Langton Capital – 2021-03-26 – Pre-packs, R rate, vaccine passports, crowd funding & other:
Pre-packs, R rate, vaccine passports, crowd funding & other:
A DAY IN THE LIFE:
Confirmation, if confirmation were needed, yesterday that getting coffee coloured carpets is generally a good idea.
Because, in the event of accidents, say someone were to trip over the dog and drop a steaming mug on the floor, you can always work on the basis that ‘another half pint won’t hurt it.’
And, although nothing much is proof against a half-litre of blackcurrant juice, if anything, it’s safer to have coffee coloured furniture as well.
However, it is worth remembering that laptops can’t swim even if, as we found out to our cost just last year, they look for a while as though they’ve survived before succumbing to a bout of fizzing and popping before giving up the ghost altogether.
Anyway, we got the grass cut yesterday. Pumped the tyres up, charged the batter, filled the jerry can etc and all in March. Yes, March. I’m sure that means something about the summer or the weather or whatever. 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:
• See premium email
PUBS & RESTAURANTS:
Covid R rate:
• The government has said that it will be led by the data, not dates. Hence, the pathway to reopening will be influenced by the number of infections, hospitalisations and deaths. The R-rate and inoculations are also key inputs and, for a number of weeks now, the NIESR has produced its own estimate of the R rate. As at 23rd March, it says ‘the Reproduction number…had moved up to 0.9 – 1.0 by 19th March, which is again higher than SAGE’s estimates.’
• It says ‘this estimate was obtained after controlling for enhanced testing in schools that started when they reopened on the 8th of March. If enhanced testing in schools is not controlled for, the R estimate would be in the range 0.9 – 1.05.’ Whilst not yet seeming to threaten reopening dates, the number should be kept under review. ‘Reassuringly,’ the NIESR says, ‘hospital admissions and deaths due to Covid-19 continue their steady decline.’ This is presumably because, though the R rate is still near 1.0, most over-50s are now inoculated and most under-50s do not have serious infections.
Vaccine passports, moon-shots and the like:
• The BII has said that ‘vaccine passports for pubs [are] unworkable.’ It says ‘the suggestion of vaccine passports in order for people to visit our nation’s pubs, yet again places an unfair and unfounded burden on our industry, not shouldered by other sections of our economy. With indoor retail being able to open a full 5 weeks at least before our Covid-secure venues…the introduction of another barrier for them to trade freely will have a major impact on their profitability.’ This seems to be a fair point. It is not clear whether the PM’s suggestion that individual pubs might be allowed to decide whether to insist on vaccine certificates etc was a well-thought out move or an off-the-cuff suggestion.
• The BII points out that ‘despite over 60 million visits a week in the summer of 2020 to hospitality venues, there was no discernible rise in Covid rates caused by people safely socialising in our pubs.’ It says ‘the Prime Minister must deliver his roadmap commitment with pubs to be free of restrictions on June 21st.’ It concludes ‘our pubs, small businesses led by entrepreneurs, are facing a long road to recovery, more unworkable & baseless ideas will result in business failure & lost jobs.’
• Hugh Osmond describes the suggestion as ‘repressive and unethical’. UK Hospitality says it is ‘crucial that visiting the pub and other parts of hospitality should not be subject to mandatory vaccination certification.’
• An administrative burden but not without upside.
• The Guardian has reported that pubs could ‘be allowed to ditch social distancing rules and allow people to crowd together as long as they check customers’ Covid status on entry.’ It believes it has an exclusive. The Guardian says dropping social distancing (and maybe allowing bar service, vertical drinking and the like?) ‘would mean many pubs would be able to operate far more profitably, and is likely to be an incentive for citizens to get vaccinated or tested.’ The paper says a ‘Whitehall source stressed the consultation was in its early stages and that no decision had been made.’
Other Covid news:
• SIBA comments on the Government announcement of a new £1.5bn pot of business rates support for those which have not previously benefitted, including breweries, saying ‘it is hugely positive news that Government has finally recognised that many sectors, including brewing have been left behind over the last 12 months and are seeking to redress this. We warmly welcome this new round of business rates funding and will now press local authorities and Government to urgently prioritise and distribute these funds to breweries. The brewing sector has suffered enormously as pubs, which represent over 80% of our trade, have been closed off to us.’
Working from home:
• Santander has said it will close 111 branches across the country. TUI yesterday said it would close another tranche of retail outlets. The Nationwide yesterday said it would allow 13,000 staff to work wherever they wanted. Goldman Sachs is under pressure as junior staff say they are working 15hr days from home. John Lewis said yesterday it would not reopen eight department stores. The above (and many more similar stories) are mixing the impact of Covid with that of the internet. They support the view that some trends already in place have been accelerated by the pandemic. Workplaces and High Streets are likely to change and operators with a vested interest in the pre-Covid status quo may find this a challenge.
• The Competition and Markets Authority has concluded that the proposed merger of Crowdcube and Seedrs could operate against the public interest. The CMA says ‘investment in small and growing businesses is vital to the UK economy as we emerge from the coronavirus pandemic, and we have given this deal careful consideration.’ It says ‘these are the two largest equity crowdfunding platforms in the UK, with at least a 90 per cent share of the market between them and we see them competing closely on price and innovation. This means the merger could lead to less choice and higher fees for SMEs and investors.’
• Both companies are currently lossmaking. The rationale for the merger was, one would imagine, to stem these losses. That may not be possible and the very function that the CMA says it believes is vital could be threatened. However, it is what it is. The CMA says it has ‘reached the view that blocking this merger is likely to be the best way to maintain competition. The decision to block any deal is not taken lightly and is only made if there is a real risk of customers losing out.’ Seedrs says ‘we are deeply disappointed with these findings, and we firmly disagree with the CMA’s view that this would be an anti-competitive transaction.’ Crowdcube also expresses disappointment.
• Langton comment: See premium email
Companies & other news:
• The Glendola-owned Waxy O’Connors sit in Manchester is reported to have shut after almost two decades of active trading.
• 23.5 Degrees, which was Starbucks first UK franchised business partner, is to open its 80th store in the UK this week.
• Be At One has launched a new cocktail competition ahead of reopening in April and May.
• Chipotle has taken a stake in Nuro, which operates driverless delivery vehicles.
• The Inn Collection Group is to purchase Lake District venue The Wateredge Inn at Ambleside.
• Zonal has become a BII Trusted Partner.
HOTELS & LEISURE TRAVEL:
• PM Boris Johnson has told MPs ‘things are looking difficult on the Continent’. He says ‘we will have to look at the situation as it develops.’ See emails earlier this week. We believe concerns re the importation of new variants may mean that the curtain is likely to come on overseas holidays for this summer, possibly as early as 5 April. Should this happen, UK domestic capacity may struggle to meet demand.
• Travel Weekly has heard that holiday prices are rising sharply. The journal’s Future of Travel Spring Forum has heard from contributors that ‘average selling prices had risen by 37%-38% on long-haul and short-haul programmes.’ There has been some mix change and some out-and-out price inflation.
• TUI has cut capacity this summer from 80% to 75% of 2019’s level. Summer bookings may have stalled.
Other travel news:
• Airlines have welcomed what they hope are EU moves to fast-track development of a Digital Green Certificate.
• ABTA has extended the deadline for issuing refund credit notes for non-flight package holidays cancelled due to Covid-19 to 30 April.
• STR reports that US hotel occupancy is now at its highest level since early March last year. Comps are easier now that the pandemic has annualised. Occupancy, at 58.9%, is almost double that of a year ago.
• Dream Sports, which owns fantasy sports app Dream11, has secured $400 million in a new financing round.
FINANCE & MARKETS:
• See premium email.
• Stonegate Group has announced it is continuing its support for EI Publican Partnership publicans with rent and trade credits throughout April, May and June. The company says ‘this support builds on the substantial financial assistance given to publicans in the form of significantly reduced rents and trade credits, together with Government grants including the latest restart grants of between £8,000 – £18,000 as pubs prepare to reopen.’ Stonegate says the group will be ‘maintaining rent credits of up to 90% prior to outdoor areas opening on the 12th April. Following this date, the company will be providing publicans with trade credits equivalent to 100% of the value of the rent until 16th May when pubs can open indoors.’
• Nick Light, Managing Director, Leased & Tenanted, for Stonegate Group said “We are proud of the continuous financial support we have provided to our publicans throughout the pandemic and believe that these substantial trade credits, worth up to 100% of rent, will greatly help our publicans to successfully reopen their pubs. We are also providing a raft of re-opening advice, business-building tips and undertaking investment in outdoor areas so that our publicans can open safely and attract old and new customers alike who we know are keen to return to the great British pub.’
• The board of Ten Entertainment says it ‘has been advised by Nick Basing of his intention to step down as Chairman, a role he has undertaken for six of the twelve years he has been involved with the Company. A process to appoint his successor will now commence. It is anticipated that Nick will leave the business in September, following an orderly transition and handover period.’
RETAIL WITH NICK BUBB:
• See premium email.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 29 Mar 21 Ten Entertainment FY numbers
• 30 Mar 21 AG Barr FY numbers
• Est. 30 Mar 21 Time Out H1 numbers
• 31 Mar 21 Various Eateries AGM
• 1 Apr 21 Sportech FY numbers
• 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
• 28 Apr 21 YUM Brands Q1 results
• 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
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.