair to say, that that one was a scorcher.
Which is a bit of a mixed blessing, of course.
Because Brits melt above 25 degrees. Forget fifty degrees in Vegas. That’s just illegal. For the UK, thirty is the real fifty and it means that working outside (something we referred to on Friday as an urge that overtakes us all from time to time) was an impossibility and, with residential air conditioning only a fond dream during the week or two every couple of years that it’s needed, there wasn’t much work getting done inside, either.
Yet here we are on Monday again, it comes as regular as clockwork and, for once, it was relatively pleasant as well as sensible to get up at stupid o’clock to make a bit of progress before the needle’s rise means that we’ll be sticking to our seats and dripping onto our keyboards again.
Indeed, a bit of a breeze would be nice. You might catch on the coast but, before minds drift on towards holidays, beaches and the like, let’s move on to the news:
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JUNE SALES TRACKER:
The latest Coffer Peach Business Tracker suggests that sales across the industry in June were down only 1% on the same month in 2019.
• Sales were down 1% on 2019 on the month but, in a sign of the damage done prior to last month, rolling 12mth sales are down 27%.
The month of June:
• The Tracker ‘shows sales were nearly level on both a total and like-for-like basis,’ with the same month in 2019. It adds that June was markedly better than May, when total sales were down by 26% on May 2019.
• Further comment. See Premium Email.
PUBS & RESTAURANTS:
Easing of restrictions & Covid news:
• The BBPA reports that 6 in 10 pub goers say they are looking forward to meeting up with friends and family more easily at the pub from 19 July. The study, conducted by KAM Media, saw that 47% of Brits said they were looking forward to the atmosphere returning to normal when restrictions end.
• Emma McClarkin, CEO of the BBPA, said ‘After nearly 18 months of closure or heavy restrictions, this is a huge moment for our sector. Only now can the recovery of our pubs and breweries begin.
• The government is set to extend pavement licenses by a year until the end of September 2022 to aid the recovery of pubs, bars and restaurants. The Ministry of Housing, Communities and Local Government (MHCLG) indicated that the change could become permanent.
• Robert Jenrick, Secretary of State for Housing, Communities and Local Government, has received a letter from The One Voice group of hospitality industry and consumer trade bodies welcoming the move to extend Pavement Licenses. The group said ‘We will now need a consistent, collaborative and pragmatic approach from Local Authorities to ensure that the spirit of this decision is reflected locally, in order that hospitality can truly take advantage of this permanent expansion of their outside areas.’
• The Society of Independent Brewers (SIBA) has said the government’s hospitality plan is ‘very positive’ but added ‘ if the Government’s proposed changes to Small Breweries Relief go ahead then it will all be for nothing and hundreds of local breweries across the UK could be forced to close.’
Staff shortages, pingdemic etc:
• With a number of industries going without workers and some workers going without pay, having to cancel weddings etc, it’s not clear yet what, if any, backlash there may be as a result of the PM and chancellor apparently seeking (or at least momentarily investigating the possibility of) swerving the need to self-isolate over the weekend. The speed of the U-turn suggests that the original proposal, to do what Michael Gove did earlier and not self-isolate, wasn’t going down too well with bank-benchers or focus-groups.
• Further comment. See Premium Email.
• The AA has pointed out that petrol prices are currently at their highest level in almost eight years. The elevated petrol price along with the need to pay scarce lorry drivers more money, will result in higher transport costs. This will be pervasive across the economy.
• The Insolvency Service reports that in June 2021 there was a total of 1,207 registered company insolvencies across England and Wales. This consisted of 1,116 creditors voluntary liquidations (CVLs) – twice the amount in June 2020, 39 administrations – 61% lower to that in June 2020 and 38 compulsory liquidations – 46% lower to that in June 2020.
• CFNA data shows that the volume of imported spirits increased significantly from January to May 2021, up 117% year on year to $780m.
• RT cites a survey showing that 38% of Russians never touch a drop of alcohol, while just 1% of the survey’s respondents claimed to drink on a daily basis. 51% of all respondents over the age of 60 said that they shun alcohol.
• The Daily Mail reports that there are further moves to ensure that restaurant tips are passed on to staff. It reports there are ‘calls grow for new laws to put an end to restaurant bosses pocketing tips intended for staff.’ Just how widespread the pocketing of employees’ tips is, is unclear. The Mail says ‘restaurant owners are banned from keeping cash tips left for waiting staff, but there’s nothing to stop them taking a cut when the bill is settled by debit card.’ This is true but most reputable operators will take either nothing or a small amount to cover administration and other costs.
• Public Health England has released data suggeseting that around 7,000 people died from alcohol misuse last year, a number up 20 per cent on 2019. Whilst pubs & restaurants were shut for much of the year, sales of alcohol from supermarkets rose by around 25%.
• J D Wetherspoon has announced that starting from 19 July the company will retain measures such as floor screens, hand sanitizers at the entrance and at various locations, maintain increased cleaning, maintain directional signage, increase natural ventilation, encourage customers to use the order and pay apps, maintain internal capacity in pubs at the same levels as today and maintain current reduced capacity limits for employees in staff rooms.
• However, customers and employees will be able to wear face masks at their discretion, group sizes will not be limited to six and the NHS Test & Trace system, or paper forms, will be voluntary.
• Tim Martin, chairman, said ‘While risks from COVID-19 cannot be eliminated completely, we believe that the July 2020 guidelines are a sensible backstop for the industry and strike a fair balance between health, employment and the economy.’
• Today’s news from Naked Wines, Hawksmoor, Boparan Restaurants, Ocado, Morrison’s, Flutter, Cineworld see premium email.
• The price of shares in Soho House dropped almost 10% in its US market debut from its $14 listing. The company owns the 28 Soho House clubs, including Soho Farm House, which together have around 119,000 members and host A-list celebrities such as supermodel Kate Moss and actor Eddie Redmayne.
• Oakman Group will retain table-only service from Monday, citing health and safety of their customers and staff. The company will retain all their existing Covid measures including screens between tables, hand sanitiser stations and high-intensity and regular cleaning regimes, however, facemasks will not be insisted upon.
HOTELS & LEISURE TRAVEL NEWS:
• From 19 July, all Britons who have had two Covid jabs heading back from amber list countries were told they would not need to complete up to 10 days’ isolation at home. However, travellers returning to England from France will still be forced to quarantine next week even if they are double-vaccinated.
• Per STR, US hotel demand grew only 3% week to week, with 26 million room nights sold for the week ending July 10, and U.S. hotel industry occupancy reached 67.2%. Weekly U.S. hotel demand for the week was 92% of what it was during the comparable week in 2019.
• Travel Weekly has reported that, when leaving to return to the UK, enhanced checks at airports in destination could cut waits for passengers in the UK (but possibly lengthen them in resort).
• Bulgaria has banned UK travellers from entering the country. This comes just days after the UK government moved Bulgaria to its green list and confirms that, as mentioned before, you need two to tango. The above has not surprisingly led to holidays being pulled, not least because they would have consisted only of a sit on the tarmac before passengers would have had to return to the UK. Jet2 says ‘as a result of the Bulgarian government’s travel restrictions, we have suspended all flights and holidays to Bourgas up to and including 31st July 2021.’ It goes on to say ‘all affected bookings will be cancelled with a full refund excluding any previous administration or cancellation fees.’
• Flutter & Cineworld, see premium email.
FINANCE & MARKETS:
• The Bank of England seems to be edging towards accepting that inflation is currently a bit of a thing. MPC member Michael Saunders has said it might be appropriate “fairly soon” to reduce the level of stimulus provided to the economy. It’s worth remembering that this is a part of a process. First scale back help, then remove it altogether and then, and this has not been attempted before, the assets acquired by the Bank will need to be sold back into the market.
• Deputy governor of the Bank of England Dave Ramsden has said that he could see inflation rising to 4% later this year. It is currently 2.5% in the UK (but, interestingly, it is 5.4% already in the US).
• The Telegraph runs a piece saying that the spread of the Delta variant could ‘derail the UK’s recovery.’ It says forecasters are warning that it could dampen spending over the summer.
• Sterling weaker at £1.3755 and €1.165. Oil price lower at $72.90. UK 10yr gilt yield down 4bps at 0.63%. World markets lower on Friday & London set to open down around 53pts as at 7am.
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Upcoming results are set out below:
• 13 Jul 21 Pepsi Q2 numbers
• 13 Jul 21 DP Poland Q2 update & presentation
• 14 Jul 21 DP Eurasia H1 trading update
• 15 Jul 21 Just Eat Takeaway H1 trading update
• 19 Jul 21 Compoir AGM
• 20 Jul 21 Young & Co AGM
• 21 Jul 21 Loungers FY numbers
• 21 Jul 21 Nichols H1 numbers
• 22 Jul 21 Britvic Q3 update
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• 27 Jul 21 Campari H1 numbers
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• 28 Jul 21 Marston’s Q3 trading update
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• 30 Jul 21 DPP AGM
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• 5 Aug 21 Bank of England MPC meeting
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• 2 Sept 21 Jet2 AGM
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• 1 Oct 21 JW Wetherspoon
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
• 24 Nov 21 Britvic FY numbers
• 8 Dec 21 TUI FY numbers
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