Langton Capital – 2021-03-09 – Deliveroo, reopening, holiday plans, staycation prices etc.:
Deliveroo, reopening, holiday plans, staycation prices etc.:
A DAY IN THE LIFE:
I’ve never been a fan of loose ends, maybe it’s the accountant in me.
I was told, when learning the bean-counters’ craft, to double underline totals and the satisfaction of being able to, sometimes literally, draw a line under things, has stuck with me.
Nonetheless, I have to admit, it’s sometimes tempting to let your in-tray ferment a little bit, in the hope that the contents therein will simply fade away.
However, whilst the good stuff, like invites to lunch (a chance would be a fine thing) do tend to ‘go away’ if you ignore them, the bad stuff, like bills, demands from your freeholder, the VAT man, the utility-providers, reminders to submit data to various bodies including the census people, the FCA or whatever just tend to get angrier and angrier until they turn red and explode in a shower of unpleasant consequences.
So, it’s more loose-end tidying for me, the fun will never stop. Time to fill in the latest FCA, Consequences of Covid questionnaire and move on to the news:
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DELIVEROO – INTENTION TO FLOAT:
• Deliveroo has confirmed that it will IPO on the London market.
• The group has confirmed a fund for riders, money to help get restaurants open and the intention to have two classes of shares, with one having more voting rights than the other.
• New news is the comment on 2020 trading. There is no firm timetable. Nor is there detail as to valuation, though £7bn has been mentioned
• The ‘Offer would be comprised of new Shares to be issued by the Company and existing Shares to be sold by certain existing shareholders.’
• There is no suggestion as to size (of either new stock or existing holders’ sales)
• B shares will be held only by Will Shu. His shares will have 20 votes each and they will not be traded.
• Interestingly, the company says ‘on the third anniversary of an IPO, the Class B Shares will automatically convert into Class A Shares.’
Letter from CEO, Will Shu:
• Founder Will Shu says ‘I was never into start-ups.’ He adds he had one idea and says ‘I wanted to get great food delivered from amazing London restaurants.’
• Mr Shu says ‘we operate in 12 markets right across the world. 115,000 food merchants, over 100,000 riders, millions of consumers.’
• He says Deliveroo was able to help restaurants get food to their customers during lockdown.
Current (or at least recent past) trading:
• The company, which only lodged its December 2019 accounts with Companies’ House on 6 Jan this year, has given some details of 2020 trading.
• It says platform transactions (not company revenue) were up by 64.3% to £4.1bn from £2.5bn in 2019
• The underlying loss for the year was £223.7m compared to an underlying loss of £317.3m in 2019
• As at end-December 2019, the company had an accumulated loss of £909m. The 2020 will take this up to total losses of £1.1bn
Other company comments:
• Deliveroo says that its technology sets it apart. It says ‘with our global scale, proven track record of entering and growing in new markets, we believe we can realise further growth opportunities both in existing and new markets.’
• Will Shu is CEO and Adam Miller, Chief Financial Officer, joined the company in 2019
Langton Comment: See premium email
PUBS & RESTAURANTS:
• The BBPA has circulated the key findings of a review by think-tank Localis, which suggests that a ‘failure to support the nation’s pubs return from lockdown risks imperilling the government’s levelling up agenda for economic and social renewal.’
• The report The Power of Pubs says that the roadmap to un-lockdown cannot be allowed to slip.
• The BBPA says ‘among key recommendations, the report authors urged central government to further reduce the tax burden on the pub sector to aid the recovery and called for an extension to the Business and Planning Act 2020.’
• Localis says ‘where there’s a pub, there’s a community. As one of the biggest contributors to the UK economy, the sector has a vital role to play in the recovery and levelling up journey of the country as well as in maintaining community cohesion and social resilience well beyond the pandemic.’
• BBPA CEO Emma McClarkin says ‘the Pandemic has fractured our communities economic environment and frayed our social ties.’ She says ‘the pub is a powerful embodiment and symbol of both, woven into the fabric of our society and it is one we need to support and strengthen as we rebuild our trade as well as reconnect our communities.’
• Rebuilding urban demand.
• Foodservice analyst Peter Backman encapsulates the issues when he says that ‘there are three basic “tribes” in any city – locals, commuters and tourists.’ Asking when (rather than if) the above return to city centres does seem to be a good starting point for analysis.
• Backman says ‘it is clearly a long time until we get to see what the future for restaurants in city centres might look like, especially since until Covid restrictions are removed we are not even at the starting blocks.’
• Philip Ross Solicitors has commented on the demands by some businesses that staff get vaccinated saying that ‘this stance has been openly condemned by both trade unions and the government, with Downing Street declaring that it would be ‘discriminatory’ to force employees to be vaccinated in order to keep their job.’
• The solicitor says any demands ‘may also depend on the sector of the business. Employment law may declare it reasonable to require employees working with vulnerable groups, for example in a care home, to have a vaccination.’
• This would be less applicable if workers could work from home – but it would leave the hospitality industry, where staff work directly with customers, often involving contact with food & drink, somewhere in the middle.
Company & other news:
• Expected today, Domino’s full year numbers, see premium email.
• Topical, given the Deliveroo news above. Punch Pubs announces that a new ‘virtual’ pub brand, Bull & Bird, created in partnership with Deliveroo, is ‘bringing lip-smacking burgers to homes up and down the country – providing local Punch pubs with a critical income stream in the process.’
• The brand was first launched in three pubs in November 2020. Punch says ‘the new ‘dark kitchen’ concept saw immediate success, selling out in 2 of the 3 trial venues.’ It adds ‘encouraged by the sales, response from customers (average 4.7/5 rating on Deliveroo), and the pub’s ability to adapt to this exciting new food offer, Punch expanded the trial base to a further twenty pubs stretching from Swindon to Macclesfield.’
• Filipino fast food chain Jollibee is reported set to open 10 new restaurants in the UK this year. The company is said to have earmarked £30m for expansion. A further 15 to 20 openings are pencilled in for next year
• Pernod Ricard is rumoured to have made a takeover approach to Australia’s Treasury Wine Estates. Shares in the latter jumped by more than 7%
From yesterday’s email:
• The Telegraph reports Richard Caring as saying that his Bill’s Restaurants chain has a secure future. It refers to the company’s recently filed accounts in which it says that, though the company breached covenants with HSBC last year, it has secured a waiver on covenants since. Caring is quoted as saying ‘with the support of our landlords and bank, we are confident that we will secure the future of the restaurants and the 3,000 members of staff who have worked so very hard and put up with so much difficulty over the past 12 months.’
• Domino’s Pizza has this morning reported that it has reached an agreement to sell its business in Sweden for €2m (£1.8m) in cash. It says the transaction is expected to complete on 2 May. DOM says ‘the disposal of Domino’s Sweden is part of DPG’s planned exit from all directly operated international markets, to allow management to focus on its core UK and Ireland operations, as announced by the Company in October 2019, and follows the exit in 2020 from Domino’s Norway.’ At the date of the announcement, Domino’s Sweden operates 14 stores in Sweden. The value of the assets was £9.8m.
HOTELS & LEISURE TRAVEL:
• TTG has picked up on PM Boris Johnson’s comment yesterday that Michael Gove was looking at the concept. He said ‘vaccine passports as an idea are not new when it comes to international travel, there have been certificates for things like yellow fever and other diseases in the past and I’m sure that will be a feature of our lives in the future.’
• ABTA chief Mark Tanzer has told Travel Weekly that the travel industry can realistically hope for travel to restart from May 17
• The Canary Islands hopes to welcome British tourists back to the islands. No dates are mentioned but the islands’ tourism minister Yaiza Castilla says ‘we want to be at the same level at the UK and also be ready with the same health protocols so that we can guarantee their safety, so that they can enjoy their holidays in the Canaries.’
• The UNTWO says a third of global tourism destinations are still closed.
MORE LEISURE SNIPPETS:
• The BBPA reports that Wetherspoon, Loungers, The Oakman Group and Drake & Morgan have joined the trade body.
• Mitch Tonk’s Rockfish restaurant chain is reported to be opening a new location, its ninth, in Salcombe, Devon
• Rooftop bar The Green Room is set to open offering plant-based food to customers this summer
• Hero Brands is reported to have invested in Island Poke in order to fund the grab and go brand’s international expansion
• TikTok is reported to have agreed a deal on a new office building in London
FINANCE & MARKETS:
• Governor of the Bank of England, Andrew Bailey, has said there is ‘light at the end of the tunnel’ with regard to Covid.
• Mr Bailey told The Resolution Foundation that some working from home was likely to continue. He says ‘reduced travel time is a positive, but there may be lower innovation and creativity which would otherwise come from people being together more.’
• Bailey adds ‘I see reasons to believe that the longer-term negative economic effects of the COVID shock will be smaller than we have seen in the past, particularly in the 1980s and early 1990s.’
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 4 Mar 21 William Hill FY numbers
• 4 Mar 21 Entain FY numbers
• 5 Mar 21 Marston’s SA Brains transaction webinar
• 9 Mar 21 Domino’s Pizza FY numbers
• 10 Mar 21 Restaurant Group full year numbers
• 10 Mar 21 Just Eat FY numbers
• 11 Mar 21 Playtech FY numbers
• 11 Mar 21 Morrison’s FY numbers
• 15 Mar 21 Carlsberg AGM
• 16 Mar 21 Gregg’s FY numbers
• 16 Mar 21 C&C pre-close trading update
• 17 Mar 21 Hostelworld H1 numbers
• 18 Mar 21 Fever Tree FY numbers
• 18 Mar 21 Gym Group FY numbers
• 19 Mar 21 JD Wetherspoon H1 numbers
• 23 Mar 21 DP Eurasia FY numbers
• 24 Mar 21 M&B AGM
• 25 Mar 21 Compass Group H1 update
• 25 Mar 21 TUI AGM
• 29 Mar 21 Ten Entertainment FY numbers
• 30 Mar 21 AG Barr FY numbers
• 31 Mar 21 Various Eateries AGM
• 7 Apr 21 Saga FY numbers
• 8 Apr 21 Sportech FY numbers
• 8 Apr 21 Constellation Brands FY numbers
• 13 Apr 21 Just Eat Q1 numbers
• 15 Apr 21 Pepsi Q1 numbers
• 22 Apr 21 Domino’s Pizza PLC AGM
• 23 Apr 21 Gear4Music results
• 28 Apr 21 Carlsberg Q1 numbers
• 4 May 21 Campari Q1 numbers
• 7 May 21 Intercontinental Hotels Q1 numbers
• 12 May 21 Compass Group H1 numbers
• 12 May 21 Stock Spirits H1 numbers
• 12 May 21 TUI H1 numbers
• 18 May 21 Britvic H1 numbers
• Est 19 May 21 Marston’s H1 numbers
• 27 Jul 21 Campari H1 numbers
• 10 Aug 21 Intercontinental Hotels H1 numbers
• 12 Aug 21 TUI Q3 numbers
• 18 Aug 21 Carlsberg H1 numbers
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
• 8 Dec 21 TUI FY numbers
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