Langton Capital – 2020-09-10 – Rank, Fuller’s, SAGA, Sportech, Games Workshop, track & trace etc.:
Rank, Fuller’s, SAGA, Sportech, Games Workshop, track & trace etc.:
A DAY IN THE LIFE:
Bit busy this morning, on to the news:
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TRACK & TRACE, RULE OF SIX ETC.: Industry bodies say these changes were a surprise. Reaction & comments below: 10 Sept 2020:
Track & trace: See Premium Email.
PUB & RESTAURANT NEWS:
Track & trace:
• The Government is to make the collection of personal details for track and trace purposed compulsory for pubs and restaurants in England from next Monday. Taking such details is already mandatory in Scotland, Northern Ireland and Wales.
• Moving onto the topic when talking to the BBC, Health Secretary Matt Hancock said ‘we’re also going to enforce more strictly the rules around hospitality, including for instance you need to give your contact details when you go to hospitality, which has so far been voluntary.’ The rules had thus far been voluntary and Mr Hancock said some operators had ‘chosen not to’ take the details.
• BBPA CEO Emma McClarkin comments ‘this announcement came as a surprise’ but goes on to say ‘as one of the few sectors participating in track and trace the pub sector has been fully playing it’s part in ensuring people follow guidance to contain the spread of the virus up to this point and we will continue to do so.’
• The BBPA says ‘the impact of these new announcements can have a cooling effect on public confidence. This restriction comes at a delicate point in our pub recovery after a steady start this summer. We were already worried about levels of trade moving into Autumn and Winter.’
• It says ‘pubs will need more support from Government with continued business rates relief, VAT cuts and flexible furlough, as well as a significant cut in beer duty to help them survive, protect jobs and continue to serve communities. We need the Government to send the clear message that pubs remain open for business and the public should continue to support them.’
• See also premium email.
• Wireless Social says ‘UK footfall continued to grow, with Saturday figures increasing 3% on last week’s figures.’ It says ‘Sunday’s footfall was at minus 38% of February’s numbers, which was a fall from last week. However, this was a Bank Holiday, so it was to be expected. There was a 4% growth on Sunday prior to the bank holiday.’
• New West End, which reports on a daily basis, says that ‘West End footfall was down 7% week-on-week on Tuesday, 8 September.’ It says ‘compared to the same day last year, footfall was down 59%.’
• As seen above, footfall for the whole of the UK was only down 38% for Sunday. Apples with Oranges but this does go to show that certain parts of London continue to underperform the UK as a whole.
• Pizza Hut has said that it is planning to close 29 restaurants with the loss of 450 jobs. Pizza Hut said that the move was part of a CVA intended to ‘mitigate the financial impact of Covid-19.’
• The hospitality industry has faced a particularly acute set of problems. Pizza Hut said it had faced ‘significant disruption’ from the pandemic.
• The BBC reports that British employers planned more than 300,000 redundancies in June and July. With the furlough scheme ending in October, many firms will be taking the 45 consultation period required and counting backwards from 31 October.
• Lloyds Bank has said it is cutting 865 jobs
• Lancashire-based brewer and pub operator Daniel Thwaites has said that it has been forced to take the ‘unwelcome decision’ to start a programme of redundancies ahead of the winter and potential difficult trading.
• Thwaites says ‘against this background, we have taken the unwelcome decision to initiate a programme of redundancies to ensure our cost base reflects the environment that we expect to operate in over the coming months and protect the business against significant ongoing uncertainty.’
Other Covid-19 issues:
• The University of Edinburgh Business School has suggested that 58,000 jobs were at risk in the Scottish hospitality industry.
• UKH has combined with union, Unite, to set up a website, HospitalityUnite, that initially helped hospitality workers find alternative employment during lockdown. It is ‘now switching focus to support the Government’s Kickstart initiative for young people with the backing of leading trade association UKHospitality, Springboard, The Scottish Tourism Alliance and The Youth Group.’
• The High Court has confirmed it will issue a ruling on Covid business interruption insurance claims case on 15 Sept reports UKH’s Kate Nicholls.
• New York restaurants are to be allowed to reopen at 25% of pre-Covid capacity.
• IATA says physically shipping a coronavirus vaccine around the world will be the “largest transport challenge ever.” It says it will need the equivalent of 8,000 Boeing 747s.
• Fuller, Smith & Turner has updated on trading for the first 22wks of the financial year (to 5 Sept) saying that ‘having started the financial year with the entire estate closed, Fuller’s began a phased reopening of its Managed business on 4 July 2020 and, by the end of August, 169 sites had reopened. The Company has reopened a further 23 sites during September and over 90% of its Managed Pubs and Hotels are now open for business. Almost all Tenanted Inns have also now reopened, and commercial rent was reintroduced for Fuller’s Tenants on a tapered basis from August.’
• Fuller’s says ‘sales in those Managed Pubs and Hotels that have reopened since 4 July 2020 have grown steadily and are 80% of last year’s on a like for like basis. Trading across the Fuller’s estate in August was buoyed by the Government’s Eat Out to Help Out scheme, which grew trade and encouraged consumers to come back to the pub, reinstating it in their routine.’
• The company’s CEO, Simon Emeny, comments ‘we are still at the start of a return to normality, but we are quietly confident with the way business is progressing.’ He says ‘it has been an incredibly challenging time’ but says the team has adapted to ‘continue to deliver that great Fuller’s experience to our discerning customers.’
• Incipio Group has said that it has received support from its landlords during the months of lockdown. CEO Ed Devenport says ‘our landlords have provided us with opportunities that have been critical to our brand and growth, and our relationships with them are a priority whatever the future business climate holds. Prior to lockdown, the group was performing strongly and we remain hugely excited about our long-term future and the execution of our growth plans for 2021 and beyond.”’
• Beyond Meat, the non-meat meat company, has signed a deal that will see the company enter the Chinese market.
• Amazon has reported that its UK sales rose by 26% to £13.7bn last year. The company, which has been criticised in the past for its low tax payments, said it pays ‘all taxes required in the UK.’
HOLIDAYS & LEISURE TRAVEL:
• Saga reports H1 numbers saying underlying profits, for the finance & holiday company, fell by around 70% to £15.9m. CEO Euan Sutherland says ‘Saga has made significant progress in the first half.’ He concludes ‘Saga is a proud British business, with a strong brand, loyal customers and great people and we are excited about the opportunities ahead.’
• Travel Weekly says that a ‘Covid-testing regime for travellers could be in place for the October half-term holidays.’ Apparently, results may be produced in 15 minutes. This would increase costs but also confidence.
• TUI-owned ski company Crystal has said that it is ‘no longer operating a chalet programme for the winter 2020/2021 season.’
• Jet2holidays has extended the suspension of its Canary Islands flights to 26 September.
• The PM has said “liberating” people to fly is an “absolute priority.”
• US hotel giant Marriott it to lay off 673 employees at its Maryland HQ.
• The business travel sector has begun lobbying government. Business Travel Association CEO Clive Wratten has said that his sector is the “lifeblood of the economy.”
• TUI has reported that certain revolving credit facility holders have granted a waiver on their ability to limit the company issuing more debt.
• Hotels in Bolton, reportedly, will not have to shut.
• Ryanair has cut its target for the number of passengers in the year to March 2021 from 60m to 50m. CEO Michael O’Leary told Reuters ‘I think the winter of 2020 will essentially be a write-off.’
• O’Leary, not one to mince his words, said that the UK government’s travel quarantine policy is a “shambles of mismanagement”. O’Leary says ‘they were late into lockdown, they were late into testing, they were late into face masks, now they’re pooh-poohing testing. Testing is the only way forward here.’
• Uber is committed to being 100% electric by 2040.
• Rank Group has reported FY numbers to end-June saying underlying operating profits fell by 32% to £51.1m. CEO John O’Reilly says ‘with positive momentum from the transformation programme, Rank performed very strongly during the first part of the year and into the second half. Despite continued good growth in our digital brands, with our venues closed from mid-March, the impact of the COVID-19 pandemic on the Group has been significant.’
• Rank says ‘with the huge commitment and dedication of our colleagues, very tight cost control across the business and the support we have received from Government, we have carefully navigated the past few months and are now beginning to successfully emerge.’
• Rank says its Mecca venues have reopened in July and August with revenue levels at around 70% of last year. The company says ‘we expect to rebuild our revenues through the year with an increase in footfall expected once social distancing and other supply constraints reduce and customer confidence returns.’
• Games Workshop updates on trading saying that Q1 trading has been ‘ahead of the Board’s expectations.’ It says increased revenues have been ‘driven by healthy growth in our online and trade channels. However, our retail channel is still recovering from the COVID-19 closures earlier in 2020. The longer term impact on the Group as a result of the ongoing pandemic is still unknown.’
• Sportech reports ‘2019 marked a year of operational improvement and a serious motivation to strengthen digital capabilities. 2020 began well, however, as a business primarily dependent on sporting events taking place, the impact of COVID-19 clearly affected performance. The Group enhanced and diversified its client base further through record new and extended client agreements during the period, providing a realistic prospect for incremental growth in 2021. The Board’s focus remains absolute in creating tangible long-term value for shareholders’.
• Esports company Guild Esports PLC has announced its intention to seek a on the London Stock Exchange this autumn. Guild says it ‘will become the first esports franchise to join the LSE, and its founding shareholders include David Beckham, former football player and captain of England, and now co-owner of new MLS team Inter Miami CF.’
• It says ‘the Company plans to create a leading global franchise by establishing its own esports teams to compete in major esports tournaments and a player training and scouting infrastructure modelled on the talent academies pioneered by Premier League football teams over many years.’ It says ‘additionally, David Beckham will use his global influence and following to support the development of the Company’s brand and business.’
• Chairman Carleton Curtis says ‘the growing global popularity of esports has enabled several existing franchises to monetise their activities through sponsorship, retail, merchandising, apparel & product licensing, new media & mobile, broadcasting and tournaments. Guild will be the first esports franchise to join the London stock market, which will provide us with the caché, credibility and capital to fulfil our ambition to become one of the world’s top ten esports franchises within three years.’
FINANCE & ECONOMICS:
• Sterling mixed at $1.299 and €1.099. Oil up at $40.74. UK 10yr gilt yield up 6bps at 0.24%. World markets up yesterday. London set to open down around 14pts.
START THE DAY WITH A SONG:
The song has been furloughed. See you on the other side.
RETAIL WITH NICK BUBB:
• Today’s News: The Morrisons interims today are headlined “Responding and growing”, with CEO Dave Potts trumpeting that “From the start of the pandemic we stepped up and put the company’s assets at the disposal of the country to help feed the nation”. Profits were c25% down, as expected, given £62m of net COVID costs, but Morrisons expect that net cost to reverse in H2, to +£60m, given the full benefit of Business Rates relief and the company has had the confidence to increase the interim dividend by 6% and forecast that full-year profits will be up. After last week’s strong trading update, there is not a lot new in the Dunelm finals (for y/e June), although the statement is headlined ”Emerging stronger and accelerating our transition” and the company says “It is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the
• News Flow This Week: Apart from the outcome of the Dixons Carphone and N Brown AGM’s today, there is no more company news scheduled this week, although The Hut Group’s £4.5bn IPO continues to bubble away (controversially) in the background.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 1 Sept 20 Gear 4 Music AGM
• 2 Sept 20 Gym Group H1 numbers
• 3 Sept 20 PPHE H1 numbers
• 8 Sept 20 Fever Tree H1 numbers
• 8 Sept 20 DP Eurasia H1 numbers
• 10 Sept 20 Morrison’s H1 numbers
• 10 Sept 20 Rank FY numbers
• 10 Sept 20 Saga H1 numbers
• 16 Sept 20 Loungers FY numbers
• 24 Sept 20 Safestay H1 numbers
• 28 Sept 20 Diageo AGM
• 28 Sept 20 Time Out AGM
• 30 Sept 20 Compass Group FY update
• 30 Sept 20 Everyman Media H1 numbers
• 30 Sept 20 888 Holdings H1 numbers
• 1 Oct 20 Pepsi Q3 numbers
• 1 Oct 20 Constellation Brands Q2 numbers
• 6 Oct 20 Restaurant Group H1 numbers
• 9 Oct 20 JD Wetherspoon FY numbers
• 22 Oct 20 Gear 4 Music trading update
• By 31 Oct 20 DP Poland H1 numbers
• 3 Nov 20 DART Group AGM
• 17 Nov 20 Gear 4 Music H1 numbers
• 19 Nov 20 Dart Group H1 numbers
• 24 Nov 20 Compass Group FY numbers
• 26 Nov 20 Britvic FY numbers
Many results are likely to be delayed. For information purposes, the results below were delivered at these dates last year.
2019 COMPARATIVE RESULTS:
15 Aug 19 Vianet trading update, 22 Aug 19 Playtech H1, 22 Aug 19 Sportech H1, 28 Aug 19 Loungers FY results, 28 Aug 19 Fulham Shore AGM, 30 Aug 19 Gear 4 Music AGM, 6 Sep 19 Greene King AGM, 10 Sep 19 888 Holdings H1, 12 Sep 19 Comptoir H1, 19 Sep 19 Diageo AGM, 19 Sep 19 City Pub Group H1, 19 Sep 19 Saga H1, 23 Sep 19 Brighton Pier Group FY, 24 Sep 19 TUI Group FY trading update, 24 Sep 19 DP Poland H1, 24 Sep 19 Ten Entertainment H1, 24 Sep 19 Hotel Chocolat FY, 24 Sep 19 AG Barr trading update, 24 Sep 19 Tasty H1, 25 Sep 19 Shepherd Neame FY, 26 Sep 19 Time Out H1, 26 Sep 19 M&B FY trading update, 26 Sep 19 SSP FY update. 27 Sep 19 Escape Hunt H1
• Looking at the multiple challenges of Covid, rebooting the economy & handling Brexit, it’s hard not to feel grateful for at least one thing, we’ve got such a competent, confidence-inspiring, consistent government that pays enormous attention to detail.
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