Langton Capital – 2021-06-03 – Early Covid pandemic tweets from the archive
Early Covid pandemic tweets from the archive
A DAY IN THE LIFE:
Langton is on half-term hols this week and we’ve organised the weather nicely.
Just Yorkshire but hey, that’ll do. Pubs, walks and more pubs, what’s not to like?
We’ll try to get a stub of an email out and intend to be active on Twitter. Back properly on 7 June.
IN THE NEWS:
• Langton’s staycation is illustrating a number of issues from inflation through to staff shortages, the variability of service and other problems. More next week.
• S4 Labour says ‘as the U.K. recorded it’s hottest May Bank holiday last weekend, hospitality experienced a significant 63% jump in like for like sales, comparing the Saturday to Monday with the same Bank holiday weekend in 2019.’ We would caution, as always, that this only covers units that are reopened, it is a short time period and is very weather dependent.
• With news mixed we would suggest that staffing will be an issue (i.e. a problem) in the coming months.
• JD Wetherspoon boss Tim Martin has denied that his pubs are facing a staff shortage caused by Brexit. The Telegraph yesterday quoted him as saying ‘the UK has a low birth rate. A reasonably liberal immigration system controlled by those we have elected, as distinct from the EU system, would be a plus for the economy and the country.’ In a later RNS, the company said its chairman was not lobbying government for easier visas saying ‘Mr Martin has had no contact whatsoever with Mr Johnson since he became Prime Minister’. It says Mr Martin has supported the idea of ‘preferential visas for countries in close proximity to the UK.’ Mr Martin says that he has not changed his stance on immigration.
• The BBC reports UKH as saying ‘hospitality venues are struggling to fill thousands of job vacancies.’
• These are on the up. There could be some selling of capital stakes. Sky reports that ‘Park Holidays, which is owned by the investment firm Intermediate Capital Group has appointed bankers to oversee a strategic review that industry sources expect to trigger an auction later this year.’
• Mintel argues that the traffic light system has dampened demand for overseas holidays and is boosting staycation demand.
FROM THE ARCHIVE:
Listening to the highlights of Dominic Cummings’ excoriation of everything not Dominic Cummings last week brought back to mind the early days of the pandemic.
Remember the heavily guarded buses of travellers returning from China, the shunned cruise ships and then the ‘don’t go to work but go to work but don’t go to work’ advice?
And then the ‘don’t go to the pub…shut the pubs…stay at home’ series of comments?
Although we poked fun at the overuse of the word ‘unprecedented’, these were unprecedented times.
And then the loo-roll panic, the PPE, testing etc. Weird times & we all lived through them.
Herewith, some of our early Tweets. They’re unedited and hopefully give an idea of the struggle to get through uncharted waters. They’re under a few headings, Questions, Observations, Dilemmas & sundry. We’ve left them in date order as that seems to make more sense. Some more tomorrow.
Tuesday 7 April 2020:
• Covid ££ side effects #36. China likely to buy assets? Sovereign wealth funds (in the Middle East, China & Norway) may be instrumental in re-financings (aka pick up assets cheap). Restaurants will still be there, but the capital won’t. And who’s got it? China.
• Covid ££ side effects #37. Commuters who had been spending £20 per week on coffee might conclude that they never really needed it. Will we go back immediately to our old way of life? Probably not in the very short term.
• COVID Qs #12. Coming out of this will suburban & residential hospitality sites outperform city centres & enclosed spaces? Beer gardens may fill before crowded bars (though the younger customer base may help mitigate this).
Wednesday 8 April 2020:
• Covid ££ side effects #38. No rocket science here but some changes will be long-lasting or permanent. More supermarket delivery, a second freezer in the garage, a ‘pandemic pantry’ long on baked beans, beer & pasta etc.
• Covid ££ side effects #39. Move to ban the word ‘unprecedented’ gets unexpected (not to say unprecedented) boost as commentators seek to wear the tiresome, five-syllable word out. Gob-smacking making a spirited comeback in many areas.
Thurs 9 Apr 2020:
• COVID Qs #13. Re panic recognition. What is that disturbing flutter in your guts, vague worry, tight chest? Is it the all-engulfing pandemic or is it the realisation you’ve only got 8 bottles of beer left & there’s sunshine & a long weekend coming up?
• Covid ££ side effects #40. Recognition of fragility. Whether it’s business models, government, rule of law etc. Bit of a gob-smacker. We’re microscopic bugs on a piece of rock spinning round a third-rate star at 1,000mph. But we’re in control, huh?
Tues 14 April 2020:
• Covid ££ side effects #41. Permanent kick in the teeth for property? Working from home, no shops, pubs, restaurants, can’t use 2nd homes etc. etc. Not likely, in the short term at least, to put upward price pressure on property.
• Covid ££ side effects #42. Disaster recovery plans to be taken more seriously, less smirking at the Swiss? Many things are OK until they are really, really not. Even playing with a tiger. Companies need more fat on the bone, hence skipping dividends, issuing new equity etc.
• Covid ££ side effects #43. Might we be grateful for what we’ve got? Pubs, beer gardens, the odd pizza, o/seas holidays? Granddad B left UK only once. Out in 1915 (vertical) & back 1917 (horizontal) & that’s it. Happy with 2pts a mild a week, more food & fewer bullets thereafter
Weds 15 April 2020:
• Covid ££ side effects #44. Might intergenerational unfairness get addressed? Lockdown costing tomorrow’s taxpayers (the young) c£50bn a month. We need to protect the old but triple-lock pensions, index-linked retirement benefits etc.? May need to be dumped.
• Covid ££ side effects #45. Could bluffers & soundbite merchants be exposed as baseless? You may win arguments, popular votes but try using a soundbite on a baby that needs its nappy changing. See how that works. Then try to bluff a virus. Good luck with that one.
• Outing the bluffers. Dealing with a virus (1/2). You don’t exist. You’re tiny, so tiny. We don’t need experts. Exponential? Remind me. We have PPE. You have PPE. What’s PPE? Loads. Billions. You have got it. Bin bags, elastic bands. Plucky, British. NHS. Care homes?
• Covid ££ side effects #46. Could Covid-19, the economic reset 5-10yrs back, sky-high gov. & corp. debt & no dividends ring the death knell for final salary pensions? Sure, they’re contracted. But you could contract to grow bananas on the moon, doesn’t mean it’s always possible
• Covid ££ side effects #47. Will corporate bondholders exercise their right to overturn the apple cart? M&B has a covenant waiver for one such measure. Most companies should be OK for the March calculations. The June measures won’t be met, will need waiving.
Thurs 16 Apr 2020:
• Covid ££ side effects #48. Will we see a permanent move to cashless transactions, even when the immediate need for a low-touch solution has passed? Probably, yes. Hopefully plastic screens, beer dispensed from a distance via a hosepipe etc. won’t be necessary.
• Covid ££ side effects #49. Will rents need to be permanently lower? Depends on who you ask. Tenants very much say yes. Or at least, they should be tied to revenues or some measure of economic reality.
• How do you pass a company off as a ‘Going Concern’ when it either patently isn’t or you don’t have a clue? Do you, a) ponder it long & hard and address the underlying problem? Or do you b) relax the reporting timetable & address the issue tomorrow? No hints but I’m going for B.
• Covid ££ side effects #50. How will it be, attracting capital into this industry going forward? We can’t say that Black Swans don’t exist because we’re being bitten by one right now. Will investors need higher returns? And how’s that going to work?
• Covid ££ side effects #51. If investors need a bigger risk premium, will rents need to fall? Because there’s not going to be enough left in the till for everyone to have what they want. Either that or prices will need to rise. And customers won’t like that.
Fri 17 Apr 2020:
• Lockdown dilemma. Tomorrow, do you a) get up early, go for a jog, cut grass, plunge septic tank, have a shower & grin, smugly for rest of the day? Or b) not do any of that. Have a beer, spark up the barbie, have another beer, a third & conclude it’s unsafe to operate machinery?
• Lockdown dilemma. How do you stop the guinea pig from squeaking when you’re on an important Skype call? Do you a) give the thing a stern talking to or b) pretend you’re on a squeaky bicycle and that the rest of the world is foolish for being out of step?
• Lockdown question for you. Do you a) think you will have more unfinished jobs around the house & garden at the end of this lockdown than you did at the beginning or b) are you a hopelessly optimistic idiot?
• Lockdown dilemma. Your accounts are due in to the FCA on 24 April. Do you a) schedule 20 working hours, crack the thing, punch the sky & shout yeah! Or b) train for a job in the circus by swinging on your chair for 2hrs watching the bird-feeder action out the window?
• Lockdown dilemma. Do you a) use this time to source a better electricity provider because your current one is an utter, utter bar steward? Or b) break the morning into 5 min slots, bet on when the binmen will arrive, model it on Excel, Zoom your mates & get a sweepstake going?
• COVID Qs #14: Will there be a ‘defiance bounce’ in spending when the lockdown comes off? Will a bunch of ruddy-faced gammons leg it down the pub to hug and kiss against doctors’ orders or will it be a slow, cautious build back to what we used to call normal?