Langton Capital – 2021-04-13 – Reopening, private co accounts, unlevel playing field, Deliveroo etc.:
Reopening, private co accounts, unlevel playing field, Deliveroo etc.:
A DAY IN THE LIFE:
The fondly-remembered Easter weekend already seems like a long time ago.
It created two, four-day weeks and, though that’s a good thing, it did mean that my alarm went off at stupid-o’clock on the Friday morning and, twenty minutes after that and when I was well and truly asleep again, my super-safe, super-loud, backup alarm also went off.
This made me as popular as you would readily imagine and I secured my place in the doghouse when, despite heartfelt and truly meant (at least the time) promises that I would deal with the matter promptly, the same thing happened on the Monday.
And, whilst there’s a certain satisfaction to being able to go back to sleep, that was little more than a dream because the dog had other ideas.
Dedicated foodie that he is, he knows that, 99% of the time, the alarm heralds me staggering down the stairs ten minutes later to feed him and, if he howls and whines loudly enough, he can infill the remaining 1% with more of the same.
Which is what he did but, anyway, the pubs opened yesterday to snow storms in the south and four degrees of frost in the north. Minus four tonight but no precipitation. On to the news:
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PRIVATE COMPANY ACCOUNTS – BREAD HOLDINGS:
Bread Holdings has reported very historic full year numbers for the year to 29 Feb 2020 to Companies’ House. See premium email.
PUBS & RESTAURANTS:
• Snow in the south of England, minus three and frost in the north. But, in both cases, it faired up and pubs and restaurants were able to serve food and drink for consumption outside. This, at least, is something. There’s no 10pm curfew but, as it’s forecast to be minus four overnight up here, customers frequenting venues that haven’t invested in a number of walls, a roof and space heaters, will need to be both dedicated and well-wrapped-up if they’re going to stay out late.
• There was a lot of news rehashed during the day yesterday with little extra to add. We were reminded that only two in five pubs were forecast to be reopening with perhaps half that proportion of restaurants – the latter excluding delivery-only, which will still be possible and occasionally profitable from venues without outdoor space. We were also told that queues formed outside Primark at 7am on Oxford Street, to which the obvious response has to be: why?
• The Morning Advertiser reports that customers turned up in ski-jackets and hats in order to brave the cold. It also points out that the crowds outside Primark & other retailers supports the suggestion that hospitality is being discriminated against in that it cannot let customers into its premises (other than to use the loo or pay the bill).
The bigger picture:
• A number of operators and trade bodies have said, rightly, that 12 April is just one step in the right direction. Foodservice analyst Peter Backman reports, ahead of reopening, that his numbers ‘show a bad situation getting better.’ Mr Backman says ‘I expect sales to grow quite fast this year, to reach about 55% of 2019 levels (and bear in mind trading in some commercial sectors will have been broadly non-existent for the first four months of this year). Next year I expect sales to be at about 80% of pre-covid levels with the most problematic sectors being workplace and hotels.’ He says ‘the market will probably get back to pre-covid levels in 2024 or 2025.’
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Working from home:
• There is still very much of a two way pull going on. The ICAEW points out, on a practical level, that ‘employees working from home due to the coronavirus pandemic can continue to claim tax-relief on costs not reimbursed by their employer, but a new claim will need to be made for the 2021/22 tax year, HMRC has confirmed.’ It says ‘employers can pay a tax-free allowance of up to £6 per week/£26 per month to employees required to work from home. During the coronavirus pandemic, employees can claim tax relief for this amount when employers do not reimburse costs.’
Company & other news:
• Deliveroo’s shares flirted with positive territory (albeit from much lower levels than when they attempted this last week) before succumbing and falling another 4p (or around 1.5%) to 251p. We have pointed to the myriad ‘reasons’ for the sustained drop but remain of the opinion that the business model is unproven.
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• Numbers expected later today from Just Eat and Revolution Bar Group. See premium email
• Drinks Business points out that ‘the share prices of the four European-based spirits companies, Pernod Ricard, LVMH, Remy Cointreau and Davide Campari Milano, are all at or near record highs, despite much of Europe remaining in lockdown but with loss of trade in restaurants and bars being partially replaced by flourishing off-market sales and burgeoning e-commerce.’ The companies have been supported by the fact that their Far East markets, which a year ago we thought would be their Achilles’ Heel, have bounced back strongly.
• The Adventure Bar Group has announced the opening of its first site outside London. The unit, in Birmingham, will be followed in May by a second site, also in the city.
• Sky reports that Goldman Sachs ‘is placing a big bet on the growth of Soho House’ via a $770m loan.
• Brew By Numbers is in planning to open a new taproom and brewery in Greenwich.
• Brewdog has reiterated that it has plans to open a beer-themed hotel in Edinburgh’s Old Town.
• Molson Coors is reported to have secured exclusive distribution rights in Western Europe to Jimmy’s Iced Coffee, Lixir Drinks, and Tarquin’s Gin and Twin Fin Rum.
• Contract catering operator Elior has reportedly bought French start-up company Nestor for an undisclosed sum.
• The Guardian reports that winemaking regions in France have just suffered some of the most severe spring frosts in decades.
HOTELS & LEISURE TRAVEL:
• Accenture has reported that 87% of travel consumers approached would support Covid passports. This is broadly in line with the finding of other operators. It varies by geography and there is limited depth (as in, what would you pay for it, etc). Accenture finds 58% plan a trip in the next six months, but 53% expect to spend less on travel in the next six months than they did in the same period in 2019.
• Skyscanner says 49% of consumers have a positive outlook viz travel with only 20% believing that the situation is “getting worse”.
• Travel Weekly reports Andalucia’s tourism minister Juan Marin as saying re the UK’s travel review that ‘we are saddened to hear that major airlines such as Jet2 have taken the difficult decision to postpone their operations given the lack of clarity around likely start dates or requirements.’
• Heathrow has reported passenger volumes down 82.6% in March this year versus March last. The comps are about to get much easier.
• The French government is considering banning short haul flights where trains are available in a move designed to reduce carbon emissions.
• Travel Weekly reports that a number of London hotels are discounting rates from late-May in order to boost trade. The question will be ‘discounted from what original price?’ A spokesperson for the promotion said: ‘The last 12 months have been an incredibly tough time for the UK tourism industry and in particular the London hotel sector.’
• HVS reports that ‘total European hotel transaction volume fell by 69% in the year of the pandemic following a record high the previous year when €27.1bn-worth of hotel deals were struck.’
• Destination Analysts in the US reports ‘over 86% of American travellers currently have at least tentative leisure travel plans and 72.8% expect to travel for leisure within the next three months alone.’ US consumers have been quicker to return to their travelling habits than have consumers in the UK.
• The Guardian outs Ladbrokes’ owner, Entain, as not paying back furlough cash despite a) a surge in online betting and b) the fact that rival William Hill has paid back the cash. William Hill previously said ‘in light of this positive trading environment, the board feel it is appropriate to repay the furlough funds received, amounting to £24.5m, and we will not be claiming the job retention bonus.’
• There has reportedly been an ‘explosion’ in the number of drive-in events, including outdoor cinemas, planned for this summer.
• The UK’s Vitec Group has announced the acquisition of video software developer Lightstream for £26m and LED solutions company Quasar for £4.4m.
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 8 Apr 21 Everyman Media FY numbers
• 8 Apr 21 Constellation Brands FY numbers
• Est. 9 Apr 21 Barclaycard Consumer Spending (March)
• 13 Apr 21 Just Eat Q1 numbers
• 13 Apr 21 Revolution Bar Group H1 numbers
• 15 Apr 21 Deliveroo Q1 numbers
• 15 Apr 21 Pepsi Q1 numbers
• 15 Apr 21 Naked Wines FY trading update
• 15 Apr 21 Heavitree Brewery AGM
• 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
• 29 Apr 21 Molson Coors Q1 numbers
• 29 Apr 21 Texas Roadhouse Q1 numbers
• 30 Apr 21 Safestay General Meeting
• 4 May 21 Campari Q1 numbers
• 5 May 21 Ten Entertainment AGM
• 6 May 21 Bank of England MPC meeting
• 7 May 21 Intercontinental Hotels Q1 numbers
• Est 9 May 21 Barclaycard Consumer Spending (Apr)
• 10 May 21 Marriott Q1 numbers
• 12 May 21 Compass Group H1 numbers
• 12 May 21 Stock Spirits H1 numbers
• 12 May 21 TUI H1 numbers
• 12 May 21 Just Eat AGM
• 18 May 21 Britvic H1 numbers
• 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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