Langton Capital – 2021-05-14 – Inflation, Tracker, Visa, R-Rate, jobs, D&M CVA, Variouos Eateries etc.
Inflation, Tracker, Visa, R-Rate, jobs, D&M CVA, Variouos Eateries etc.A DAY IN THE LIFE: Do you ever get a guilty sense of relief when something you don’t want to do, like visit the dentist, cut the grass or take an exam, gets postponed? The fact that it isn’t your fault gives you a frisson of satisfaction before the feeling that you’ve done something you shouldn’t, or in this case not done something that you should, creeps in to spoil the party. Well, that was Langton and its grass cutting until yesterday when, at 1pm and with the sun shining, we ran out of excuses. There then followed several hours of cursing, anger, pain and tears – very similar to a visit to the dentist – after which the job was behind us and, again like a visit to the dentist, can be forgotten about for some time. Sadly not six months, though. Anyway, the weather over the weekend is mixed and we might see the sun. But what we will see, for sure, is the inside of a pub from Monday. Have a good weekend and 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: THE ELEPHANTS IN THE ROOM: Introduction: • In the UK, if not in large parts of the wider world, Covid may be past its worst (in the absence of malign variants, that is). • There are justifiable caveats, but it makes sense to look to the future, ask what the new normal will look like, etc. • On the balance of probabilities: o There is some pent up demand. o Supply (the number of outlets) will be reduced and, o There will be limited overseas travel this year meaning that it should be a good year for staycations. • Which is great. But there are some elephants in the room. We’ll consider over the next few days (and not in any particular order of importance): a) Labour shortages, b) Cost and price inflation c) Accrued debt (banks, bonds, landlord, VAT, supplier etc) and, d) Other issues (supply chain problems etc) – See premium email. PUBS & RESTAURANTS: Coffer Peach Tracker: • The Coffer Peach Tracker for April reports a 26% drop in like-for-like sales in April compared to the same month in 2019. This covers three full weeks of outside-only service in England as well as briefer trading in Scotland and Wales, and represents a ‘solid return to trading for the sector.’ The Tracker says ‘operators enjoyed the benefit of generally good weather and strong consumer confidence in the first fortnight of trading, though low temperatures and rain dampened sales towards the end of the month.’ The numbers are only for open units. Closed units would have been down 100% (if they didn’t have delivery). Pubs outperformed restaurants and wet sales outperformed food. Due to the number of closed units, total sales were down 60% in April 2021 vs April 2019. • Langton comment: See premium email. Trading: • Commenting on general consumer spending, Barclaycard reports ‘consumer spending grew 0.4 per cent in April as high streets and hospitality venues re-opened.’ It says ‘spending on essential items rose 10.1 per cent compared to 2019, with fuel spend seeing less of a decline as more Brits travelled.’ It says non-essential spending was down by 4.4% on 2019. Barclaycard says spending on accommodation and staycations rose, particularly across the over-50s age group. Spending in bars and pubs was still down 67.2%. This is a blended mix of reduced spending in open pubs (see the Tracker above) and less than half units being open. • Langton comment: See premium email. Other covid news: • R Rate. The NIESR says that the R rat in England is between 0.95 and 1.1. Wales is the same, Northern Ireland is slightly lower and Scotland slightly higher. Injecting a note of caution, the NIESR says ‘this is the first time since early January when we forecast daily reported cases to rise, albeit mildly. Hospital admissions and deaths due to Covid-19 continue their steady decline.’ • Vouchercodes.co.uk has commissioned research suggesting that pubs, restaurants and other hospitality venues in the UK could rake in £2.5bn next week. We’re not statisticians but that seems like rather a large amount at pretty much fifty quid for every adult in the country. The Centre for Retail Research, which conducted the poll, says that 104m visits will be made to hospitality venues. Again, this seems high. Vouchercodes.co.uk says ‘if people in the UK are known for anything it’s our love for pubs and restaurants, so it’s no surprise to see that so many people are planning to make the most of being able to sit inside and enjoy drinks and meals out next week.’ • Langton comment: See premium email. • Jobs market. The hospitality may only find out for sure which furloughed staff are coming back next week. Recruiting and retraining replacements could be expensive and time-consuming. There may be a short and medium term need for locums or freelancers and companies such as Luminary Talent may be helpful in sourcing talent. Company & other news:
• Drake & Morgan plans CVA. Bar restaurant company Drake & Morgan is planning to enter a CVA. It could exit three sites and move to a predominantly turnover-based rent model. This follows on from New Look’s High Court victory over landlords who had sought to prevent a similar move by the High Street retailer. The Caterer reports ‘under the proposals the Allegory and the Listing bars in London and the Refinery Spinningfields in Manchester will close. The bar group said affected staff will be offered alternate roles in the company.’ CEO Jillian Maclean says ‘we started last year as a profitable and growing business and, in common with the rest of the hospitality industry, have been significantly affected by repeated lockdowns and tier restrictions.’ She continues ‘this course of action, if approved, will safeguard the future of the group and give it the breathing space it needs to • Various Eateries has announced that a company controlled by Hugh Osmond has transferred a million shares at 105p to another connected person, Lucy Potter. The company says ‘following these transfers, Hugh Osmond’s holding is deemed to be unchanged. He remains interested in 41,616,859 Ordinary Shares representing 46.75% of the total issued share capital of the Company. • Pizza Express has said it will reopen all of its sites in the UK on Monday. This will be the first time that all of the sites have been open at the same time since March 2020. The company says it is looking to hire 1,000 new staff members. CEO Zoe Bowley, says ‘we’re overjoyed that after more than a year since the first lockdown, we will finally be able to have all of our pizzerias in England, Wales and Scotland open to serve customers.’ Shepherd Neame and a number of other operators have also said that they are looking for more staff. • McDonald’s is to put up hourly wages by an average of 10% at its U.S. company-owned restaurants. This ahead of a threatened strike. The chain is reported to be looking for up to 10,000 additional staff. • The On-Trade Consultancy has issued a white paper in a new series, titled ‘Simple but savvy steps to navigate complex categories and reach the right range.’ The whitepaper contains three chapters of principles, brought to life with relatable examples of drink types and brands that play the range roles to help businesses prosper. • Zucchini is to open a site in the Metrocentre in Gateshead. • Japan Centre is to open what may be the UK’s first mochi bar in Leicester Square. • Carluccio’s will trial coffee shops in three Sainsbury’s stores HOTELS & LEISURE TRAVEL: Lest we get too carried away: • The CMA has warned package holiday companies that they will have to give refunds to customers booking holidays if these are subsequently cancelled due to the Covid-19 pandemic. TUI, for one, has said it will provide clearer information on refunds upfront. On the Beach earlier this week criticised some of its competitors who, it said, were selling holidays that were likely to be cancelled. • It takes two to tango. TUI has told Sky News that holidays being sold to Portugal may have to be cancelled if rules remain in place banning non-essential travel from countries outside the EU. Portugal itself has extended its “state of calamity” to 30 May. The restrictions cast some doubt over both holidays to the country and the Champions’ League final between Manchester City and Chelsea that is due to take place in Porto on 29 May. • The WTTC has said that the travel and tourism industry in the UK has been harder hit during the Covid-19 crisis than many other major markets. It says tourism in the UK fell by 62.5% in 2020, above the global average of 49.1%. Other news: • Bookings with Airbnb have risen sharply over recent weeks. The company has said there is now a “steady improvement” in business in the UK and France adding that the overall value of bookings rose by 52% to $10.3bn (£7.3bn) in the quarter. Airbnb reports that revenue rose to $886.9m in the quarter with a loss before tax of $59m. The company says ‘while conditions aren’t yet normal, they are improving, and we expect a travel rebound unlike anything we have seen before.’ • British Airways is road testing a new ultra-rapid Covid test that produces results within 25 seconds. • Booking.com CEO Glenn Fogel has said that the business travel market may never fully recover from Covid. He says ‘I’m not sure business travel will ever get back to what it was pre-pandemic.. it may forever be a smaller share of the total travel pie… in terms of bookings and value.’ He adds ‘every CFO in the world is looking at this costs line, thinking ‘hmmm do you really need to do that trip, you could still just keep using Zoom and it’s just as good?’ • Switzerland has moved to allow vaccinated people and those who have recovered from Covid to enter the country without quarantine. • Expedia says half of UK travellers will book holidays via an online travel agency after Covid-19, new data released by Expedia reveals. It says 52% of people surveyed would take a leisure trip by June and are most likely to travel between July and September 2021. • STR reports that hotel supply has been coming back onto the US market. It says hotel occupancy fell slightly as a result to 56.7%. It says ‘demand was up week over week, but an increase in supply from both re-openings and new properties pulled national occupancy down.’ • Amadeus reports a third of global hoteliers as believing that social distancing and enhanced hygiene measures are here to stay. OTHER LEISURE: • The English Premier League has renewed a £4.8bn TV rights deal with its existing partners Sky, BT and Amazon. • Electric scooter start-up Bird has announced it will IPO at an implied valuation of around $2.3bn. FINANCE & MARKETS: • Bank of England economist Andy Haldane has said that the UK economy is set to grow at its fastest pace since the Second World War. This is in line with the Bank’s earlier comments. Haldane, writing in the Daily Mail, says ‘spring has sprung for the UK economy. This year it is set to grow at its fastest pace since the Second World War. It is easy to see why. As Covid infection rates have fallen sharply and the vaccination programme has been rolled out, the health risks facing us have plummeted.’ Mr Haldane predicted a sharp V-shaped recovery last year which did not materialise. This time he may be right. • The European Commission reports that the economy of the EU will bounce back more quickly than previously expected. • Bloomberg reports that Wall Street has thus far been the biggest winner from the City of London’s £2.3 trillion ($3.3 trillion) loss of derivative trades in March. • UK shares were down yesterday – though well off their lows – on the back of renewed inflation concerns. • The RICS says UK house price affordability will continue to diminish due to a shortage of properties on the market. • Sterling lower at $1.4042 and €1.1617. Oil down at $66.82. UK 10yr gilt yield up 2bps at 0,91%. World markets down but then recovering yesterday. London set to open up around 40pts. RETAIL WITH NICK BUBB: See premium email TRADING STATEMENTS & EVENTS: Upcoming results are set out below: • 11 May 21 City Pub Group FY numbers • 11 May 21 Morrison’s Q1 • 12 May 21 Compass Group H1 numbers • 12 May 21 Stock Spirits H1 numbers • 12 May 21 TUI H1 numbers • 12 May 21 Coca Cola HBC Q1 update • 12 May 21 Just Eat AGM • 14 May 21 Tasty AGM • 14 May 21 Gregg’s AGM (no update expected) • 17 May 21 Hollywood Bowl H1 numbers • 18 May 21 Britvic H1 numbers • 18 May 21 Escape Hunt FY numbers • 18 May 21 DP Eurasia trading update • 19 May 21 Marston’s H1 numbers • 19 May 21 Premier Foods FY numbers • Est 19 May 21 M&B H1 numbers • 20 May 21 Young & Co FY numbers • 20 May 21 Fevertree AGM • 20 May 21 888 AGM • 25 May 21 Restaurant Group AGM • 25 May 21 Shaftesbury H1 numbers • 26 May 21 C&C FY numbers • 26 May 21 Playtech AGM • 3 Jun 21 New River full year numbers • 8 Jun 21 DP Eurasia AGM • Est 13 Jun 21 Barclaycard Consumer Spending report • 15 Jun 21 Vianet full year numbers • 24 Jun 21 Bank of England MPC meeting • 13 Jul 21 Pepsi Q2 numbers • 23 Jul 21 Premier Foods Q1 update • 27 Jul 21 Campari H1 numbers • 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 • 22 Oct 21 Intercontinental Hotels Q3 numbers • 26 Oct 21 Campari Q3 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. |
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