Covid regs, trading, supply, Scotland, BOWL, 888, C&C, CINE etc.:

A DAY IN THE LIFE:

It occurred to me the other day that the shelf full of travel books behind my desk are not only currently useless, but they might be mocking me.

The constantly flash their covers, tempt with volcanos in Iceland, dramatic scenery in the US Rockies and intriguing castles and whatnot in Central Europe in the full knowledge that, if things carry on much like this, I’ll never get to see any of them.

However, it is what it is and, even against the background of further restrictions being voted through in the House of Commons yesterday evening, let’s hope we can have a decent Christmas. Still quite a few working days to go so let’s move on to the news:

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PUBS & RESTAURANTS:

Current trading.

How are sales this week? Let us know and we’ll feed-back.

The Guardian reports that ‘pubs and restaurants predict that Christmas cancellations made following the introduction of measures to limit the spread of the Omicron variant of Covid-19 in England will cut their festive takings by 40%.’ UKH mentions the 40% number. We have heard higher numbers suggested for Central London, particularly The City. This week should, arguably, have been the busiest of the year. Chief medical officer Chris Whitty has warned that the UK should expect to see a “significant increase” in hospitalisations from the omicron variant of Covid-19 in the UK.

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Chef Tom Kerridge has warned that restaurants will ‘crumble without help’ if customers stay away as a result of Covid concerns. He said on Instagram that some 654 guests at his restaurants had cancelled bookings in the last six days. He says ‘public health is THE most important thing. The problem is what will the government do to support the hospitality industry? Many places are going to crumble without help….’

Labour supply:

Whilst the Omicron variant, Plan B and the threat of further restrictive measures may lead to job losses going forward, the ONS yesterday reported that the number of people in work rose by 149,000, to 32.5 million in November. It reported that job vacancies hit a new record high of 1.219m in the September to November quarter, up some 434,500 on pre-pandemic numbers.

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A study by the Centre for Economic Performance has suggested that a half of businesses are struggling to recruit new staff. It says that the government must do more to encourage firms to invest in training.

Food supply:

The National Farmers’ Union (NFU) has called for the government to commit to keeping the country’s self-sufficiency in food production at 60%, warning that the UK is facing a ‘worsening food supply chain crisis’.

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Other supply issues.

The Institute of Directors has polled members and says that nearly a third of respondents are “not at all prepared” for full post-Brexit customs checks that will come in on 1 Jan. The grace period has been extended previously but, from the start of next year, checks on goods will need to be in place.

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Covid restrictions to trade:

Legislation to compel adults to show a COVID pass to enter nightclubs and other large events in England passed in the House of Commons yesterday despite a sizeable Tory rebellion. The rules apply to nightclubs, to indoor unseated venues with a capacity of more than 500 people, to unseated outdoor venues that hold more than 4,000 people, and any venue with more than 10,000 people.

Scotland introduces further restrictions:

Shops and businesses in Scotland will have to reintroduce social distancing rules and reduce capacity says First Minister Nicola Sturgeon. The details will be released later this week. Ms Sturgeon says measures will be introduced in the hospitality industry to avoid crowding at bars and between tables. That could involve a major reduction in capacity over the normally-busy Christmas period.

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Lost bookings:

Whilst still anecdotal at this stage, evidence that the pace of cancellations and a lack of walk-in trade have hit revenues is becoming hard to miss. The BBC reports that hospitality businesses are facing a wave of Christmas cancellations. The Bar 44 chain, which has four outlets, said 3,200 people had scrapped bookings for December. The Confederation of British Industry (CBI) has called for the government to provide financial support for businesses affected.  

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The International Monetary Fund (IMF) has said the UK should be prepared to roll out a limited version of the furlough pay scheme. It forecasted GDP growth of 6.8% for this year as Britain recovers from last year’s slump, dropping to 5% in 2022. 

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Costs:

See data on inflation in Finance & Markets below.

COMPANY & OTHER NEWS:

C&C has updated on the capital markets day that it is to host later today saying that David Forde, CEO and Patrick McMahon, CFO, together with senior leaders from across the Group, the team will present the key strategic, financial and ESG ambitions driving C&C’s pursuit to be the preeminent brand-led drinks distribution platform serving the UK and Irish drinks market. This event will be streamed via live webcast.

Tesco has agreed a new pay deal with trade union Usdaw for workers at nine distribution centres, a week after separately reaching an agreement with Unite.  

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Big Hospitality reports that ‘competitive socialising operator Boom: Battle Bar is planning for major expansion around the UK that will see it triple the size of its estate.’ It says ‘the group, which currently operates nine locations across England and Wales, has a pipeline of 19 new openings planned, primarily focused in England but with some sites also set to launch in Scotland.’ Its website ‘listed as ‘coming soon’ include Aldgate East in London; Bath; Ealing; Edinburgh; Glasgow; Hull; Leeds; Manchester; Oxford Street, London; Reading; Sheffield; and Watford. ‘

Fuller’s has announced that it is to host ‘a Dickensian spectacular throughout December as the Open Bar Theatre Company takes over 16 Fuller’s pubs and gardens with a four-person adaptation of A Christmas Carol, the much-loved festive classic by Charles Dickens.’ It says it is on a mission to bring together the performing arts and the general public ‘in one of the nation’s most treasured environments – the great British Pub.’

LEISURE TRAVEL & HOTELS:

The government will remove all 11 countries from the red list from 4am on Wednesday, with Health Secretary Sajid Javid saying Omicron had spread so widely the rules no longer had much purpose. 

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The Home Secretary has said that people currently quarantining may be allowed to leave early.

The Times has reported that new state funding could include a potential return to furlough as the government looks at options to support businesses financially. A treasury source said ‘If we do get to a position where we are telling businesses that they have to shut their doors then it is not unreasonable for them to expect additional government support.’

Six travel and agency associations from around the world have united to lobby governments around the world to lift travel bans as quickly as possible and provide financial support to the sector.

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The Times claims that airlines are ‘flooding’ the market with cheap seats and that late departures for some Christmas holidays are being discounted by up to 50%. EasyJet is selling flights from Gatwick to Faro in Portugal for less than £50 return this month, and Tui is offering a two-week self-catering holiday to Spain, departing from Cardiff on December 18, which costs £350 per person.   

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Hard Rock International, which is owned by the Seminole Tribe of Florida, has acquired the operations of Las Vegas’ 3,044-room Mirage Hotel & Casino from MGM Resorts International for $1.075 billion.

OTHER LEISURE:

Hollywood Bowl Group has reported full year numbers to 30 September 2021 saying that it has turned in an ‘impressive performance since reopening’ and that it is ‘well-positioned to capitalise on opportunities ahead.’ The company reports revenues of £71.9m (2020: £79.5m) with PBT of £1.7m against £1.4m last year. Basic EPS is 1.05p against 0.90p last year.

BOWL says its trading ‘reflects the robust customer demand upon the reopening of all centres in England and Wales from 17 May 2021 and the subsequent lifting of Covid restrictions from 19 July 2021. The Group operated without restrictions for 10 weeks in the financial year to 30 September 2021.’ It says there was ‘strong, pent-up summer demand for fun, safe and family-friendly activities.’

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Cineworld loses this round of legal action. Cineworld Group has updated on its Cineplex litigation saying that Cineplex’s litigation against it is being defended and has led to counter-claims. It says ‘the Ontario Superior Court of Justice has now handed down its judgment. It granted Cineplex’s claim, dismissed Cineworld’s counter-claim and awarded Cineplex damages of C$1.23 billion for lost synergies to Cineplex and C$5.5 million for lost transaction costs. Cineworld disagrees with this judgment and will appeal the decision. Cineworld does not expect damages to be payable whilst any appeal is ongoing.’

888 has announced that it has reached an agreement to sell its entire B2C and B2B bingo businesses to Saphalata Holdings Ltd., a member of the Broadway Gaming group. The consideration is $50m on a cash-free debt-free basis, including a potential earnout of up to $4m, based on achievement over six months of revenue-based performance criteria.

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Private equity company KKR has acquired a £300m holding in the UK’s largest gym operator PureGym. The deal values the company in excess of £1.5bn per the FT. PureGym said it “believes the conditions are now right for significant further development of the business”. The operator has 511 gyms ‘and now has access to £500m of capital to continue its growth in the UK, Switzerland and Denmark’ says the paper. CEO Humphrey Cobbold says ‘with health and wellbeing rising to the top of the global agenda, we now have the capital, the capabilities, the technology and the management team to become a global fitness and activity operator.’

Audoo has completed a £7.2m investment round led by existing investor Edinv, with significant follow-on from Tileyard London and a new notable investor in MPL Ventures. The funding will be used to drive the London-based music technology firm’s growth into new markets as it expands across Europe, North America and the APAC regions. 

FINANCE & MARKETS:

The ONS reports that the November CPI in the UK rose by 5.1% in the 12 months to November 2021, up from 4.2% in October. It says ‘on a monthly basis, CPI increased by 0.7% in November 2021, compared with a fall of 0.1% in November 2020.’ This is markedly ahead of estimates of around 4.7% and could increase pressure on the Bank of England’s MPC to put up interest rates tomorrow.

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The IMF has told the Bank of England that it would be unwise to delay too long in moving to raise interest rates. It says that demand was too strong in the economy and UK inflation would rise to about 5.5 per cent early next year.

The ONS announced yesterday that unemployment across the UK dropped again in the three months to October. The rate was 4.2% against 4.3% a month ago. The ONS reported that an additional 257,000 people, many of them part-time, were in jobs in November when compared with the previous month.

The BCC has said that the rise in payroll employment and falling unemployment shows the UK jobs market has continued to rebound strongly. It will be interesting to see what the Bank of England chooses to do with interest rates tomorrow lunchtime.

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Sterling stronger at $1.3241 and €1.1746. Oil price lower at $72.86. UK 10yr gilt yield down 2bps at 0.72%. World markets mixed to lower yesterday and London set to open around 14pts down as at 7am.

RETAIL WITH NICK BUBB:

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