Young’s, trading, confidence, R-rate, Comptoir, traffic lights, CCL etc.:

A DAY IN THE LIFE:

Langton was ‘in trade’ yesterday afternoon and evening.

That is to say, we went down the pub and very nice it was too – particularly as, given that the storm clouds were as fast-moving yesterday as they’ve been all week, being indoors was a legal option.

Still, paying £6.50 a pint, table service mandated, in order to conduct research is somewhat costly and can it have other effects such as sleeping through your alarm.

Or, more accurately, not sleeping through it but promising yourself another five minutes that turns, somehow, into thirty.

Anyway, no real harm done. It’s Friday, after all and the intro’s a bit shorter than usual but here’s something for you from Gustave le Bon, writing about populist leaders as long ago as 1895.

Such leaders, he says, ‘are especially recruited from the ranks of those morbidly nervous, excitable, half-deranged persons who are bordering on madness.’

Certain swivel-eyed loons familiar to our TV screens come to mind but look on the bright side, what could possibly go wrong? On to the news and have a good weekend.

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YOUNG & CO – FULL YEAR WEBINAR:

Following the release of its FY numbers yesterday morning, Young & Co hosted a webinar for analysts and our comments thereon are set out below.

Headline numbers:

• The historic numbers are not very meaningful. See earlier email. The impact of Covid has been varied. Central London and City sites saw revenue down by around 60%, other units were much less impacted.

Company & Langton comments: See premium email.

PUBS & RESTAURANTS:

Current trading and 21 June:

• Commenting admittedly on only one days’ trading, CGA reports that ‘sales at Britain’s restaurants, pubs and bars were up by a quarter on pre-COVID levels as consumers returned with enthusiasm for the first day of inside service on Monday (17 May).’ It says ‘reopened managed venues’ average sales were 24.9% higher than on the equivalent Monday in May 2019. Food sales jumped 29.6% as consumers took advantage of the opportunity to eat inside again for the first time this year in England and Wales, while drinks sales were up by 21.2%.’ CGA had already commented on outdoor trading, saying that the first two weeks were good but, as the weather worsened, the last three weeks of outside trading were ‘more difficult’.

• CGA makes the good point that, with only around a third of units open for outside trading, for the majority of hospitality sites (if not operators), this has been the first near-normal week of trading this year. CGA says ‘consumers have been waiting a very long time to get back inside restaurants, pubs and bars, and Monday’s trading was a sign of how much Britain’s hospitality industry has been missed. Venues still face some tough restrictions, and in the case of late night bars, nightclubs and venues with limited space, remain closed completely. But after a very difficult start to 2021, Monday was a very welcome step on the roadmap to recovery, however, there is still a long way to go and continued support for the sector will be necessary.’

• The report includes a comment from UKH, which adds ‘these numbers are a welcome reminder that the sector is much-loved by its customers and Monday was the first time many venues had opened since December – five long, hard months with no revenue.  As we’ve seen previously, we often see a reopening bounce in sales, followed by a dip, so we hope these positive figures continue in the coming weeks. It is critical that Government restores consumer confidence in hospitality and restores our ability to trade profitably by removing all restrictions on June 21st as planned – let’s not forget that all of these businesses which are open are still making a loss until they do.’ The BBPA adds ‘this is an encouraging first day back for trade inside our pubs, but there is long way to go yet, and the coming months are critical. Continued support from pub goers by visiting their local, as well as
the full removal of restrictions in pubs, are vital if pubs are to survive heading out of the pandemic and after more than a year of enforced closure or crippling restrictions.”

• Langton comment: See premium email

• 21 June. A consistent request from trade operators and trade bodies has been for clarity on the 21 June removal of social distancing, the ban on drinking at the bar etc. Here, one must have some sympathy for the authorities as it isn’t possible to provide clarity as, as Professor Van Tam has pointed out, we are in a race between the variants and the vaccine rollout, and it is not clear just how that will play out. The government will only provide clarity on 21 June on the Monday before, 14 June. That is a short lead-time (as more staff and product will have to be sourced) but is maybe the best that can be hoped for.

Confidence:

• GfK has updated on consumer confidence in the UK saying it has now regained all of the ground lost to the pandemic. It says it ‘long-running Consumer Confidence Index increased six points to minus 9 in May. Three measures were up in comparison to the April 23rd announcement, one measure was down and one was flat.’ GfK goes on to say ‘the financial mood of the nation has bounced back to its pre-lockdown figure of minus 9 this month, meaning confidence has made up all the ground lost to COVID-19. UK consumer confidence is being driven by continued optimism for our future personal finances and for the wider UK economy in the next 12 months.’

• Langton comment: See premium email

R Rate:

• The NIESR has updated on the R-rate in the UK saying they believe it is between 0.90 and 1.05 in England (as at 14 May). Northern Ireland is a shade below England. Wales is a shade higher and Scotland is more notably higher at between 1.15 and 1.30. The NIESR says that, on its numbers, deaths should be below 25 per day by the time all restrictions are lifted (if the date remains fixed) on 21 June. The NIESR cautions ‘localised outbreaks have the potential to seed a new wave. The extent to which these flare ups are contained will be key in the weeks ahead.’

Company and other news:

• Black Box in the US says that ‘looking ahead, we see optimism for faster sales recovery positive sales growth versus 2019.’ It says that the US restaurant industry recorded stronger sales in April for the second consecutive month versus the same period of 2019. Black Box reports LfL sales growth was 6.8% on a two-year basis in April up from +2.3% two-year growth reported for March. The rise is due to higher spend per head. Black Box says ‘traffic has not recovered.’

• Comptoir Group has updated on trading to say that ‘on Monday 17th May, all 21 company owned and 3 franchise managed sites have now reopened to trade.’ It adds ‘all appropriate measures are in place to ensure government guidelines concerning social distancing and customer safety are fully adhered to’ but does not give any numbers.

• Hard Rock Cafe is to open a franchised site in Newcastle today.

• Pret is to open outlets in petrol stations via a new partnership with Motor Fuel Company, which has around 900 sites.

• The price of carrier bags in English shops rises to 10p today.

• Chancellor Rishi Sunak has said that the government will not resurrect Eat Out to Help Out per the Daily Mail. He says he is still proud of the scheme (but not enough to bring it back and despite some claims that it helped spread Covid-19).

• UKH Scotland has commented that it looks forward to working with Kate Forbes MSP, Cabinet Secretary for Finance and the Economy and Ivan McKee MSP, Minister for Business, Trade, Tourism and Enterprise ‘to ensure ongoing support to bring hospitality businesses through the pandemic, and to create a policy and regulatory landscape that enables businesses to thrive once more.’ UKH Scotland adds that, pre-pandemic, hospitality was Scotland’s third largest employer and says ‘the key priority for hospitality businesses right now is that the country be able to move down through the levels in the strategic framework as planned, avoiding late notice of setbacks and changes and where changes are necessary, adequate financial support is provided to all hospitality businesses that are impacted.’

• More office-based working? Rightmove has said that demand for accommodation in city centre apartments is rising and it puts this down to a return to work by office workers. Rightmove says interest in city centre housing has risen by 35 per cent, compared with a 32 per cent increase in demand for housing in villages.

• PE houses Granite Creek Capital and Clover Capital have invested in Big Easy Blends, which retails single-serve pouched beverages, both alcoholic and non-alcoholic.

HOTELS & LEISURE TRAVEL:

• Amber list slightly clearer than mud. Matt Hancock has said that at least he is clear that people should not travel to amber list countries other than for emergency reasons. They should not go on holiday. Hancock said ‘you should not go to an amber or red list country on holiday.’ Earlier, George Eustice seemed to suggest that you could validly travel just to see friends.

• There will be an initial review of the green list on 7 June. Comments suggest few nations, if any, will be added. There will be a wider review on 28 June.

• Test provider Halo has launched saliva-based tests costing £89. The company says ‘with our new Day 2 and 8 test service, we will provide British travellers with a painless, safe, reliable and cost-effective way to approach travel.’

• Carnival has announced that its brands are ‘expected to return to service in the United States starting in July with Alaska sailings departing directly from Seattle.’ Princess Cruises will resume operations in Alaska starting July 25 through September 26. Holland America Line will resume its cruise operations to Alaska with seven-day itineraries aboard Nieuw Amsterdam and Carnival Cruise Line ‘has already opened Alaska sailings departing from Seattle beginning July 27, with weekly departures through September 14 aboard Carnival Miracle.’

• Reuters reports a survey undertaken by the Edelman Trust Barometer that shows that 65% of respondents are ‘still in a pandemic mindset’.

• Park Holidays is to buy nine sites from rival Bridge Leisure.

• Morning Consult (in the US) has undertaken a survey and concluded that urban hotels ‘could take years’ to recover from the Covid-19 pandemic. The report says ‘the economic devastation facing urban markets, which rely heavily on business from events and group meetings, underscoring the need for targeted relief from Congress.’

• STR reports that US weekly hotel occupancy reached its second-highest level since the start of the pandemic in the week to 15 May. Occupancy was 59.1% (down 16.4% on 2019) with rates some 15.4% lower than two years ago and REVPAR some 29% lower.

• Topdeck Travel has said that Gen Z consumers are keen to travel. As, indeed, are most other demographics. Topdeck says ‘it has been a disheartening year for young people, but our findings show they are resilient and are ready to bounce back with new travel experiences.’

• Butlins sites along with hotels in general across the UK are once again open for business.

• Shares in Trainline have fallen sharply on news that the government is to set up Great British Railways. GBR will sell tickets direct to the public.

FINANCE & MARKETS:

• Sterling stronger at $1.4186 and €1.1591. Oil lower at $65.22 and UK 10yr gilt yield unchanged at 0.84%. Markets broadly better yesterday with London set to open just a couple of points higher.

RETAIL WITH NICK BUBB:

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TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 17 May 21 Hollywood Bowl H1 numbers

• 18 May 21 Britvic H1 numbers

• 18 May 21 Escape Hunt FY numbers

• 18 May 21 DP Eurasia trading update

• 19 May 21 Marston’s H1 numbers

• 19 May 21 Premier Foods FY numbers

• Est 19 May 21 M&B H1 numbers

• 19 May 21 UK ONS inflation data

• 20 May 21 Young & Co FY numbers

• 20 May 21 Fevertree AGM

• 20 May 21 888 AGM

• 21 May 21 GfK consumer confidence numbers

• 25 May 21 Restaurant Group AGM

• 25 May 21 Shaftesbury H1 numbers

• 26 May 21 C&C FY numbers

• 26 May 21 Playtech AGM

• 3 Jun 21 New River full year numbers

• 8 Jun 21 DP Eurasia AGM

• Est 13 Jun 21 Barclaycard Consumer Spending report

• 15 Jun 21 Vianet full year numbers

• 22 Jun 21 Coca Cola HBC AGM

• 24 Jun 21 Bank of England MPC meeting

• 13 Jul 21 Pepsi Q2 numbers

• 23 Jul 21 Premier Foods Q1 update

• 27 Jul 21 Campari H1 numbers

• 27 Jul 21 Games Workshop FY numbers

• 3 Aug 21 Domino’s Pizza 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

• 19 Aug 21 Rank FY 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.