Langton Capital – 2021-07-23 – GfK, delivery & takeaway, Covid passports, WFH, cruises & other:
GfK, delivery & takeaway, Covid passports, WFH, cruises & other:A DAY IN THE LIFE: I don’t know if it’s nostalgia for the long lost days when Donald Trump was president, or whether it’s something – or somebody closer to home – but I was thinking of lies and lying the other day. Because, like driving offences (careless driving, reckless driving, dangerous driving, manslaughter and murder), there must be some sort of scale at work and, in parallel, like a tree that falls in the forest when nobody’s watching, perhaps a lie isn’t even a lie if nobody finds out. Rambling a bit here but surely all of us ‘lie’ when we say something that we believe to be true – but we’re wrong. AKA the: ‘are you a liar or an idiot’ position. And some will ‘lie’ when they say things that they hope is true or just want very much to be true. These comprise optimists, naiveties, fantasists or nut jobs. Others lie if they believe they’ll never be found out. In which case it simply didn’t happen but still others lie because it’s a default position and they have the dexterity to hold a number of contradictory statements in their head at any one time. And these are a fascinating study because they maybe know that, even if they live to 100, they’ll never run out of new people to disappoint and, with that in mind, they’d better get cracking as soon and as often as possible. 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: CGA HOSPITALITY AT HOME TRACKER (comment on delivery & takeaway): Summary: • CGA reports that delivery and takeaway sales in June this year are running at triple pre-Covid levels for restaurant and pub groups • The Tracker concludes that ‘more than a third of managed groups’ sales’ now come from food delivered or taken away by customers Further detail: • CGA says ‘deliveries and takeaways remain a core part of managed restaurant and pub groups’ sales despite the return of eating-out.’ • It says that ‘sales in June were 225% higher than in June 2019—a drop on growth figures of 345% in April and 273% in May, reflecting the return of the majority of restaurants and pubs for the first full month of indoor service of 2021 in June.’ • The Tracker reports that ‘deliveries and takeaways accounted for 35% of managed operators’ total sales in June, with eat-in contributing the remainder (65%).’ • Both delivery and takeaway sales have risen, but CGA reports that delivery sales have risen four times as rapidly as takeaway. It says ‘the emergence of third party ordering platforms in recent years means the volume of deliveries now exceeds that of takeaways and click and collect orders.’ • Further comment. See premium email. PUBS & RESTAURANTS: Trading: • GfK has updated on consumer confidence in the UK saying that it rose to minus 7 in July and is edging ahead of pre-pandemic levels. The company says ‘GfK’s long-running Consumer Confidence Index increased to -7 in July. Two measures were up in comparison to the June 25th announcement, two measures were down and one stayed the same.’ It says confidence ‘has held firm or improved for six months in a row.’ GfK says ‘personal finance expectations for the next year remain strong and there’s a dramatic jump this month in our major purchase sub-measure with shoppers agreeing that now is the ‘right time to buy’. The healthy seven-point rise aligns with strong retail growth figures that reflect the gradual unlocking of the UK high street and release of pent-up demand as Brits hit shops, restaurants and venues.’ • Further comment. See premium email. • Christie & Co reports that the pub market remained buoyant in the first half of 2021 in its mid-year review of the UK pub and restaurant markets. The report also noted that there was a challenging backdrop of a third national lockdown and prolonged period of operating restrictions. For the UK restaurant market, the last six months was a very tough period for operators, with the decline in the value of the eating out market was expected to reverse in 2021 but this is now likely to happen by the end of 2022. Staffing issues: • Key headwinds in the first half of the year included the ongoing restrictions as well as the shortage of staff returning to the workforce, due to a combination of Brexit and furloughed workers leaving their jobs for alternative work. On the other hand, the takeaway and delivery sector continued to boom and investors remained most attracted to freehold opportunities in rural and coastal tourist-led locations, which capture trade from staycations The pingdemic: • Per the Guardian, the ‘pingdemic’ staff shortages are leading to supermarkets having trouble keeping shelves stocked. The government is being urged to include supermarket staff, lorry drivers and other frontline workers on a list of those exempted from self-isolation rules if they get tested daily. • Per the BBC, the British Retail Consortium urges the government to ‘act fast’ to allow fully vaccinated retail staff or those who have tested negative for coronavirus to go to work. One supermarket, Iceland, has revealed almost 4% of its staff, about 1,000 employees, were currently off for Covid-related reasons. • Further comment. See premium email. Covid passport confusion. • There is no clarity as to which venues are to be covered and which are not. In addition, Labour has said that it will not vote with the government to force Covid passports onto younger consumers wishing to visit nightclubs. Government rebels may be sufficient in number to vote down the proposals. The Huffington Post reports that PM Boris Johnson has told the 1922 Committee that he was trying to persuade younger adults to getting jabbed and that the passports might not be necessary by the time that the end of September comes around. Such wooliness does not make planning for the venues in question very easy. Working from home: • Return to the office. City AM reports that ‘younger workers in London are more eager to get back to the office compared to their older counterparts.’ It quotes data from Land Securities, which ‘shows 70 per cent of London office workers are already coming into the office at least one day a week’ with a third of worker now back to their pre-Covid routines. Workspace says 77 per cent of workers aged between 18-34 in the capital are looking forward to coming back to the office, compared to half of staff aged 35 and over. • Separately, Sir Howard Davies of NatWest has said that his own company may never return to the routine work-weeks seen pre-Covid. Bloomberg quotes the NatWest chairman as saying ‘the days when 2,500 people walked in through our office door at Bishopsgate at 8.30am and then walked out again at 6pm, I think that is gone.’ He adds ‘we are looking at having a minimum expectation of a few days a month where people will definitely have to be in the office, and then it will vary by teams, but I suspect there won’t be many people doing five long days in the office.’ Inflation: • Bank of England deputy governor Ben Broadbent has said that the bank should continue to stimulate the UK economy and maintains that the uptick in the rate of inflation in the UK is temporary. • Further comment. See premium email. Company & other news: • Hotel Chocolat Group has reported that it has successfully placed 11.3m new shares in the company at 355p to raise around £40m gross. The new shares being issued represent approximately 9.0 per cent. of the existing issued ordinary share capital of the Company. CEO Angus Thirlwell says ‘the £40m growth capital raised today will be invested in our fast-growing business, furthering our aim of becoming a global digital-led chocolate brand. I’m delighted that our issue was oversubscribed, demonstrating the support Hotel Chocolat enjoys with its investors.’ • Premier Foods has reported that it has made a ‘very encouraging start to the year [it is a March year end] with Q1 trading and full year adjusted PBT at top end of expectations.’ As anticipated, sales in the quarter to June are down on the same period last year (by 13.2%) due to the stocking up by consumers at the beginning of the pandemic. Sales on the same quarter two years ago are up by 6.3%. International sales are up 17% on two years ago. • Further comment. See premium email. • UK Hospitality Scotland has called on the Scottish Government to permanently relax planning restrictions on outdoor seating, with the current ‘grace period’ due to expire in September. • BrewDog reported a £13.1m pre-tax loss in 2020 as sales of its craft beers online during Covid-19 pandemic lockdowns failed to offset the impact of bar closures. Co-founder James Watt said it was ‘without a doubt the toughest year in our 13-year history’ despite the company reporting revenue up 10% to £238m. • A plant-based food concept is opening in Buck Street Market, according to the owner of Camden Market. Clean Kitchen, founded as a dark kitchen during the first Covid lockdown, will span two floors and have up to 54 covers. • Domino’s Pizza Inc in the US has reported Q2 sales up 3.5% in its home market with international sales up by more than 10% despite a ‘very difficult staffing environment.’ The company added 238 net new units in quarter. • Moët Hennessy has launched its first ever Tequila, Volcan De Mi Tierra. It says this is one of only a small number of Tequilas to have its own distillery, which sits at the base of the Tequila volcano. • Hotel Chocolat has announced that it ‘notes recent press speculation and confirms that it continues to assess funding options, which may include a possible equity issue, to increase the Company’s long term sales capacity to capitalise on faster growth.’ Sky says that it believes the company will ‘announce a share sale to raise in the region of £30m in the coming days.’ It says ‘Hotel Chocolat’s leading institutional investors are understood to have been sounded out about the proposal in the last few days.’ HOTELS & LEISURE TRAVEL NEWS: • Analytics firm Cirium reports that Greece ‘most recovered’ European destination this summer. It says that, this coming weekend, some 95% of 2019 level flights will land in the country. Spain and Turkey come in at 66% of 2019. • The UNWTO says that international tourist arrivals to the end of May 2021 were 85% down on the same period in 2019, and 65% down on 2020. It says there is a slight upward trend evident. • Carnival’s German cruise business, AIDA Cruises, has added voyages to the end of its existing summer season. OTHER LEISURE: • Twitter yesterday evening reported higher than estimated revenue growth with advertising revenue up 87% on the same quarter a year ago. The group’s shares rose around 5% in after-hours trading. • Snap yesterday also beat Wall Street estimates for users and revenue in Q2. Shares rose by 10%. Revenue rose by 116% in the quarter to $982m (well ahead of expectations of $845.9 million.) FINANCE & MARKETS: • The Treasury is to sell up to 15% of NatWest over the next 12 months in order to part fund the government’s deficit. The Treasury says shares “will only be sold at a price that represents value for money for taxpayers”. • The ICAEW comments on the UK’s £2.2 trillion government deficit, pointing out that, due to higher inflation rates, the cost of debt service for the quarter to June was £18.1bnm up £6.0bn on Q1 this year. • The ICAEW says ‘public sector net debt has risen by £420bn since the first lockdown in March 2020, making the public finances more vulnerable to changes in interest rates and reducing the fiscal headroom available to the Chancellor as he seeks to navigate the economy out of the pandemic.’ There are rumours that this year’s Budget could be delayed. • Sterling higher at $1.3756 and €1.1688. Oil price higher at $73.52 and UK 10yr gilt yield down 3bps at 0.58%. World markets mixed yesterday with London set to open up by around 20pts as at 7am. RETAIL WITH NICK BUBB: TRADING STATEMENTS & EVENTS: Upcoming results are set out below: • 22 Jul 21 Britvic Q3 update • 23 Jul 21 Premier Foods AGM & Q1 update • 23 Jul 21 GfK UK Consumer Confidence numbers • 27 Jul 21 Campari H1 numbers • 27 Jul 21 Games Workshop FY numbers • 27 Jul 21 Starbucks Q3 numbers • 28 Jul 21 Marston’s Q3 trading update • 29 Jul 21 Molson Coors Q2 numbers • 29 Jul 21 YUM Q2 numbers • 29 Jul 21 Texas Roadhouse Q2 numbers • 30 Jul 21 DPP AGM • 3 Aug 21 Domino’s Pizza H1 numbers • 3 Aug 21 AG Barr H1 trading update • 5 Aug 21 Bank of England MPC meeting • 5 Aug 21 Shake Shack Q2 numbers • 10 Aug 21 Intercontinental Hotels H1 numbers • 11 Aug 21 Deliveroo H1 numbers • 11 Aug 21 Hostelworld H1 numbers • 12 Aug 21 TUI Q3 numbers • 18 Aug 21 Carlsberg H1 numbers • 19 Aug 21 Rank FY numbers • 2 Sept 21 Jet2 AGM • 22 Sept 21 Ten Entertainment H1 numbers • 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 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. |
|