Ten Entertainment, AG Barr, 888 Holdings, WFH, inflation, footfall & other:

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PUBS & RESTAURANTS:

WFH:

Pragma Consulting reports that ‘take-up of office space in London in January 2022 was 304% up on the year before, significantly exceeding all expectations.’ A rise was only to be expected but Pragma says ‘we believe office vacancy rates will slow again as businesses start rethinking the way they structure their real estate. Landlords therefore need to think hard about how they can attract tenants back into the office.’

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Discounting:

It’s early days. The energy price cap and VAT don’t go up until later in the week but we remain on the look-out for discounts – or, indeed, any other signs that the battle for the consumer’s money has heated up. Not that much evidence at the moment but we note that some of M&B’s Sizzling Pubs are offering 20% off mains all week to Thursday.

Footfall:

Springboard comments that ‘the second anniversary of the start of the first lockdown in 2020 delivered positive news for UK retail destinations last week, helped by warm and sunny weather across the UK which lasted the entire week.’ It says that footfall was up 116.4% against 2021 (which was still in lockdown) but was down 15.7% against the same week in 2019. Week on week, footfall was up by 7.8%.

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Inflation, shrinkflation, stagflation etc.

A survey undertaken for the Bank of England has found that the British public’s expectations for inflation over the next five to 10 years has hit a new record high this month.

Mondelez is reported to have reduced the size of its Cadbury Dairy Milk bar by 10% whilst keeping the price the same.

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The consumer:

Chancellor Rishi Sunak has defended his decision not to raise benefit payments saying that he has introduced a range of ‘progressive’ measures. Economists believe that the least well off will see their real incomes decline more that better off consumers in the coming months. Mr Sunak says ‘my job is to make the right long-term decisions. My view is an excessive amount of borrowing now is not the responsible thing to do.’

The Bank of England has said that the UK economy will suffer a growth slowdown on a par with those that followed the oil shock in the early 1970s. Governor Andrew Bailey says there are signs of slowing demand.

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Sports offers:

KAM Media has commented on the opportunity to boost sales via sports offers saying that ‘new research suggests that 16.1 million UK adults intend to watch at least some of this year’s Men’s FIFA World Cup in a pub or bar and an impressive 8.8 million want to watch a 2022 Women’s Football European Championship game.’

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Other news:

A strike by Spanish hauliers is reported to be threatening beer supplies across a number of resorts in the country.

SIBA CEO, James Calder, has welcomed the news that glass will be excluded from England and Northern Ireland’s deposit return scheme.

Figures from the Wine and Spirit Trade Association (WSTA) show that gin sales in the UK dropped by almost £1bn in value, decreasing from £2.7bn in 2019 to £1.9bn in 2020 following various lockdowns and pub closures.

The Westons Cider Report 2022 has found that the average cost of a pint of cider has risen by 12p to £4.03 against the previous year. Total volume sales had risen by almost half (46.1%) to 162m litres and value sales increased by a similar percentage (50.4%) to £1,153m, but Westons Cider head of business development Darryl Hinksman said ‘we’ve still got some way to go before on-trade sales are back to 2019 levels.’

COMPANY NEWS:

AG Barr has reported full year numbers for the year ended 30 January 2022 saying that the group has turned in an ‘excellent financial performance generated by strong sales growth.’ The company reports that revenues were up by 18.3% at £268.6m with PBT up 26.5% at £41.5m. Basic EPS is up 46.1% at 25.09p. The company is to pay a total dividend for the year of 12p, up from 4p in the year to Jan 2021.

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Drake & Morgan reports  turnover decline by 90% to £5.2m, for the 52 weeks to 28 March 2021, compared to £50.2m the previous year. Loss after tax amounted to £12.1m, compared to a loss of £1.5m in 2020. However, the bar and restaurant group said it has seen a strong return to trading levels since the removal of Plan B restrictions at the end of January. 

Carlsberg has announced that, following the review of its operations in Russia announced on 9 March, the company has ‘taken the difficult and immediate decision to seek a full disposal of our business in Russia, which we believe is the right thing to do in the current environment. Upon completion we will have no presence in Russia.’

Heineken has also announced that it is to pull out of Russia. It says ‘we earlier announced that Heineken stopped new investments and exports to Russia, ended the production, sale and advertising of the Heineken brand, and announced that we will not accept any net financial benefits or profit from our business in Russia.’ It has now ‘concluded that Heineken’s ownership of the business in Russia is no longer sustainable nor viable in the current environment. As a result, we have decided to leave Russia.’

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Russia is reportedly the world’s fifth largest country in terms of overall beer consumption. Sales grew during Covid.

The MA reports that The Breakfast Club is entering a phase of ‘accelerated growth’ after appointing Be At One founder Steve Locke as managing director.

Brasserie Bar Co chairman, Mark Derry, has said he’s never known a more difficult time to be an employer and restaurant operator. Derry said ‘[Rishi Sunak] says the economy is growing and bringing in money thanks to his Covid tax cuts, yet he announces in the same breath that he’s putting VAT back up again, which is simply going to risk choking off the growth.’

Benugo has announced that it will open three locations at The Burrell Collection in Glasgow which is due to open on 29 March.

The CMA has given Ranjit Boparan the go ahead to expand his chicken operation by clearing the acquisition of Banham Poultry. It decided the takeover would not substantially weaken competition in the poultry market despite Boparan owning the UK’s biggest poultry supplier in 2 Sisters and turkey giant Bernard Matthews.

HOLIDAYS & LEISURE TRAVEL:

Virgin Atlantic vice-president of global sales, Lee Haslett, says the carrier is targeting ‘the best summer ever’ after seeing a quicker rebound than predicted on transatlantic routes. Haslett said ‘January was a little on the slower side but the end of February saw a very good performance from our perspective.’ 

Vail Resorts, the US ski giant, is taking a £121.5m (55%) stake in Andermatt-Sedrun Sport AG, a Swiss counterpart. Vail Resorts owns and operates 40 ski resorts in the US, Canada and Australia. The deal is expected to be completed prior to the 2022-23 ski season.

Leisure Time (Wales) Ltd has ceased trading after 27 years in business. The Cardiff-based business said ‘The impact of the pandemic restrictions was too much for the company to bear in the end as we have not been able to recover from all that has happened over the past two years.’

Grant Shapps has said that P&O Ferries will have ‘little choice’ but to reverse its decision to sack 800 staff. A second P&O ferry is reported to have failed a safety inspection and is to be detained.

A report into state aid by the Airport Operators Association found that UK airports handled fewer passengers in 2021 compared with the previous year, but this trend was reversed on the Continent. The report found that UK airports are at risk of being overshadowed by EU rivals due to low levels of state aid offered during the pandemic.

HVS reports that European hotel capital values have firmed up. it says ‘Europe’s hotels saw a recovery in values in 2021 buoyed by cost efficiencies, strong demand in the second half of the year and continued investment interest.’

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OTHER LEISURE:

Ten Entertainment Group has reported full year results to end-December and says full year 2022 will be above market expectations. The co says that it has generated ‘record breaking sales growth’ and has seen ‘a return to profit’ with ‘strong momentum into 2022.’ The company reports that revenues rose year on year from £36.3m to £67.5m. The year under review includes lockdowns and revenues are still down 19.7% on 2019. The company says it had an ‘extremely successful second half and [a] return to profitability for the full year.’

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888 is to launch in Africa. It says it ‘has invested in a minority stake in 888AFRICA, with the option to increase this to take control, and ultimately own up to 100% of the venture in the future.’ CEO Itai Pazner says ‘the new JV will launch 888’s world-class online betting and gaming brands to millions of new customers in the exciting and fast-growing African online market. The structure of this deal enables the Group to invest in a strong business with high growth ambitions, without distracting focus from our core business and key strategic markets.’

Netflix has acquired Boss Fight Entertainment – a Texas-based game developer – for an undisclosed sum. The deal marks Netflix’s third acquisition of a gaming company.

FINANCE & MARKETS:

Sterling weaker at $1.3091 and €1.1916. Oil lower at $111.09. UK 10yr gilt yield down 7bps at 1.62%. World markets heading better yesterday and London set to open up around 42pts as at 7am.

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