Langton Capital – 2021-06-15 – Langton ‘in-trade’, 21 June delay, labour, rent, Vianet, OTB etc.:
Langton ‘in-trade’, 21 June delay, labour, rent, Vianet, OTB etc.:
A DAY IN THE LIFE:
Langton discusses its recent holiday (and its experiences with the Food & Bev industry thereon) below and, by way of introduction, let’s drop into the narrative that we had dinner at Chancellor Rishi Sunak’s table in one of the pubs in the nice little village of Osmotherley, which is to be found in his Richmond constituency.
But perhaps we should qualify that statement.
We did indeed have dinner at ‘his’ table. But only two days after he did and, on the evening that he ate there, we just had a few drinks at the other end of the pub where we were eyed suspiciously by two gents who I thought at the time were a romantically involved couple whose relationship had hit a rocky patch such that they both felt they needed to ogle everyone else in the establishment. They were probably packing shooters.
And, I kid you not, the table next to us had a major swoon (‘I must text my son, he absolutely adores Rishi’) and then doubled up with another table to work themselves into a frenzy that concluded ‘he’s so intelligent and young and rich and good looking’.
We just scowled a bit and ordered another pint before which, naturally, I’d thought they were talking about me. Except for the young bit. And the rich bit. And the rest so not actually me at all. On to the news:
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LANGTON OUT ‘IN TRADE’:
Recently back from its hols, one week in a cottage in Osmotherley, Langton interacted (or tried to interact) with over 40 food, drink, coffee and iced cream vendors’ establishments. Most were open, some weren’t and the service levels were, to say the least, very variable. See premium email.
PUBS & RESTAURANTS:
21 June delay:
• As widely expected (the Speaker of the House, Sir Lindsay Hoyle, complained that the House is being bypassed in favour of the Press), PM Boris Johnson has delayed the removal of further restrictions due on 21 June. Restrictions will be lifted on 19 July. Mr Johnson said the first date was a ‘not-before’ date and the 19 July is a ‘terminus’ date. The limit on wedding guest numbers will be removed – but venues will still have to adhere to other rules – and 40,000 people will be allowed into Wembley to watch the Euro 2020 semi-finals and final. Wimbledon will go ahead with full capacity crowds for both finals. Mr Johnson says “We’re not going backwards. To businesses being asked to wait another four weeks I would say the June 21 date was always a not-before date. I’m confident July 19 will be a terminus date.”
• The trade has responded with frustration and disappointment. UKH says ‘the decision to delay is hugely disappointing but the Government has judged the evidence and acted as it sees fit. It does, however, jeopardise the return on investment that the Government has afforded hospitality and it’s crucial that further support is announced to push us over the line.’ It calls for more support. The British Beer & Pub Association sayd that the ‘delay in the roadmap for full reopening will cost pubs £400 million for this period alone. £100 million per week of closure.’ It adds that ‘a full package of Government support is now critical for our sector until it is guaranteed to open fully without any restrictions.’
• On a similar note, the BII says that ‘every day of critical summer trading lost for pubs is a step closer to business failure.’ It says that ‘the Prime Minister’s announcement today has delivered yet another devastating blow for our nations’ fragile and debt-laden pubs.’ The BII is calling for ‘full business rate cancellation until April 22 for England, in line with the other devolved nations, further extension of the VAT cut at 5% until next year, a targeted duty cut on draught beer served in pubs, and formal postponement of any form of Government debt, including Bounce Back & CBILS loans, as well as VAT payments.’
• Amy Lamé, London’s Night Czar comments ‘the delay to restrictions being eased is a real blow to many businesses and London’s night time economy.’ She adds ‘we are in danger of losing countless businesses, jobs and livelihoods so it’s absolutely essential that the Government provides urgent comprehensive financial support to help them through this further period of uncertainty. The sector needs to be supported so that they will be able to open their doors again when it is safe to do so.’ The BBC points out that indoor dancing is once again prohibited. It quotes one club owner as saying ‘he had been closed since March last year and had a full diary of events planned over the next few weeks, which he’ll now have to cancel, losing thousands of pounds in revenue.’
• Yesterday, ahead of the formal announcement, the Society of Independent Brewers’ (SIBA) National Chairman, Roy Allkin, said ‘It is important to be guided by ‘data and not dates’ – and the data shows the roadmap to reopening can safely continue as planned and the hospitality industry has consistently shown it can operate safely for the protection of both customers and staff.’ Industry groups claim that delaying lockdown could cost the wider UK hospitality industry £3bn as capacity limits will remain in pubs and cinemas and nightclubs will stay shut.
• Ahead of the formal announcement yesterday, the Night Time Industries Association said that half of the operators it surveyed would not survive if they had to be closed for a further two months and 20% said they will lose more than £10,000 a week in revenue either open with restrictions in place for closed as a result of the delay to ‘freedom day’ on Monday 21 June. The NTIA said ‘night-time economy businesses have waited patiently for their opportunity to open for more than 15 months, many have not survived, some are on a financial cliff edge, hundreds of thousands of jobs have been lost, a huge pool of talent has been swept away and others have been left to suffer extreme financial hardship.’
• Langton comment: See premium email.
Staffing & labour:
• The Caterer reports ‘some restaurants are still unable to open and others are having to reduce opening hours and menu sizes due to a lack of staff.’
• Langton comment: See premium email.
• The Telegraph reports that ministers are weighing up some sort of hospitality rescue ‘over billions in unpaid rent’. Langton comment: See premium email.
Other Covid news:
• UKHospitality Scotland says the Scottish govt must consider further financial support for the industry if it does not stick to its Strategic Framework in moving to Level 0 by 28 June. Executive Director of UKHospitality Scotland Leon Thompson said ‘Hospitality businesses may look busy, but most continue to trade at a loss adding to the debt burden built up over 15 months of closure and restricted opening.’
Company & other news:
• Vianet Group has reported full year numbers saying that it has turned in a ‘resilient financial performance in a challenging period with a solid platform to support growth.’ Langton comment: See premium email.
• Sushi chain Yo! Sushi is to change its name to The Snowfox Group to reflect the growing dominance of its US operation, reports Sky News. Sky says the group is considering an IPO.
• The president of Brown-Forman, Lawson Whiting, estimates that the 25% EU tariff on American whiskies is costing the Jack Daniel’s producer $70m a year in lost sales.
• Big Hospitality reports that the former Dinerama site in Shoreditch is to be reopened as LALALAND – a ‘lush garden of food, drink and rendezvous set in the urban scape of East London’. The site says it will offer one of London’s most ‘versatile and vibrant’ private event spaces.
• Meatless Farm, a plant-based burger and sausage maker, has launched a £5m crowdfunding programme. Morten Toft Bech, founder of Meatless Farm, said ‘We could reduce around 8% of the UK’s total emissions if we all ate just one less meat meal per week.’
• The New Zealand wine vintage is down by 19% yoy, but the quality has been described as ‘exceptional’.
HOTELS & LEISURE TRAVEL:
• On the Beach Group has reported H1 numbers to end-March saying that the group is ‘well-placed to capitalise on structural changes in the online travel market post covid-19.’ Langton comment: See premium email.
• Per TTG, Tui has increased its UK offering this summer by adding hundreds of excursions, activities and attraction tickets to its domestic experiences programme.
• Due to ‘ongoing uncertainty’ Tui has cancelled a range of holidays until July 11, with the company saying ‘We are constantly reviewing our holiday programme and cancellations in line with the government updates every three weeks, with the next update expected on 24 June.’
• PE house CVC Capital Partners is reported to have taken a £250m majority stake in UK holiday park operator Away Resorts. The company runs nine parks in UK holiday destinations.
• The EU has signed off on a proposal for a digital Covid certificate, which will show the holder’s vaccination record, test result or immunity from prior infection.
• The Airport Operators Association (AOA) claims that UK airports look set to lose £2.6bn this summer due to an ‘overly cautious approach to reopening international travel’.
• Pragma Consulting examines how train stations will need to adapt their commercial space, stating that commuters are likely to become a smaller proportion of overall passenger numbers, while leisure passengers become more important.
• US data from ‘Destination Analyst’ shows that 43.5% of American travellers personally feel that the pandemic is effectively over and a pandemic record high of 82.8% say that they are in a travel ready state-of-mind. Nearly three-in-ten Americans expect to change their lifestyles, finding a healthier work/life balance, spending more time with family, being more mindful of self-care and spending more time with friends.
FINANCE & MARKETS:
• Sterling mixed at $1.411 and €1.1634. Oil higher at $73.11. UK 10yr gilt yield up 3bps at 0.74%. World markets mixed but London set to open around 13pts higher.
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 8 Jun 21 DP Eurasia AGM
• 9 Jun 21 SSP H1 numbers
• Est 9 Jun 21 Barclaycard Consumer Spending report
• 10 Jun 21 Compoir FY numbers
• 15 Jun 21 Vianet full year numbers
• 15 Jun 21 On the Beach H1 numbers
• 17 Jun 21 Whitbread AGM & Q1 trading update
• 22 Jun 21 Coca Cola HBC AGM
• 24 Jun 21 Bank of England MPC meeting
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• 5 Aug 21 Bank of England MPC meeting
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