M&B, Diageo, Compass, Everyman, AB InBev, McDonald’s, Uber etc.:

A DAY IN THE LIFE:

The number of out-of-office replies to our morning email is running at 3x normal levels and, rather than try to beat the holidaymakers in question, Langton will soon be joining them.

There won’t be an email next week or the week after as we jet, or rather drive, to the sunny climes of the Yorkshire Dales followed by the steamy environs of the Deep South (a.k.a. the Derbyshire Peak District).

We’ll be doing out bit, undertaking on-the-ground, staycation research. This will doubtless involve chatting up publicans, sampling beer, pies and chips and shovelling down ice-cream.

But we’re here for the remainder of the week and, come holiday-time, we’ll tweet the odd bit on @brumbymark. On to the news:

ADVERTISE WITH US:

Langton’s free email now carries adverts. See front page of website for today’s copy & contact us for further details.

CHANGED EMAIL FORMAT:

The Premium Email is unchanged. The Free Email is written and pre-sent the evening before. It may not include breaking stories nor Langton comment. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email.

Prices: £295 for one subscription, £495 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option:

HERE

MITCHELLS & BUTLERS – Q3 TRADING UPDATE:

Mitchells & Butlers has this morning updated on Q3 trading and our comments are set out below:

Headline comments:

• MAB says that sales comps are on a 2-year basis versus 2019 and also ‘include the benefit of the temporary reduction in the rate of VAT on food and non-alcoholic drink sales.’

• Total sales year to date, including 18 weeks of enforced closures, are at 35% of pre-Covid levels.

• Further comment – see premium email.

PUBS & RESTAURANTS:

The outlook:

• UKH CEO Kate Nicholls has told the MCA’s The Conversation that she believes the hospitality sector has a fundamental role to play in rebuilding communities, the economy and the health and wellbeing of the nation. But, she says, ‘we need government help to allow us to do that.’ She says ‘we now need to put the flesh on the bones for that but they give us two really strong hooks to go back and ask for the support we need because clearly this crisis has gone on for far longer than the government anticipated when they put in place the financial support measures for the sector.’

• Further comment – see premium email.

Company & other news:

• Diageo has reported full year numbers saying that it has ‘delivered strong net sales growth, particularly in North America, our largest market.’ it adds ‘reported net sales (£12.7 billion) increased 8.3%, with strong organic growth, partially offset by an adverse foreign exchange impact. Organic net sales growth of 16.0%, driven by growth across all regions and a benefit from lapping a reduction of inventory levels by our customers in fiscal 20.’

• Further comment – see premium email.

• Compass Group has updated on trading saying that Q3 has been a ‘further quarter of margin improvement – and first time outsourcing momentum continues’. The company says that group revenue was up by 36.4% in Q3 (against soft comps) and year to date revenue is down by 16.1%.

• Further comment – see premium email.

• Anheuser-Busch InBev has reported Q2 results saying that it saw ‘continued momentum in 2Q21 with top-line growth ahead of pre-pandemic levels.’ CEO Michel Doukeris says ‘the consistent execution of our commercial strategy – centred around winning brands, category development and digital transformation – delivered continued momentum in the second quarter with top-line growth 3.2% ahead of 2Q19 pre-pandemic levels, even in light of ongoing COVID-19 impacts. Looking forward, we will continue to build upon our customer- and consumer-first approach to drive growth and value creation.’

• AB InBev says volumes were up by 20.8% in Q2 saying ‘own beer volumes up by 20.5% and non-beer volumes up by 23.2%. In HY21, total volumes grew by 17.0% with own beer volumes up by 17.7% and non-beer volumes up by 12.6%.’ Total revenues were up by 27.6% with branded revenue outside of their home markets up by 19.3%. The company says ‘in 2Q21, combined revenues of our three global brands, Budweiser, Stella Artois and Corona, increased by 23.0% globally and by 19.3% outside of their respective home markets. In HY21, the combined revenues of our global brands increased by 26.2% globally and by 31.4% outside of their respective home markets.’

• Further comment – see premium email.

• UK car production has been hit by shortages of staff and semiconductors warns the SMMT.

• McDonald’s has reported Q2 numbers well ahead of forecasts. The company also raised its guidance for fiscal 2021, saying that the recovery was faster than it had anticipated. LfL sales, albeit against easy comps, rose by 40.5% in the second quarter and were higher than the same quarter in 2019. CEO Chris Kempczinski said that ‘people are venturing out and establishing new routines.’ The group’s shares were down 2.5% or so on the news.

• Further comment – see premium email.

• NewRiver has announced that CFO Mark Davies ‘will now relinquish his position as the Company’s Chief Financial Officer and stand down from the Board with immediate effect.’ Mr Davies is also CEO of Hawthorn Leisure and he will retain this role. Hawthorn’s sale to Admiral was completed earlier this week. NewRiver CEO Allan Lockhart says Mr Davies ‘has also been a driving force and visionary behind NewRiver’s pub strategy which began with us acquiring our first portfolio of 202 pubs from Marston’s in 2013, buying Hawthorn five years later and culminating in an agreed sale of our community pub business for £222.3 million this month. On behalf of everyone at NewRiver, we wish Mark the very best for the future and sincerely thank him for everything he has done for the business.’

• Pizza Pilgrims is to open its first permanent site for its New York pizza-by-the-slice concept Slice next month in Finsbury Park.

HOTELS & LEISURE TRAVEL NEWS:

Inbound quarantine restrictions lifted:

• Fully vaccinated visitors to England from the US and the EU (excluding France) will no longer have to self-isolate from next Monday. Transport secretary Grant Shapps says ‘we’re helping reunite people living in the US and European countries with their family and friends in the UK. From 2nd August at 4am people from these countries will be able to come to the England from an amber country without having to quarantine if they’re fully vaxxed.’ He added ‘we’re also able to confirm the restart of international cruises and flexible testing programmes to help key workers and drive our economic recovery.’

• Further comment – see premium email.

• Heathrow CEO John Holland-Kaye said the news was welcomed. He said ‘the government has made the right decision to safely further reopen international travel. We will now work with colleagues in the industry to boost UK trade, reunite family and friends, and generate billions in new tourist income.’ The Airport Operators Association commented ‘this is a significant and welcome step forward that will be a boost to airports, our inbound visitor economy and the many families who will be able to reunite after a long and difficult period.’ It adds ‘there remain considerable challenges for our airports and aviation sector and our road to recovery remains long. We urge the government to work with industry to continue opening up travel by putting more countries on the green list, reduce the cost of testing and provide the much-needed financial support for the difficult months ahead.’

• Further industry comment and implications for outbound. UK Inbound says this is a ‘fantastic step forward that will allow the £28 billion inbound tourism sector, which supports over 500,000 jobs across the UK, to finally restart.’ It says there are still ‘substantial barriers’ preventing a rapid return to normality, saying ‘the valuable 2021 summer season is all but lost for inbound tourism, meaning thousands of businesses and jobs will continue to be at risk over winter.’

• There are no promises of reciprocity, leaving the outbound sector with little obvious to celebrate. However, the UK’s pubs, clubs, restaurants and hotels stand to benefit from an increase in inbound visitor numbers. Indeed, competition for hotel beds could become somewhat greater.

Company & other news:

• Grant Shapps has said that the English ban on international ocean cruising will be lifted on 2 August. Shapps made the announcement via Twitter.

• The Mirror suggests that ‘sun-seeking Brits could see their holiday plans thrown into disarray after it was reported Spain could replace France and be placed on the quarantine list.’ Spain may become an ‘amber-plus’ country though, in the short term, it looks as though arrivals will be managed in the same way as those from all other EU countries with the exception of France (see above).

• Travel Weekly quotes a ‘senior industry source’ as saying that outbound sales for August are not expected to pick up substantially whatever the government decides in a review of the traffic light system due this week. The source says ‘the situation is not as clear as it would have been because of France and the uncertainty around the amber list. It will continue to be an incredibly late market.’

• Further comment – see premium email.

• Pilots’ union BALPA has said that the move to allow fully vaccinated passengers from the EU and US into the UK without quarantine may be too late to save many jobs in the travel industry. It says ‘we are halfway through the only profitable part of the year – summer – and UK travellers still face huge restrictions in the countries that will allow us in, preventing a real recovery. We are rapidly heading towards the cliff edge end of furlough in eight weeks’ time and as a result, Balpa is in negotiations with airlines to prevent further job losses.’

• Uber’s shares fell yesterday on reports investment firm SoftBank could sell a third of its stake in the ride-hailing app. Separately, Moody’s reports that the company’s acquisition for $2.25 billion of Transplace Holdings, a provider of transportation management solutions and third-party logistics services, was credit negative for Uber because of the large expected increase in debt.

OTHER LEISURE:

• Everyman Media Group has updated on H1 trading to 1 July saying that 33 venues re-opened on 17 May 2021 and ‘the business returned to profit and cash generation on re-opening and for the remainder of the period, social distancing measures remained in place until 19 July.’ The co says it is ‘pleased to report that market share has grown since re-opening, re-enforcing the strength of the Everyman offer.’

• Further comment – see premium email.

• Facebook has reported that it expects revenue growth to slow down “significantly” in the second half of 2021. In Q2, the company saw revenue rise to $29bn, up from $18.69bn last year.

• Alphabet, owner of Google and YouTube, has reported another record quarter. Revenues rose by 62 per cent rise to $61.88 billion in Q2, up from $38.30 billion a year ago.

FINANCE & MARKETS:

• The Nationwide Building Society yesterday reported that annual house price growth had slipped back to 10.5% in the year to July, down from 13.4% in the year to June. Month-on-month, prices fell by 0.5%. A small rise had been anticipated.

• Further comment – see premium email.

• The Telegraph reports that homeowners have been releasing equity from their houses and using the cash to buy more property.

• Further comment – see premium email.

• The US Fed has said that the US economy is making progress due to the rollout of vaccinations.

• Sterling mixed at $1.3928 and €1.1746. Oil price up at $75.12. UK 10yr gilt yield up 2bps at 0.58%. World markets mixed yesterday and London set to open around flat as at 7am.

RETAIL WITH NICK BUBB:

• Further comment – see premium email.

TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 29 Jul 21 M&B Q3 trading update

• 29 Jul 21 Diageo Q4 & FY

• 29 Jul 21 Compass Q3 update

• 29 Jul 21 AB InBev Q2 numbers

• 29 Jul 21 Molson Coors Q2 numbers

• 29 Jul 21 YUM Q2 numbers

• 29 Jul 21 Texas Roadhouse Q2 numbers

• 30 Jul 21 DPP AGM

• 3 Aug 21 Domino’s Pizza H1 numbers

• 3 Aug 21 AG Barr H1 trading update

• 3 Aug 21 Gregg’s H1 numbers

• 3 Aug 21 Marriott Q2 numbers

• 4 Aug 21 Royal Caribbean Q2 numbers

• 5 Aug 21 Bank of England MPC meeting

• 5 Aug 21 Shake Shack Q2 numbers

• 10 Aug 21 Intercontinental Hotels H1 numbers

• 11 Aug 21 Deliveroo H1 numbers

• 11 Aug 21 Hostelworld H1 numbers

• 12 Aug 21 TUI Q3 numbers

• 18 Aug 21 Carlsberg H1 numbers

• 19 Aug 21 Rank FY numbers

• 2 Sept 21 Jet2 AGM

• 15 Sept 21 Restaurant Group H1 numbers

• 21 Sept 21 Compass Group full year update

• 22 Sept 21 Ten Entertainment H1 numbers

• 23 Sept 21 Playtech H1 numbers

• 1 Oct 21 JW Wetherspoon

• 5 Oct 21 Gregg’s Q3 update

• 13 Oct 21 Marston’s FY trading update

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 26 Oct 21 Campari Q3 numbers

• 23 Nov 21 Compass Group FY numbers

• 24 Nov 21 Britvic FY numbers

• 30 Nov 21 Marston’s FY 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.