Langton Capital – 2021-09-14 – Winter Plan, passports, support withdrawal, inflation, BrewDog, DOM etc.:
Winter Plan, passports, support withdrawal, inflation, BrewDog, DOM etc.:A DAY IN THE LIFE: I was thinking about information, the other day because, in the distant past, if it wasn’t passed on verbally, it was lost. Big backward moves could be expected if an illness wiped out the old folk before they’d finished handing their knowledge down but, to the relief of everyone, the invention of the written word added a degree of permanence. However, cost was an issue as, before the printing press, books cost around £12,000 each or maybe £400 per page. So they only dealt with heavy issues such as spirituality rather than how to plant a spud and even if you had access to a book, you’d have to find somebody to read it to you. Probably a priest. Worse, a lawyer but then Gutenberg brought the price down to maybe £50 a book, mass literacy became a thing and we immediately invented other problems as we entered the era of heresy, propaganda and fake news. More recently, the internet has exacerbated this by making data ‘free’. The problem being, much of it is garbage and a lot of the rest is opinionated lies. Data is noise and information is something rather different. Indeed, as the volume of raw data goes up, the temptation is to pick the bits you want to believe and just go with that. Data needs to be interpreted. We’d like to say ‘that’s where Langton comes in’ but we accept that interpretation brings with it a whole other set of problems as humans are infested with biases and, in some cases, they are liars. Anyway, that’s quite enough of that for now. Thin news day, today, but let’s move on to what we’ve got: 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 now largely written 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: PUBS & RESTAURANTS: Covid passports – held in reserve: • Prime Minister Boris Johnson is to outline later today the Government’s winter Covid plan, with vaccinations set to provide Britain’s main defence over the colder months. The over-50s are to be offered a third jab and children between the ages of 12 and 15 are to be included in the programme. • Vaccine passports, however, will not be introduced but will rather be ‘held in reserve’. Regarding the dropped vaccine passports, CEO of Night Time Industries Association, Michael Kill, said ‘Our focus now is to ensure that the Chancellor’s October budget allows us the financial space to rebuild and for the industry to maintain its exemplary record in support of the public health’. • The Press is split along predictable lines as to whether this flipflopping was another example of government incompetence or a masterful bluff in order to oblige younger people to get their Covid jabs. The Independent goes with ‘shambolic’ whilst The Express just sticks to Sajid Javid’s comments and doesn’t mention that a raft of government ministers were saying the opposite only four or five days ago. Commenting on the Winter Plan, which PM Johnson is to announce today, The Express says he will ‘all but rule out further lockdowns to control an anticipated surge over the coming months’. Covid-induced change: • Foodservice analyst Peter Backman says that this is ‘a phenomenon that we are only now getting to grips with. Its effects will become visible over the years.’ • Government support to be withdrawn in stages. Peter Backman points out that the ‘swaying rope bridge of 1 October is approaching. That is the day when the Job Retention Scheme (the furlough scheme) comes to an end and it’s also the day when VAT in the hospitality sector increases from 5% to 12.5%.’ This will be rather a big occasion. It is also the day from which landlords will be able to evict tenants for non-payment of rent. • Further comment: See premium email. • Inflation: Dealing directly with inflation (see also Finance & Markets below), the Institute of Economic Affairs talks about the mechanics of putting prices up. This is easier to contemplate than it is to enact because of consumer resistance and the existence of well-known price points. • Further comment: See premium email. • A survey by Which? found that 18% of consumers had been unable to pay with cash at least once when trying to buy something between April and July. However, 8 in 10 people believe shops should continue to accept cash going forwards. Delivery problems: • Transport secretary Grant Shapps has said that it is ‘not in the hands’ of government to guarantee that there will be enough HGV drivers to deliver goods in time for Christmas. Mr Shapps said he ‘can guarantee is we will do everything we possibly can to enable more HGV drivers to pass their tests to get on to the roads, to have better conditions, and the raft of other measures that we have discussed.’ Mr Shapps claimed that the Covid-19 pandemic was the biggest problem re lorry drivers, not Brexit. He said ‘I am not going to stand here and deny that there haven’t been big changes to the way our industry is operating but no-one can realistically deny that those problems had been coming along for a very long time.’ • Further comment: See premium email. Company & other news: • Domino’s Pizza Group has announced the completion of its £45 million share buyback programme that has been running since 9 March 2021. It says ‘between 9 March 2021 and 13 September 2021, 11,762,066 ordinary shares were repurchased’ and adds ‘the purpose of the Programme is to reduce the Company’s share capital and accordingly the Company intends to cancel the Ordinary Shares purchased under the Programme.’ • BrewDog has appointed former Asda CEO Allan Leighton as a non-executive chairman. Leighton is the current chairman of the Co-operative Group, Royal Mail, Entertainment One, Element Materials Technology Group, and Wagamama. The hire is thought to be a move ahead of what could be a stock market flotation. The move follows on from the hiring of Blythe Jack as its first chairman. Jack was put in place to oversee ‘the recruitment process for a fully independent chairman in order to ensure the composition of the board is moving towards meeting the requirements of the UK corporate governance code’ said the company. Jack will remain on the board as deputy chair. • Further comment: See premium email. • The MA reports that trading has been mixed with William Lees-Jones, managing director of JW Lees Brewery predicting that operators are unlikely to know the full extent of the reopening until next April. • Gordon Ramsay’s ‘Hell’s Seltzer’ is being rolled out to 11 US states by Brew Pipeline. Hell’s Seltzer comes in four flavours; Berry Inferno, Knicker Twist, Mean Green and That’s Forked. • In the US, Uber Eats and Postmates have announced a new tiered pricing structure, with 15%, 25% and 30% fee plans. • Further comment: See premium email. HOTELS & LEISURE TRAVEL NEWS: • A survey of ABTA members has found that as many as seven in 10 travel companies plan to make redundancies after the furlough scheme ends on 30 September. ABTA says that summer 2021 bookings were 83% down on 2019. It said that 58% of bookings with departure dates in July or August had been postponed or cancelled. In a letter to government, ABTA says this ‘demonstrates that the traffic light system has acted as brake on the sector and failed to deliver the conditions necessary for recovery’. • Heathrow boss John Holland-Kaye has urged the government to change rules for international travel in order to support the UK’s economic recovery. Holland-Kaye said ‘If Ministers fail to take this opportunity to streamline the travel rules then the UK will fall further behind as trade and tourists will increasingly by-pass the UK’. • Airlines Uk and the Airport Operators Association have written a joint letter to transport secretary Grant Shapps, urging the government to ‘fundamentally rebalance’ its approach to foreign travel. The trade bodies called for fully vaccinated passengers and anyone travelling from low risk countries to be able to travel with restrictions or testing. • The Student Hotel has started construction of its £300m Glasgow Merchant City hotel. The hotel will be a ‘hybrid’ hospitality concept combining accommodation, co-living and co-working spaces with restaurants, bars, gyms, retail outlets and meetings and event spaces. FINANCE & MARKETS: • Commenting on inflation, the Institute of Economic Affairs says ‘the warning signs are there’. It says ‘we have not had shortages on such a widespread scale for decades.’ It says that it ‘is highly likely that the problems we face across so many sectors of the economy are indicators of nascent inflation. There are other indicators too. Commodity prices are roaring ahead.’ • Further comment: See premium email. • The Telegraph says ‘City confidence surges on hopes Britain will rip up Brussels rules.’ That would, presumably, put paid to any thoughts of equivalence, a central tenet of which would have to be comparable legislation. • The CBI has said that Boris Johnson’s recently announced tax rises could undermine the UK’s recovery. Director General Tony Danker is to tell the Alliance Manchester Business School that a “return to business as usual in our economic policy, at this unique moment in British economic history, would be a mistake”. • Britain is to once again delay post-Brexit customs checks in order to kick the disruption they will cause down the road. The Telegraph says ministers are ‘blaming Covid disruption, despite the EU imposing full checks on British exporters from day one of Brexit.’ M&S is talking about shutting its stores in France due to added red-tape and stocking problems. • Sterling mixed at $1.3839 and €1.1713. Oil higher at $73.98. UK 10yr gilt yield down 2bps at 0.74%. World markets mixed but broadly better yesterday. London set to open up around 5pts as at 7am. RETAIL WITH NICK BUBB:
Today’s News: The JD Sports interims today cover the 26 weeks to end July and are astonishingly good: PBT before exceptionals was as much as £439.5m (versus a 2020 outcome of only £61.9m and £158.6m in 2019), including significant contributions from the United States (boosted by the recently acquired Shoe Palace and DTLR businesses) and the core JD business in the UK, “with a strong retention of sales through digital channels in the first quarter whilst the stores were temporarily closed, combined with strong pent-up demand after reopening”. JD boss Peter Cowgill says that “We remain absolutely confident that our inherent strengths in retail dynamics and operations provide us with a robust platform to make further progress. At this time, we are generally encouraged by our performance in the first few weeks of the second half although retail footfall remains comparatively weak in many
Today’s Press (1): According to the invaluable Guardian press summary email, the front pages today are dominated by Boris Johnson’s winter Covid plan. The Guardian itself leads with “Booster jabs for over-50s as No 10 accelerates vaccine programme”, while the Times has “Over-50s to receive booster jabs for winter”. The Daily Mail offers its take on Johnson’s Covid plan, declaring “Return of the doom squad”. The Daily Express splashes with “Boris ‘confident’ Covid plan means no return to lockdown”. Other papers focus on the push to vaccinate children: the Daily Mirror leads with “Jabs for kids in days” while the Telegraph’s main story is “Parents told to get their children vaccinated”. The FT says “Johnson’s £15bn ‘stupid tunnel’ killed off in Treasury crackdown”. And there’s still plenty of love for US Open winner Emma Raducanu, with smiling portraits of the British tennis star in New Today’s Press (2): In terms of Retailing stories, the mixed Primark pre-close update gets plenty of coverage: the FT headline is “Primark sales show signs of recovery”, whilst the Guardian flags that “Primark hit by ‘pingdemic’ but it says supply crisis won’t lead to shortages” and the Times highlights that “Primark makes the most of its margins”. The Business editorial in the Times notes that “As weather-vanes go, Primark gives a pretty accurate reading on the winds blowing through the high street”. The Times also has a comment column about the problems of WH Smith: “Travel rules and restrictions will determine the fate of WH Smith”. The FT also catches up with the Mail on Sunday story about M&S in France: “Red tape sparks M&S review of French stores”. This Week’s News Flow: The latest monthly Kantar grocery figures are out at 8am this morning. Tomorrow brings the Dixons Carphone AGM and the Games Workshop AGM, as well as the Pendragon interims. On Thursday we get the JLP interims, the THG interims, the Wickes interims, the Dixons Carphone/Currys name-change and an ASOS Capital Markets Day on Sustainability. Friday then brings the ONS Retail Sales figures for August. TRADING STATEMENTS & EVENTS: Upcoming results are set out below: • 1 Sept 21 PPHE H1 numbers • 1 Sept 21 888 Holdings H1 numbers • 2 Sept 21 Jet2 AGM • 2 Sept 21 Gym Group H1 numbers • 7 Sept 21 DP Eurasia H1 numbers • 9 Sept 21 Gear4Music AGM • 9 Sept 21 Morrison’s H1 numbers • 9 Sept 21 Sportech H1 numbers • 13 Sept 21 Gaming Realms H1 numbers • 15 Sept 21 Restaurant Group H1 numbers • 16 Sept 21 C&C H1 trading update • 16 Sept 21 ONS real time indicators • 21 Sept 21 Compass Group full year update • 22 Sept 21 Ten Entertainment H1 numbers • 23 Sept 21 City Pub Group H1 numbers • 23 Sept 21 Playtech H1 numbers • 25 Sept 21 (est) GfK UK Consumer Confidence numbers • 29 Sept 21 Fulham Shore AGM • 30 Sept 21 New River investor day • 1 Oct 21 JW Wetherspoon • 5 Oct 21 Gregg’s Q3 update • 6 Oct 21 Constellation Brands Q2 numbers • 8 Oct 21 Hollywood Bowl FY update • 13 Oct 21 Marston’s FY trading update • 22 Oct 21 Intercontinental Hotels Q3 numbers • 25 Oct 21 DP Poland H1 numbers • 27 Oct 21 Chancellor’s Autumn Budget • 26 Oct 21 Campari Q3 numbers • 28 Oct 21 YUM Brands Q3 numbers • 18 Nov 21 Jet2 H1 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. |
|
