Brighton Pier, trading, the consumer, Budget, company catchup & other:

A DAY IN THE LIFE:

So, the lighter mornings yesterday got off to a bad start as it was tipping it down up north such that it stayed gloomy until noon and then started to get dark again three or four hours later.

Welcome to winter, I suppose and, with the garden (grass not cut, didn’t have the brass neck to queue up for petrol for the mower with a jerry can during the fuel crisis) looking straggly and forlorn, we, along with pretty much everyone else, might be spending a bit more time indoors for a while. 

It is what it is, I suppose but, elsewhere, a) the less said about Hull City the better, b) it’s good to be back from hols and c) you know you have a teenage daughter when you find your phone, battery 18%, unplugged in order for another one, battery 36%, to be plugged in because ‘it’s an emergency’.

Anyway, enough of that for the moment. On to the news:

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PUBS & RESTAURANTS:

Trading:

PM Boris Johnson has said ‘I see no evidence whatever to think that any kind of lockdown is on the cards.’ He is suggesting that Christmas will be ‘normal’ this year but, as some unsympathetic papers have pointed out, this is exactly what said last year before lockdowns two and three. The vaccine rollout has markedly changed the situation for the better but a number of trade bodies are cautioning that many operators would not survive a ‘second lost Christmas’.

The consumer

Accountant Deloitte has released its Consumer Tracker Q3 saying that ‘following a strong rebound in the first half of the year, which resulted in confidence returning to its pre-COVID-19 level in Q2 2021, consumer confidence fell in Q3 2021 for the first time since Q4 2020. The Deloitte Consumer Confidence Index lost one percentage point quarter on quarter to -10% as concerns about personal finances grew.’

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The IFS has said that millions of low income households will feel ‘real pain’ in the coming months and years as a result of tax hikes and rising prices.

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OFGEM has said that it will review the price cap on gas & electricity bills in the wake of a number of supplier failures. This could lead to higher prices feeding through to consumers more rapidly.

The Telegraph adds to the gloom somewhat by headlining that ‘households face squeeze from inflation and flat wages.’ It says ‘forecasts from Budget watchdog show that average real wages will be lower by 2026 than in 2008, says Institute for Fiscal Studies.’

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The latest Lloyds Bank Business Barometer shows that business confidence slipped in October, but it is still at its second highest level since the start of the pandemic.

Working from home:

The Rail Delivery Group has reported that commuter journeys across Britain’s railways are still at only 45% of pre-pandemic levels. This is up from 33% in late August. Leisure trips are back to around 90% of pre-pandemic levels. London is lower than the national average at 41% of pre-pandemic levels.

Inflation:

See also The Consumer above. SIBA says there could be a ‘business closures time-bomb’ in place for New Year detonation as a result of rising costs. it says ‘rising costs in essential materials such as fuel, CO2, energy, bottles, cans and packaging are making it impossible for many small independent breweries to bounce back from Covid lockdown and social distancing measures which hit the pub and brewing industry harder than most.’

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The BBPA is to host the inaugural Leased and Tenanted (L&T) Pub Showcase at the Houses of Commons on Wednesday 3 November. It says ‘the showcase gives MPs from across the UK the opportunity to meet publicans from their constituencies, learn more about the L&T model and discover how it places pubs at the heart of their local community.’

THE BUDGET:

Chancellor Rishi Sunak declined to delay his heavily-leaked Budget until our return from holiday so, as a result, this is both historic and short.

Planned duty increases were scrapped and a new Draught Relief of lower duty will apply where draught beer and cider is dispensed from containers over 40 litres. Our opinion is that this size limit may be cut. The number of different types of duty systems will be reduced from 16 to five with stronger drinks attracting higher rates of duty.

There was no hint that the current 12.5% rate of VAT on food and non-alcoholic drinks in pubs & restaurants will be extended or made permanent.

The halving of business rates appeared to be more generous than, in fact, it is as it is capped at £110,000 per business. This means that, whilst it may benefit 90% of pub businesses, it will not cover 90% of pubs.

Reaction: The measures were generally welcomed.

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Economics. Treasury secretary Simon Clarke has said that the high tax, high spending nature of the Budget was ‘a major shift in Tory philosophy’ per the BBC. The Times points out that government spending is at its highest levels since the early 1950s.

COMPANY & OTHER NEWS:

The Brighton Pier Group has reported full year numbers for the 52wks to 27 June saying that revenue was £13.5m (against £22.6m in the prior year) with PBT of £4.2m against losses in FY20 of £10.2m. Excluding highlighted items, EBITDA this year was £5.1m against £2.5m last year. Adjusted earnings per share are 5.7p against a loss of 5.3p. The company benefited from certain insurance receipts during the year:

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The Mail on Sunday reports that ‘motorway services giant Roadchef could be about to change hands for up to £1billion.’ It says ‘City sources said its owner – a French infrastructure and private equity firm called Antin – has appointed advisers from Australian investment bank Macquarie to find a buyer for the business.’ Roadchef is the third largest motorway service area operator in the UK after Welcome Break and Moto. It runs around 30 service stations across Britain.

McDonald’s has removed its Chicken Legend from some menus due to supply issues. The company says ‘supply chain issues were impacting availability’.

JD Wetherspoon is to cut the price of a pint of Ruddles Best, a bottle of Beck’s and a single measure of Bell’s whisky to 99p in its English pubs this week. Coffee, tea and hot chocolate will also retail for 99p, including refils.

The Sunday Times reports that activists have been pressing Just Eat Takeaway to slim down after its recent acquisition spree.

Greggs Plc has filed a £100m legal claim against its insurer, Switzerland’s Zurich Insurance Group, in a disagreement over whether the insurer should compensate the group for its losses during Covid closure periods reports the Sunday Times.

COMPANY & OTHER NEWS – CATCHUP:

Whitbread last Tuesday reported H1 results showing that its recovery was ‘ahead of expectations’ and demonstrating that the company was ‘outperforming the market’. It said that the ‘sales recovery is ahead of expectations, and while a number of uncertainties remain, UK like-for-like RevPAR run rate has the potential to reach full recovery at some point in 2022.’

Restaurant Group has announced that Ken Hanna is to be appointed its new chairman.

C&C Thursday reported H1 numbers saying ‘we are encouraged by how quickly the on-trade recovered and we are pleased to report that trading in the first half has been ahead of plan.’

Various Eateries updated on trading for its full year to 3 Oct saying that ‘the Group’s trading performance since the recommencement of trading on 12 April 2021 has been very encouraging.’ It says ‘the Group’s balance sheet is solid with cash at bank of £19.7m.’

BrewDog is to open its largest bar ever at Waterloo Station, London, in summer next year.

DP Eurasia has updated on the reverse book build whereby Jubilant Foodworks proposes to take a 49.99% stake, saying that ‘the Independent Committee maintains its recommendation that shareholders do not tender their shares under the RBB.’

This morning, Jubilant Foodworks Netherlands has announced the result of its Reverse Bookbuild to acquire shares in DP Eurasia N.V. at 95 pence per share saying that it ‘confirms that, further to the announcement on 30 September 2021, it will purchase 10,146,964 ordinary shares of DP Eurasia N.V. at a price of 95 pence per share via a reverse bookbuild.’ It says that ‘on completion of the RBB, Jubilant Foodworks and its subsidiaries will own a total of 57,844,846 ordinary shares in DP Eurasia, which represents 39.79 per cent. of the issued share capital.’

Carlsberg has updated on Q3 trading. CEO Cees ’t Hart says ‘we’re satisfied with the value and volume growth in Q3, resulting in a solid 7% organic revenue growth. Unfortunately, our people, customers and businesses in many markets remain heavily impacted by COVID-19. It is encouraging that many beer markets in Europe are recovering from the pandemic, giving people the opportunity to socialise and return to the on-trade.’

AB InBev has reported Q3 numbers saying the group performed well and ‘as a result of our performance and our continued momentum we are raising the bottom-end of our EBITDA guidance.’

Molson Coors Beverage Company has reported Q3 numbers showing a +1.0% net sales revenue against a decrease of 3.6% in volume.

McDonald’s has reported Q3 numbers saying ‘global comparable sales were up 12.7% in the third quarter and increased 10.2% on a 2-year basis.’

Starbucks reported Q4 numbers saying that U.S. same-store sales rose 22% year-over-year. They were up 11% from pre-COVID levels in the group’s Q4.

YUM Brands reported Q3 numbers ahead of estimates with KFC same-store sales up 6% in the quarter. Pizza Hut LfLs were +4% whilst Taco Bell was up 5% in the quarter and up 8% on a two-year basis. Yum added 760 net new locations in the quarter, a record for the company.

Cracker Barrel has launched a ghost kitchen in LA.

Texas Roadhouse has reported Q3 numbers saying demand has been strong but that the labour market is tight. It says ‘comparable restaurant sales at company restaurants for the first four weeks of our fourth quarter of fiscal 2021 increased 22.6% and 23.6% compared to our 2020 and 2019 periods, respectively.

DPP reported H1 numbers on Monday last week saying ‘the Group has started to see a positive trend in EBITDA performance as the Group adjusts following completion of the integration and a period of substantial one-off integration costs and operating efficiencies incurred over January to August 2021.’

Nightcap plc last week said it was ‘pleased to confirm the openings for its three newest London Cocktail Club sites in Bristol, Reading and Central London throughout the month of November 2021.’

LEISURE TRAVEL & HOTELS:

The ONS reports that UK residents made only one million visits overseas by air in Q2, down around 95% on 2019.

Parkdean is reported by Sky News as set to list its shares on the UK stock exchange. Sky reports on further action in the staycation market, saying four bidders ‘are expected to table final offers for Park Holidays, another big player in the industry’ today.

Wyndham Hotels & Resorts has announced plans to add 12 properties in leisure destinations including two in the UK.

HVS reports that it has seen ‘global hotel values fall due to pandemic but recovery [is] anticipated by 2025.’

Owner Ferrovial has pulled funding for a third runway at Heathrow. The Telegraph reports ‘executives from Ferrovial, the Spanish infrastructure investor, attacked the UK’s aviation regulator for blocking plans to increase Heathrow’s landing charges by 90pc from next year.’ It adds that ‘though the CAA blocked Heathrow’s planned increases in landing charges, they have proposed allowing them to rise by up to 56pc. This means a family of four travelling to Florida will be paying an extra £100 or more to fly from the airport, leaving airline bosses as angry as the airport counterparts.’

Royal Caribbean has reported Q3 numbers saying that ‘by the end of this year, the Group anticipates that 50 out of 61 ships will have returned to service across its five brands, representing almost 100% of its core itineraries and approximately 80% of worldwide capacity.’ It would, understandably, rather concentrate on the future than the recent past.

PPHE last week reported on its Q3 saying its ‘positive Q3 momentum was driven by a strong recovery in average room rate across the Group’s portfolio, outperformance of our hotels in the UK and a strong summer season in Croatia.’

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STR reports that U.S. hotel occupancy declined slightly week to week last week ‘but still inched closer to the level achieved in 2019, as a shift to more hotel stays Monday to Thursday indicated rising business travel.’

OTHER LEISURE:

Sportech has updated on its proposed agreement with the Connecticut Lottery Company to deliver sports betting in the Company’s Connecticut venues saying it ‘is pleased to announce that, following a soft launch period last week, sports betting is now live at the Company’s three flagship sports bars in Stamford, Bradley and New Haven, with rollout across the seven remaining venues occurring in the next two weeks.’

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Facebook has changed its name to Meta.

FINANCE & MARKETS:

The US Commerce Dept has said that US economic growth slowed in Q3 to an annualised rate of 2%, down from 6.7% in the previous quarter. The slowdown was credited to the spread of the Delta variant of Covid.

The Bank of England’s MPC will report this Thursday on its recommendations for UK interest rates with some now betting on a rise, perhaps by 0.15% to 0.25%. UK medium length bond yields rose until around a week ago, when they steadied, in a move that indicated financial markets were expecting a move sooner rather than later.

Sterling $1.3683 and €1.1559. Oil $83.44. UK 10yr gilt yield 1.05%. World markets mixed with London due to open up around 13pts as at 7am.

RETAIL WITH NICK BUBB:

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