Langton Capital – 2021-12-14 – Business confidence, mobility, consumers, JDW, passports etc.:
Business confidence, mobility, consumers, JDW, passports etc.:A DAY IN THE LIFE: It’s staying dark for far too long in the mornings these days and I’m going to have to have a word. I mean it’s one thing having to put the lights on for ten minutes when you boot your computer up but, if you have to leave them on till 8.30 or 8.45, that’s quite another issue altogether. Indeed, there must be someone we can sue because they’ll be back on again by 2.30 and that can’t be good for your mental health. And, even when the ‘sun’ is out, it’s so low in the sky that motorists driving east remain a danger to cyclists until about noon and, by a quarter past twelve, they’re a threat to health when driving west. So say we grumpily from Yorkshire largely because we should be getting curried up in London. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Full stories are in the Premium Email. Reply to this email if you would like to upgrade. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new format. Prices for the Premium, unchanged for 2yrs, are £295 for one subscription, £495 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE CGA & FOURTH ON BUSINESS CONFIDENCE: CGA & Fourth report on business confidence. Their latest Business Confidence Survey reports that ‘before the news of the Plan B restrictions, two-thirds of business leaders in the hospitality sector were optimistic about the next 12 months for their business.’ It says this ‘was a modest drop on the previous survey in September, a sign of the ongoing pressures the sector has faced since venues reopened.’ The major issue and weakness in the survey, of course, is that it was undertaken before Plan B restrictions came into force. Overall: • The survey ‘reveals mixed picture of trading and growth plans as hospitality’s fragile recovery from the pandemic is threatened by new restrictions.’ Some 66% of respondents were optimistic about the next 12 months for their business, a modest drop of four percentage points on the previous survey in September. • CGA and Fourth say this is ‘a sign of the pressures that have faced the sector ever since venues reopened earlier this year.’ The situation is likely to have deteriorated • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: Mobility: The Google mobility stats had not picked up much notable reduction in mobility as recently as last Thursday but, anecdotally, it appears to be a different story this week. Sky reports that ‘government guidance has had an immediate impact on the roads and public transport.’ It says ‘commuters reported seeing less people on the roads and on buses and trains in England…with pictures showing deserted motorways, train stations and carriages.’ More anecdotal comment & input from TfL, Network Rail, New West End, CAMRA & others. • See premium. Reply to this email to upgrade. S4Labour stats show that weekly hospitality sales have dropped by 9% when compared to 2019 levels. The announcement of the introduction of Plan B is said to be behind the slowdown. S4Labour says ‘the like-for-like decline was felt by both London and non-London sites, with the Capital experiencing a 16% drop in sales last week on 2019 levels. Non-London sites saw a smaller 7% fall in weekly sales.’ • See premium. Reply to this email to upgrade. Consumer confidence: HGEM reports that ‘operators are torn by Plan B’s impact on consumer confidence.’ HGEM has undertaken a poll with over 70 responses from hospitality professionals and says this ‘revealed the industry is torn by whether consumer confidence would dramatically be influenced by additional Plan B restrictions, such as compulsory mask wearing in public spaces, working from home guidance and the implementation of NHS covid passports for large venues and nightclubs. 47% of respondents voted ‘Yes’, whilst 53% saw the situation in a more positive light and voted ‘No’.’ • See premium. Reply to this email to upgrade. The Bank of England says that UK households have remained “resilient” post the end of the furlough scheme. It says that uncertainty over health and the economy remains according to the Bank’s latest Financial Stability Report. • See premium. Reply to this email to upgrade. Pingdemic: to be reborn if lateral flow tests have run out? Earlier in the pandemic, staff shortages were exacerbated by the need to self-isolate if people came into contact with a person who subsequently tested positive. Contacts with people who report positive with Omicron had to self-isolate for 10dys but that has been changes such that fully vaccinated people can now take lateral flow tests for 7dys and go about their business (almost as normal but ‘avoiding crowded spaces’) instead. However, there has been a run on lateral flow tests and there are currently none to be had. Possible corporate activity. The Times reports that ‘a “perfect storm” of cheap money, rebounding trade, low prices and distressed sellers means that property investors will be perfectly placed to snap up pubs and restaurants with a “wall of capital” next year.’ This per CBRE. The property agent says that investors may push to buy leisure assets next year. It says ‘there is a wall of capital targeting the sector with surplus of demand over supply.’ Vaccine passport. Health secretary Sajid Javid has said that booster jabs will need to be added to vaccine passports shortly. This will increase the barriers to entry into nightclubs and other large leisure spaces. MPs vote on the measures today. Mr Javid told he House ‘from Wednesday – subject to this House’s approval – you’ll need to show a negative lateral flow test to get into nightclubs and large events, with an exemption for the double vaccinated.’ He added ‘once all adults have had a reasonable chance to get their booster jab, we intend to change this exemption to require a booster dose.’ Other: The TUC reports that real wages this month are on course to be 0.8% lower than in September, creating the worst Christmas wage squeeze in almost a decade. The union organisation demanded the government deliver a ‘proper plan to get pay packets rising’. The Caterer reports that some Scottish hospitality businesses are cutting staff hours and reducing supplier orders in a bid to stay afloat after people were advised to cancel Christmas parties. The Night Time Industries Association (NTIA) Scotland said businesses such as nightclubs, bars and restaurants should be compensated for lost bookings on a ‘pound for pound’ basis. COMPANY & OTHER NEWS: JD Wetherspoon yesterday put out a ‘Covid / H1 Trading Update’ in which the company commented on Plan B and its impact on custom. It warns of a ‘lockdown by stealth’. The company had previously said that ‘some customers, especially older customers, were “understandably cautious” and that improvements in trade would depend on “the outlook for the virus”’ and it updates to say that ‘the uncertainty, and the introduction of radical changes of direction by the Government, make predictions for sales and profits hazardous.’ JDW says this will ‘affect our first half results, in particular, which may be loss-making or marginally profitable.’ Chairman Tim Martin said that the group’s pubs are ‘fully stocked and fully staffed’ but he adds that ‘the repeated warnings and calls for restrictions, mainly from SAGE members and academics, combined with arbitrary changes of direction from the Government, invariably at short notice, affect customer sentiment and trade.’ Mr Martin says that he fears ‘the country appears to be heading towards a lockdown by stealth.’ • See premium. Reply to this email to upgrade. German Doner Kebab has opened its third unit in Edinburgh, located in St James Quarter. Bill’s closed 14 loss-making restaurants during the last financial year as the business was under significant cash flow pressures. The company generated turnover of £62m for the 53 weeks to 3 January 2021, with LfL sales down 51.2% compared to the 52 weeks to 29 December 2019. Bill’s reported underlying EBITDA for the period was £1.3m, compared to £6.8m the prior year. It’s loss for the period increased to £17m, up from a loss of £8.3m the year before. Wendy’s opened its fifth site in the UK last Wednesday, located in Romford. Brexit-driven changes to the duty-free alcohol allowance has led to Majestic closing its two Calais stores. The two stores are understood to have generated £10m in annual sales prior to Brexit and the onset of Coronavirus, adding £1m to the retailer’s bottom line. Red Oak Taverns has acquired eight Bristol pubs from Euphorium Pubs Limited for an undisclosed fee. This brings the pub company’s total estate to 208 sites, operating on a range of flexible agreements. LEISURE TRAVEL & HOTELS: easyHotel shareholders Ivanhoé Cambridge and ICAMAP have committed to invest €50m in the company to support its future growth strategy. The brand currently has an estate of 42 budget hotels with a total of 3,977 rooms. It said it has been performing above pre-Covid levels, with occupancy rates regularly exceeding 80% since August. Accor is set to open an ibis budget hotel at London Heathrow Central. The site was formerly a Travelodge and has undergone a comprehensive renovation and redesign. Fears that the Turkish central bank will make a further cut in interest rates later this week have sent the Turkish Lira to record lows, at one point falling nearly 7% to just under 15 to the dollar. The currency is now worth about half its value at the beginning of the year. James Villas is to add 600 villas to its Majorca programme in what is the largest expansion of its product portfolio in its 35-year history. Virgin Atlantic has received £400m in a funding injection provided by Sir Richard Branson and co-owner Delta Airlines. Destination Analyst in the US says that the Omicron impact on travel is ‘now measurable’. It says ‘American travellers are feeling more anxious and less optimistic about the near-term. Openness to travel inspiration is at 59.7%, falling from 64.0% two weeks ago.’ It adds that ‘30.9% of American travellers say that the Omicron variant has impacted their travel in some way—37.2% of this group saying they have cancelled an upcoming trip and 47.3% saying they have postponed—and among those that have NOT been impacted, 26.8% say it’s likely that they will be eventually.’ • See premium. Reply to this email to upgrade. OTHER LEISURE: The British Film Institute (BFI) has said a record £4bn was spent making TV shows in the UK between October 2020 and September 2021, up from £2.3bn spent in the same period in 2018-19. Netflix alone spent £740m making 60 TV shows and films in the UK in 2020. FINANCE & MARKETS: Rightmove says that they UK housing market should return to more normal levels of activity in 2022. It says the last 18mths has been ‘frenzied’. Sterling weaker at $1.3205 and €1.1704. Oil down at $74.47. UK 10yr gilt yield down 4bps at 0.74%. World markets lower yesterday but London set to open up around 27pts as at 7am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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