Hostelworld, Stonegate, Hawthorn, Nightcap, P&O & other news:

A DAY IN THE LIFE:

Not entirely coincidental with it being Mothers’ Day, I was in a garden centre over the weekend.

Delightful, I’m sure.

And I can just about manage it once in a twelve month but, if I wanted to see a bunch of weeds in a shop, some of which were admittedly ‘flowers’, I could always put a till in our garden and have a cheaper cup of coffee into the bargain.

But, perhaps, that’s a little unfair.

I was suffering a bit of kick-back after the Covid jab – if you’ve had the illness and then the jab, your antibodies apparently work themselves up into a righteous state of outrage and muscle-aches and a cracking headache are the result – and visiting on a windswept and chilly March day during lockdown wasn’t to see the place at its best.

It might look charming in May. Some of the flowers might even be in bloom and the visitors, namely me, might be a tad less grumpy.

Anyway, let’s move on to the news:

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PUBS & RESTAURANTS:

Covid. More lost trade.

• The BBPA points out that ‘pubs will miss out on 14 million sales of pints this St Patrick’s Day due to the fact they are required to remain closed due to the lockdown.’ It says some £54m in revenue will be lost.

• CEO Emma McClarkin says the closure over yet another drinking occasion is ‘a real disappointment for our pubs too, who will miss out on what would’ve been a big boost to their trade and at a much-needed time too.’ Ms McClarkin says ‘we urgently need to get the pub reopen and operating without restrictions so the recovery can truly begin.’

• The BBPA is lobbying against backsliding, saying the loss of another big day ‘made it all the more important that pubs do fully reopen on June 21st as stated in the Government’s roadmap for reopening.’

• Langton comment: See premium email.

Covid. Coiled spring? Catch up spend? Revenge spending?

• This is a big topic with a number of moving parts. Experience last summer suggests a sharp bounce in hospitality spend. There will be no EOTHO this year, but the betting is still on the consumer being keen, very keen even, to get out to the UK’s pubs & restaurants. But this spend will not be evenly spread. Suburban units will perform better than those in city centres and the provinces may outperform London (certainly Central London, at any rate).

• However, revenue lost to hospitality may not be ‘caught up on’ as a pizza forgone in February or March is unlikely to mean the consumer eats twice as many of them in April or May. And spending on drink in the on-trade, which has been replaced by spending in the off-trade in real time, will not be doubled up on. That said, beer gardens will be busy. We are hearing anecdotally that it’s difficult already to get tables later in April.

Use of Tech:

• Zonal & CGA’s latest GO Technology report concludes that ‘Covid-19 has fundamentally transformed the relationship both consumers and hospitality operators have with technology.’ The report finds since summer 2020, 76% of consumers have pre-booked to eat or drink out in a hospitality venue and 45% are now ordering food and/or drinks on mobile devices when eating out. It says 56% of 18- to 24-year-olds would prefer to order online even after the country has been safely vaccinated.

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Company & other news:

• The Stonegate Pub Company has reported 52wk numbers to 27 September 2020 to Companies’ House. Following its purchase of EI Group during the period under review, Stonegate is the largest pub company in the country by pub numbers, with some 4,708 pubs at the financial year end. EI Group was owned for a part of the year (from 3 March). Revenues for the year, which was greatly impacted by Covid, down to £707m (even including the impact of the EI acquisition) from £853m in the prior year. The underlying loss before tax is £207m and the reported loss is some £746m (after £539m of exceptional items). The retained loss since incorporation is £763m. The company issued shares during the year and shareholders funds, back at the end of September, were £437m (2019: deficit £12m).

• Langton comment: See premium email.

• Hawthorn Leisure, which is the leased & tenanted pub opco owned by NewRiver, has reported accounts to 29 March to Companies’ house. The numbers are now very historic as they are essentially pre-Covid, but the accounts were signed on 24 Feb this year, so there is some comment on Covid. The company reports revenues of £13.7m (against £16.7m in the prior year) with an underlying loss before taxation of £162k. The reported loss before taxation is £4.7m. Retained earnings slipped, as a result of the loss, and total equity is £56.4m.

• Langton comment. See premium email.

• Hawthorn Leisure Holdings, which is owned by Pub REIT, a part of NewRiver REIT PLC, and is not an operating company, has reported full year numbers to 29 March 2020 to Companies’ House. The company reports a loss before tax of £5.3m against a profit before tax the year earlier of £23.2m. Retained earnings fell to £56.3m from £61.6m in the prior year.

• Nightcap, which recently bought London Cocktail Club and listed on AIM, has commented on interim numbers for the period to 31 December 2020 (during which it was a cash shell). It says it is making good progress in building a property pipeline. The group had £3.75m in cash as at 28 February 2021. Nightcap CEO Sarah Willingham says ‘we believe that drinks-led hospitality will come back stronger than ever during the second half of 2021.’ She says ‘the opportunities for Nightcap are enormous.’ Nightcap intends to grow from 10 to 40 units over the next 5yrs. Properties are now more reasonably priced. Nightcap will reopen five units on 12 April with the other five due to reopen on 17 May.

• Meatless Farm may manufacture lab-grown meat

• Beijing has reportedly told Alibaba to sell off its media assets including Hong Kong’s South China Morning Post

HOTELS & LEISURE TRAVEL:

The medium term upside:

• The state of demand for the peak season remains to be seen. The leisure travel industry is very optimistic by nature and there are certainly some reasons to be cheerful.

• Jet2.com and Jet2holidays have reportedly seen bookings for Turkey double since the country said it would welcome UK visitors without the need for a vaccine certificate. Whilst possibly indicative of a deeper demand, this is likely only a one-day snapshot. CEO Steve Heapy says ‘Turkey has continued to be a popular choice, and the welcome news that UK holidaymakers can enjoy the Turkish sunshine this summer has translated into an immediate rush of bookings.’

• Portugal has been taken off the UK’s travel ‘red list’. Mauritius, for those with deeper pockets, has also come off the list. Four countries have gone on the list, Ethiopia, Oman, Somalia & Qatar.

• Analysing the Spanish hotel industry, STR has said the Spanish industry noted that UK travellers’ ‘reservations for the 2021 summer season skyrocketed after British Prime Minister Boris Johnson announced the current ban on non-essential foreign travel by British citizens would be lifted on May 17.’ The number of British visitors to Spain fell from 18m in 2019 to just 3m last year. STR says ‘Spanish hoteliers said they are now more optimistic because of the U.K. opening up international travel, the rollout of vaccines and efforts by governments to come up with a safe travel system for fueling the jump in bookings reported by tour operators and travel agents.’

Ongoing short term downside:

• Norwegian Cruise Line Holdings has said that it will not resume sailings until at least 30 June. It says it ‘will continue to work in tandem with global government and public health authorities and its Healthy Sail Panel expert advisors to take all necessary measures to protect its guests, crew and the communities visited.’

• Langton comment: See premium email.

Company and other leisure travel news:

• P&O has announced that passengers cruising around the British Isles this summer will need to have received both of their coronavirus jabs. Saga has made similar statements. Passengers will also have to have travel insurance that covers Covid-19. It’s not clear just now how available that actually is.

• Carnival brands Princess Cruises and Holland America Line have extended their pauses on cruising. There will be no departures from Seattle to Alaska until at least the end of June. There is a No Sail Order in place at present. This should be replaced by a new Framework for Conditional Sailing Order at some point.

• Uber has announced that it will give its 70,000 UK drivers a guaranteed minimum wage, holiday pay and pensions. It says it does not think this should lead to higher fares. The company lost a court case on the issue last month.

• Hostelworld Group has announced full year numbers to 31 December 2020 saying that the results were in line with expectation and adding that the group is ‘well positioned for a recovery in travel.’ It says full year bookings were down by 79% after a fall of 6% last year.

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OTHER LEISURE:

• The Gym Group has undertaken an analysis of its ‘social impact’ and concludes that it has ‘created £1.8bn in social value since 2016.’ It quotes research by Sheffield Hallam University as saying that ‘using the gym reduces the likelihood of developing diseases such as diabetes, heart disease, cancer and depression, and also increases life satisfaction, improves educational attainment and reduces the rate of crime among young men.’

FINANCE & MARKETS:

• Bank of England governor Andrew Bailey has said that there are ‘upside risks’ to his growth estimates for the UK economy. The Bank’s governor has been criticised recently for the failure of the FCA, where he was boss, to effectively oversee the Woodford funds and for failing to declare a potential conflicts of interest in a scandal that saw thousands of bank customers mistreated,

• Bailey says the UK economy could be back to its pre-Covid size. Mr Bailey has access to more stats than we do, but that sounds a little optimistic. The Bank’s MPC will set UK interest rates at its monthly meeting tomorrow. Bailey said inflation will rise but he did not agree with suggestions that the Bank and the Treasury’s borrow and spend policies could push it to 4-5% by the end of the year.

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TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 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

• 18 Mar 21 Bank of England MPC meeting

• 19 Mar 21 JD Wetherspoon H1 numbers

• 19 Mar 21 GfK UK Consumer Confidence 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

• Est. 9 Apr 21 Barclaycard Consumer Spending (March)

• 13 Apr 21 Just Eat Q1 numbers

• 15 Apr 21 Pepsi Q1 numbers

• 15 Apr 21 Naked Wines FY trading update

• 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

• 6 May 21 Bank of England MPC meeting

• 7 May 21 Intercontinental Hotels Q1 numbers

• Est 9 May 21 Barclaycard Consumer Spending (Apr)

• 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

• 26 May 21 C&C FY numbers

• 24 Jun 21 Bank of England MPC meeting

• 27 Jul 21 Campari 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

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 26 Oct 21 Campari Q3 numbers

• 8 Dec 21 TUI FY numbers

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