Fuller’s, Deliveroo, JDW, Jet2, Entain, masks, staffing issues etc.:

A DAY IN THE LIFE:

Bit of a rush this morning, what with the football and a hatful of company results. On to the news:

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FULLER, SMITH & TURNER – FY NUMBERS:

Fuller’s has this morning reported full year numbers to end-March and our comments thereon are set out below:

The numbers:

• Fuller’s says it has turned in a ‘resilient performance in an extraordinary year that started and ended with our entire pub estate closed, and with social distancing restrictions for 16 months to date’. See premium email

JD WETHERSPOON – FY TRADING UPDATE -CONFERENCE CALL:

JD Wetherspoon hosted a conference call post its full year trading update and our selective comments thereon are set out in the premium email.

PUBS & RESTAURANTS:

Isolation, track & trace, lost workers etc.

• There are a series of estimates pointing in the same direction but giving somewhat different numbers (depending on assumptions). As many as 1.4m Brits per week could be ‘pinged’ by track and trace to stay at home this summer, as forecasts predict as many as 100,000 positive cases per day. The Daily Mail stretches to an even more debilitating 3.5m people pinged and told to leave the workforce each week. The Delta variant is thought to have an unrestricted (i.e. open economy, no countermeasures) R rate of around seven. In addition, each covid case is said to result in an average of one additional individual forced to self-isolate per week. Javid has said that from August 16, double-jabbed Brits would not need to isolate as long as tests come back negative.

• A few examples. Different time periods & assumptions – but it adds up to a sizeable problem, especially for industries employing younger workers. UKHospitality estimates that up to one third of the hospitality workforce could be off work self-isolating. Kate Nicholls, CEO of UKHospitality, said 60% of hospitality staff are aged between 15 to 34 and so will not be double-jabbed by 16 August.

• Per the Guardian, two million people could contract Covid this summer, potentially meaning up to 10 million must isolate in just six weeks. This is not a crazy number given estimates as widely separated as those in the Financial Times (2m per week) and The Daily Mail (3.5m per week). Health minister Sajid Javid said England is set to enter ‘unchartered territory’ as restrictions ease. Per the Sun, members of the public are deleting the track and trace app in ‘droves’ amid warnings that millions will have to self-isolate. The Sun reports that up to 3.5 million Brits are expected to be stuck in self isolation by early August if 100k cases per day is reached.

• Meanwhile, demand for staff is rising sharply per KPMG and the Recruitment and Employment Confederation. The firms find the rate of recruitment is growing at the fastest rate since 1997. KPMG says ‘June’s data confirms that momentum in the jobs market continues to surge, with improved business confidence leading to record high recruitment activity.’ It adds ‘for the fourth month running we’re seeing a decline in the availability of candidates to fill all these new roles and the most severe deterioration for 24 years. We need action from businesses and government to re-skill and up-skill furloughed and prospective workers now more than ever.’

Mask wearing:

• Mask wearing. In the recent past (and, indeed, now) there has been no choice in the matter but, as there will be choice involved post 19 July, there is immediately disagreement. It could help revenues if a pub once again feels like a pub but, it has to be conceded, some customers may feel differently.

• Further comment. See premium email

Company & other news:

• Deliveroo has updated on Q2 trading saying that it has been ‘ahead of expectations’ and the group is increasing its growth guidance for the full year.  Gross transaction value is up 76% in Q2 to £1.74bn. Deliveroo says that ‘orders grew 88% year on year at the group level to 78m in the second quarter of 2021. In the same period orders in the UK and Ireland grew 94% year on year to 38m and orders in the Group’s international segment grew 83% year-on-year to 40m.’

• Deliveroo says it has ‘seen continued strong growth and consumer engagement in H1, and as a result of that plus increased expectations for H2 is increasing the guidance for full year annual GTV growth from between 30% to 40% to between 50% to 60%.’ The company says it ‘sees an opportunity to make further discretionary investments into growth opportunities in the second half, and as a result of accelerating these investments in H2, along with an expectation that AOV reverts towards pre-COVID levels, we are confirming our full year gross profit margin guidance (as a % of GTV) and expect it to be in the lower half of our previously communicated range.’ The group will be reporting its H1 2021 results on August 11th.

• England is through to its first major final in 55yrs. The match, to be played on Sunday, should boost income for wet-led pubs.

• Licensing laws will be relaxed for Sunday in case the Euro final goes to extra time and penalties.

• JD Wetherspoon shares closed down nearly 2% (24p) yesterday in a market up 0.6%. The shares were just giving back a little of their recent gains as they had risen almost £1 since the beginning of this month. The pubs have seen sales slip over the period of the Euro football tournament. The Times points out that JDW had two share placings last year and that chairman Tim Martin sold shares totalling £60m in January 2021 (£50m) and December 2020 (£5m) and July 2020 (£5m). It says that Mr Martin’s share of the company has thus fallen from 32% to 25% but adds that he has no plans to retire.

• Staff shortages. The government is temporarily extending the hours HGV drivers can work from nine hours to 10 hours. The limit was originally put in place as a safety measure. It has been relaxed in order to partly compensate for the c100,000 shortfall in drivers. The Road Haulage Association has said the move wouldn’t make any difference. Union Unite has said that any driver who feels too tired to drive safely has a legal right to refuse to do so. Perhaps even an obligation.

• Deliveroo will create 400 new ‘high-skilled’ jobs over the next year in areas such as software engineering, data science, and designing. The firm said the aim was to work on a range of innovations that would help improve the app experience for restaurants, riders, and customers on the platform.

• Brewdog’s advert for its hard seltzer brand, Clean & Press, has been banned by an advertising watchdog for its purportedly misleading health claims. A spokesman for BrewDog said ‘We have accepted the ASA ruling and have removed the wording in question.’

• Further comment. See premium email

• Arena Events Group reports revenues down more than 50% over the past year to £71.6m, compared to the previous period’s £160.6m. Greg Lawless, CEO of Arena Events Group,said ‘We are cautiously optimistic about the pace of recovery in the live events industry, which has started later than we would have liked as Covid-19 restrictions have returned in some countries and remained in place in others longer than anticipated.’

• GrubHub in the US is to use self-driving vehicles for robot delivery of meals on college campuses.

• Wine Australia reports the country’s grape crush is up 31% on last year, making it the largest on record. Vine growers across Australia have reportedly harvested 2.03 million tonnes of wine grapes this year thanks to a near perfect ‘unicorn’ season.

JET2 – FULL YEAR NUMBERS:

• Jet2 has reported full year numbers saying that, ‘in what has proven to be a period of unparalleled operational and financial challenges, the Group made a loss before FX revaluation and taxation from continuing operations of £373.8m (2020: pre-exceptional profit before FX revaluation and taxation from continuing operations of £264.2m).’

• The group says that, during Covid (and now) it has worked to minimise cash burn. It says ‘our year end liquidity position remained strong with a total cash balance of £1,379.0m, (2020: £1,387.5m), a decrease of 1% and an ‘Own Cash’ position of £1,061.7m (2020: £520.4m), an increase of 104%.’

• The company points out that ‘extensive international travel restrictions meant our aircraft were fully grounded for approximately 29 weeks of the financial year and operated a significantly reduced programme when flying was permitted.’

• It says ‘we believe opportunities for financially strong, resilient and trusted operators will only increase. Bookings for Summer 22, for which package holiday bookings are displaying a materially higher mix of the total are encouraging and with the vaccination progress being made, we are optimistic that Summer 22 will be a considerable improvement on both Summer 20 and Summer 21.’

• The company says ‘we are confident that once normality returns, our Customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future, taking millions of UK holidaymakers annually, to the Mediterranean, the Canary Islands and to European Leisure Cities and that Jet2 plc will emerge from this crisis an even stronger company.’

HOTELS & LEISURE TRAVEL:

• The government is to allow fully vaccinated travellers to avoid quarantine rules from later this month. Transport Secretary Grant Shapps will formalise arrangements later. They will include, per press reports, the dropping of the requirement of double-jabbed passengers to self-isolate when returning from amber list countries. This will open up traditional holiday destinations such as France, Spain, Portugal and Italy.

• Club Med has said that it expects summer 2022 “will be the busiest season on record.”

• British Airways is selling over 35,000 seats on UK to UK flights at less than £50 each way.

• Salutaris People, a provider of PCR covid tests, has called for the continued wearing of masks by airline passengers after 19 July. Ben Paglia, managing director of Akea Life and a founder of Salutaris People, said ‘It is a very dangerous and reckless precedent to allow a plane full of passengers to travel without face masks or coverings. Allowing passengers to travel without wearing masks could potentially set us back to the start of the pandemic when all air travel was banned.’

• P&O Cruises’ new 40-night winter sun Caribbean cruise on Aurora sold out in six hours on its first day on sale, with the line saying that the reaction demonstrates the pent up demand for cruise travel. Paul Ludlow, president at P&O, said the reaction ‘clearly demonstrates the desire from our guests for international cruising.’

OTHER LEISURE:

• Entain has updated on H1 trading saying that it has seen a ‘strong performance across the Group with positive trends as markets continue to re-open.’ Total Group net gaming revenue is up 11% in H1 and up 42% in Q2. CEO Jette Nygaard-Andersen says ‘we have delivered another strong performance across the Group.  Our diversified business model has enabled us to grow our business in all key markets while navigating channel and product mix changes as retail re-opens and we annualise last year’s restricted sports calendar.’ The CEO says ‘following our strong first half, we are upgrading our expectations for the full year and we remain confident and excited by the breadth and scale of the long-term sustainable growth opportunities ahead of us.’

FINANCE & MARKETS:

• Chancellor Rishi Sunak has been warned that Britain’s debts could prove to be “unsustainable” if interest rates rise to curb inflation and if Covid measures do not stop at the end of the current fiscal year (end-March 2022). The OBR has also warned that commitments to carbon neutrality could push up debt by a further £469bn over the next 30 years.

• Further comment. See premium email

• The Halifax reports that house prices fell by 0.5% in June (month on month). External estimates had been for a rise of around 1% plus. One month does not make a trend but the Halifax says it was “important to put such a moderate decrease in context.”

• Further comment. See premium email

RETAIL WITH NICK BUBB:

• Nick is taking a well-earned break. He’s back on Monday.

TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 5 Jul 21 Markit Services PMI

• 7 Jul 21 JD Wetherspoon pre-close FY trading update

• 7 Jul 21 Ten Entertainment H1 trading update

• 8 Jul 21 Fuller’s FY numbers

• 8 Jul 21 Deliveroo H1 trading update

• 8 Jul 21 Jet2 FY numbers

• 8 Jul 21 Entain H1 trading update

• 13 Jul 21 Pepsi Q2 numbers

• 14 Jul 21 DP Eurasia H1 trading update

• 20 Jul 21 Young & Co AGM

• 21 Jul 21 Loungers FY numbers

• 21 Jul 21 Nichols H1 numbers

• 23 Jul 21 Premier Foods AGM & Q1 update

• 27 Jul 21 Campari H1 numbers

• 27 Jul 21 Games Workshop FY numbers

• 28 Jul 21 Marston’s Q3 trading update

• 30 Jul 21 DPP AGM

• 3 Aug 21 Domino’s Pizza H1 numbers

• 5 Aug 21 Bank of England MPC meeting

• 10 Aug 21 Intercontinental Hotels H1 numbers

• 11 Aug 21 Deliveroo H1

• 12 Aug 21 TUI Q3 numbers

• 18 Aug 21 Carlsberg H1 numbers

• 19 Aug 21 Rank FY numbers

• 2 Sept 21 Jet2 AGM

• 22 Sept 21 Ten Entertainment H1 numbers

• 1 Oct 21 JW Wetherspoon

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 26 Oct 21 Campari Q3 numbers

• 8 Dec 21 TUI FY numbers

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