Langton CapitalLangton Capital – 2021-07-20 – PREMIUM – Nightclubs, government review, YNGA, AG Barr, Fevertree etc.: – 2021-07-20 – PREMIUM – Nightclubs, government review, YNGA, AG Barr, Fevertree etc.:
Nightclubs, government review, YNGA, AG Barr, Fevertree etc.:
PREMIUM EMAIL – PLEASE DO NOT FORWARD:
A DAY IN THE LIFE:
I think that one of the most important buttons on Word or Excel or Google Sheets or whatever is the backward arrow.
That is the ‘undo’ button which, if truth be known, has saved all of us, particularly at stupid-o’clock in the morning, from accidentally deleting pages and pages of work, whole columns from spreadsheets and the like and its cousin, the process by which you can retrieve entire documents (that is the version before you did something so utterly stupid as to ruin the whole thing), is also a veritable life-saver.
So, to that unsung geek somewhere who dreamt up these anti-idiot devices, I can only say a heartfelt thankyou and, in the full knowledge that I will never meet them, I can offer them a slap up meal, bubbly included, should our paths ever cross.
On to the news:
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GOVERNMENT STUDY ON IMPACT OF COVID ON HOSPITALITY:
• In a statement of the blooming obvious, HMG says ‘hospitality has been hit hard by the coronavirus (COVID-19) pandemic and the impact has been uneven; bars and clubs have fared the worst, but campsites had a relatively better year than the rest of the sector.’
• It says ‘consumer spending on hospitality started to increase in May 2021 but remains at less than 70% of pre-pandemic levels; a similar picture is seen in turnover – in May this remained one-quarter lower than 2019 levels.’
• The government says ‘confidence of business survival in the hospitality sector started to increase in May 2021 but remains below the all-sector level.’
• Some 81% of hospitality businesses were closed in spring 2020 but ‘only’ domr 54% in the early 2021 lockdown.
• HMG says ‘job vacancies in the hospitality sector have seen large increases and are higher than pre-pandemic levels; however, in June 2021, the number of employees within the sector remained 11% below February 2020 levels.’ This is an interesting observation as it implies that a large block of labour is no longer present.
• The HMRC says ‘just under 1,650,000 employees in the sector were on furlough as businesses paused trading, falling to just under 590,000 employees furloughed at the end of May 2021.’ Hospitality staff are around 25% of all furloughed employees.
2021 revival, particularly for restaurants:
• The government says the ‘revival was particularly strong for the restaurant and mobile food service activities sub-sector where turnover in May 2021 was £3.3 billion, five and a half times what it was in May 2020; this is likely to be because more restaurants were able to provide takeaway services and outdoor dining was permitted.’
• HMG says ‘the pandemic reduced consumer spending in businesses in the hospitality sector, with a knock-on effect in the supply chain.
• This is sometimes overlooked but the government says ‘payments out from businesses in hospitality to their suppliers and contractors fell as restrictions were put in place in spring 2020, and have not yet fully recovered to their pre-pandemic level.’
• Within hospitality, some staycation-facing businesses (such as campsites) have done well but the government reports ‘pubs and nightclubs have been one of the worst affected sub-sectors.’
• It says ‘turnover in May 2021 was 39% lower than May 2019 and has consistently remained below 2019 levels since the pandemic began. In the case of pubs, this is likely a consequence of businesses being closed or disrupted for long stretches at a time.’ No kidding?
• It says takeaway sales, where possible, may have helped but ‘nightclubs have remained closed by law since March 2020.’
• The report says ‘all sub-sectors of hospitality have consistently reported lower confidence than the “all other sectors” average, reflecting the greater impact of the pandemic on hospitality.’
• It says ‘there have been signs of improvement within the accommodation sub-sector.’ Not surprising given the outlook for staycations.
• A study published by the ONS on the impact of COVID-19 on the hospitality sector in the UK has found that consumer spending on hospitality, which includes pubs, remains at less than 70% of pre-pandemic levels. The BBPA said the findings are further evidence of just how hard the hospitality sector, including beer and pubs, have been hit by COVID-19 lockdowns and restrictions, and that investment is now needed in the sector.
• Emma McClarkin, CEO of the BBPA, said ‘The numbers are clear – more investment is needed now for our sector so it can play a leading role in building society and the economy back better. The Government must do this by reforming VAT, Beer Duty and Business Rates by which pubs and other hospitality businesses are greatly overtaxed.’
• SIBA CEO James Calder said the ONS study showed ‘ the continued toll on our struggling pubs and brewers devastated by the Covid-19 pandemic… the sector needs further flexibility on VAT, beer duty and other tax debts to make it through the recovery.’
• UKH adds its comments saying that ‘these figures from the ONS highlight how the pandemic has uniquely hit the hospitality sector and it’s devastating consequences for businesses across all parts of the market.’
• Further comment. UKH adds ‘while ‘Freedom Day’ sees 12,000 venues finally open their doors and the sector operate viably for the first time in 16 months, hospitality is far from out of the woods.’ It says ‘for the sector to enjoy a sustainable recovery, Government will need to continue working closely with us in order to put in place the right trading environment including measures such as the extension of the business rates holiday until at least October, allowing firms to bounce back strongly, and to rebuild fragile consumer confidence. With the right support, hospitality can be at the forefront of the nation’s economic recovery, creating jobs and reviving our high streets and city centres.’
YOUNG & CO – AGM & Q1 TRADING UPDATE:
The group says… We are pleased to report that trading has continued to be ahead of the board’s expectations following publication of our full year results on 20 May 2021…’
Young & Co has updated on trading for the period between its year end and its AGM (today) and our comments on the transaction are set out below:
• Chairman Stephen Goodyear will later today tell the group’s AGM that ‘we are pleased to report that trading has continued to be ahead of the board’s expectations following publication of our full year results on 20 May 2021.’
• Further comment. The company adds ‘on 12 April, we opened 144 pubs for trading in outdoor spaces only, and on 17 May, the remainder of our estate resumed trading.’
• YNGA says ‘for the 13-week period from 12 April to 12 July, total sales were 95% of the same period in 2019 (when we were fully open throughout).’
• The group maintains ‘our trading has benefited from significant pent-up demand, as well as from the major capex programme undertaken in our pubs, hotels and outdoor areas and the delivery of some truly transformational projects.’
Further on trading:
• YNGA says ‘we are starting to see the benefit from our recent major developments, the majority of which were carried out and completed while we were closed during lockdown.’
• It says it is ‘pleased we are now able to operate close to normal following yesterday’s lifting of restrictions.’
• Everything is uncertain at the moment and there is no guidance as to FY22 numbers but the group says ‘we remain optimistic about the balance of the financial year to March 2022 and believe our new and upgraded pubs and hotels and the large number of bookings we have for weddings, parties and other events put us in a strong position to capitalise on another busy staycation summer.’
• It adds ‘we will continue to focus on our strategy of running premium, differentiated and well-invested pubs and hotels. The strength of our balance sheet leaves us well-placed to make further investments and generate good returns for the long term.’
• Earlier this month, YNGA announced the sale of most of its tenanted outlets to Punch. The cash transaction (in addition to the equity fund raise that the company undertook earlier in the pandemic) may be deemed to have left YNGA with something of a war-chest.
• And the final paragraph of its trading update may further encourage the belief that it is likely to make bolt on acquisitions.
• Hopefully the money will not burn a hole in YNGA’s pocket. We do not perceive there to be ‘bargains’ available in the freehold area (there are plenty of leaseholds) but there may be good assets on the market at a fair rather than an extortionate price.
• We cautioned that, at the time of the sale of the tenanted units, there are pros and cons to having an integrated structure. This did not persist for decades for no reason. Without suggesting that the exit was a bad idea, it does reduce flexibility (as to how to designate units) and there could be some diseconomies of scale.
• However, this could take some time to become clear as the pandemic and its aftermath are front and centre in terms of current trading.
• And, as regards trading, YNGA is doing well. We would caution that ‘pent up demand’, though good, may be more of a thing for home refurbs etc than it is for pies and pints as it is unlikely there will be the same level of catchup spend.
• Nonetheless, YNGA is trading ahead of its expectations and that has to be a good thing. Three year chart below:
• Young’s shares have recovered virtually all of the ground that they lost in the early months of the pandemic. This is reassuring but, as a lot of recovery is implied by the share price move, there are some grounds for caution.
o The company increased the number of its shares in issue by 19.2% via the placing of £88m of shares in June last year. Profits will recover to pre-pandemic levels before EPS does.
o A pure managed play is somewhat riskier than an integrated operator
o Though YNGA has wonderful sites, Central London is yet to recover. This may take time and office usage may re-set at lower levels.
PUBS & RESTAURANTS:
Double jabs needed for nightclubs:
• There has been an immediate and heartfelt outcry against the decision by the government to require nightclub visitors to have Covid passports from the end of September. They were open for less than a day before being hit by this latest news. First, it is not clear if other ‘crowded’ venues will be covered – and what does ‘crowded’ mean, does it extend to a busy chip shop? – and second, it is decried as unfair that the venues are to be singled out. Cheltenham is admittedly outside, but it’s not clear if opera houses, cinemas and the like will be covered. The government has been accused of rushing the news. Presumably the fine print, if there is any, is to follow.
• Industry reaction. Michael Kill of the Night Time Industries Association says ‘the announcement from the prime minister that COVID passports will be made mandatory for nightclubs in September comes after his health secretary said only one week ago that they would not be compulsory. What an absolute shambles.’ He says ‘leaving aside the fact that this is yet another chaotic U-turn that will leave nightclubs who have been planning for reopening for months will now have to make more changes to the way they operate – this is still a bad idea.’
• Sacha Lord, Manchester’s night time economy adviser says the whole thing is a ‘surprise’ and CEO of Rekom (was Deltic & before that Luminar) says ‘younger guests are 95% of our customers – they won’t be fully vaccinated [by September]. We won’t be requiring them, otherwise we won’t have anyone in.’ UKH adds ‘this announcement comes as a hammer blow on a day when nightclubs, a sector that has been closed by the Government for 16 months, were finally given hope that they could start to trade viably and make progress toward rebuilding and paying off accrued debts.’ It says ‘Covid passports will be a costly burden that run the risk of creating flashpoints between staff and customers, as well as raising potential issues with equalities legislation and the handling of customer data. As recently as last week the Government asked us to work with them on a voluntary scheme, so this new
• Further comment: There will be two sides to the above story in that many people (call them voters) may be in favour of applying leverage to younger people to encourage them to get jabbed. But, having said that, it does have the look of a rushed piece of legislation cobbled together on the fly. Why not announce this six months ago, for example. The government has separately made the announcement that 60% of hospital admissions have had two jabs and it has been known for a while that younger people, even if they catch the disease, are rarely hospitalised. Hence, whether it is ‘right’ or ‘wrong’, the move does seem to be younger people making sacrifices in order to protect an older demographic.
• The Music Venue Trust, which represents grassroots music venues says ‘singling out nightclubs, or music venues, or any other cultural activity, as spaces required to deliver such a policy won’t work without the tools to do it and without addressing the obvious point that most grassroots music venues have lower capacities and lower total attendees per day than pubs.’ It makes a good point. There will clearly have to be a definition of nightclub in order that pubs, restaurants and busy coffee are not similarly included.
Working from home:
• The government has said that it hopes and expects the return to the office to be gradual and early evidence is suggesting that this may be the case.
• Further comment: Or, at least, the ‘nobody going back yet’ bit may be correct. Whether the ‘they will go back eventually’ bit follows is as yet unknown. Sky reports on empty commuter trains. The hot weather probably did nothing to encourage people to give up their gardens for sweaty commuter trains. PwC tells Sky that around 10% of its UK staff are back in the office. This number is edging up. PwC says this ‘shows the direction of travel but actually we haven’t seen a big influx of people coming back into the office.’ Separately, Zoom is doubling down and yesterday announce the $14.7bn (£10.7bn) acquisition of Five9 in order to expand the size of its offering.
Pindemic & staff shortages:
• Iceland CEO Richard Walker said some of their 1,000 UK stores had been forced to close by the NHS app ‘pinging’ staff with orders to self-isolate as supermarkets and pubs face a ‘pingdemic’. Greene King CEO Nick Mackenzie has said that he has been forced to close 33 pubs in the last seven days owing to shortages.
• Robert Jenrick has said that the NHS app could be desensitised shortly.
• Further comment. Mr Jenrick also said that the PM and chancellor would not be self-isolated – only to be told two hours later that they were. Admittedly, just because he was 180 degrees wrong on one story doesn’t mean that he is necessarily wrong on the other. Jenrick said re the app that ‘we are going to give further thought to how we can ensure that it is a proportionate response.’ So we’re in safe hands.
• Foodservice analyst Peter Backman comments on the labour shortage conundrum saying that difficulties in recruiting staff are evident in the UK, the US and in Australia. In the UK, it is being blamed on Brexit and the exodus of Eastern Europeans. But this isn’t an issue in the US or in Australia. The US ‘blames’ it partly on the “$2,000 payments to people thrown out of work” – but this isn’t a feature in the UK or Australia. And Australia doesn’t have much of an excuse at all.
• NRN in the US reports that Delaware has become the 9th state in the US to raise the minimum wage to £15 per hour.
• Lloyds Bank has suggested that spending in pubs and restaurants was up 52% during Euro 2020 (played in 2021) versus 2019. This is not entirely in accord with other industry studies, not least the Tracker, which we reported on yesterday. Lloyds says ‘the feel good factor from Euro 2020 clearly provided the perfect platform for consumers to spend some of their lockdown savings. Whether people were buying food and drink for a night in with the football, or at their local pub soaking up the atmosphere, spending soared above levels seen in 2019. Many will hope that the consumer confidence seen in spending power throughout the tournament carries through the rest of the summer months.’
• The Morning Advertiser has polled readers and finds that 45% ‘have said they will continue with table service beyond next week and the relaxation of Covid-secure trading measures. Oakman Group has said it will retain table service and JDW has said that it will still encourage the use of its app – but it will not discourage ordering and drinking at the bar. City Pub Group will retain table service.
• Picking on Scarborough, Yorkshire, the Guardian says that staycations will be strong this year. However, as we have mentioned before, a convoy can only move at the speed of its slowest ship and, if staff cannot afford to live in resort, venues will either have to shut or bus in workers at extra cost. The Guardian says ‘tourists are fuelling record bookings but severe staff shortages due to Brexit and workers self-isolating have kept many hospitality firms closed.’
• Further comment. Building on the ‘speed of the slowest’ argument, we would point out that demand without supply simply creates inflation. If ‘supply’ is to be created then overnighters need accommodation and day-trippers need parking spaces and to be sure that, if they are driving from the West Riding to Scarborough for a daytrip, they won’t spend three hours on the A64 south of York on the way there and a similar amount of time west of Malton on the way back (which, believe us as York residents, they will).
• On a brighter (but still to be organised somehow) note, the Guardian says ‘according to the tourism group Visit Britain, a third of UK adults are planning a domestic break of some kind this summer, which would lead to an estimated £4.9bn of spending between July and September. Seaside towns and coastal resorts were the most popular destinations among the adults it surveyed, followed by breaks in the countryside.’ Langton has got a couple of domestic breaks coming up – at the seaside and in the countryside. This could be either a) enjoyable or b) hell.
• On a similar theme, Pragma Consulting considers the ‘rise of staycations, local city breaks and weekend retreats to other parts of the country’ and says that, as a growing market, a number of trends are becoming apparent. It says there are new developments being announced saying the ‘rise in demand from UK residents is providing a platform from which leisure/holiday brands and operators can increase their presence and offerings within less notable parts of the country.’ It points to expansion announcements from Center Parcs and also from theme park owners and other players. It also says that ‘complementary offerings’ should be an area of growth – leisure venues in or around existing tourist hotspots or destinations – and adds that ‘beauty spots such as Cornwall, the Cotswolds and the Scottish Highlands as well as historic cities such as London and Edinburgh, rarely fail to attract
• Further comment: Pragma says that beauty spots and ancillary services are not exactly new but ‘from Butlins to B&Bs, the UK tourism market has been developing and changing continuously for decades.’ Pragma says ‘there is undoubtedly more to consider when attempting to tackle the domestic tourism market, and each brand will have different requirements and deliberations that need to be made.’ That isn’t much of a conclusion but, with overseas travel still problematic and complicated, the thrust of the argument – that this and probably next year will be strong for staycations – seems to be well founded.
• The move to ‘freedom’ coincided with a very sharp drop on the markets yesterday. This was a global phenomenon, however, and not UK specific but, in this country, scenes of younger revellers partying hard from 00.01 yesterday morning, presumably until after the sun came up, does seem at odds with the somewhat downbeat mood emanating from the markets. City AM reports ‘dancefloors across England were packed with pandemic partygoers at midnight as Covid rules eased in the country.’ It says ‘thousands of clubbers queued for sell-out venue events on Sunday July 18 to celebrate the lifting of restrictions that came into force this morning.’
• Further comment. The Evening Standard says ‘Freedom Day’s here -now wait for the ping.’ The reaction should, really, have been foreseeable because, as City AM points out, ‘nightclubs have been closed since the start of the pandemic and have reopened their doors for the first time in over a year without any restrictions.’ It says ‘the industry has been encouraged to check if people are either fully vaccinated, have natural immunity from infection or have a recent negative test using the NHS Covid Pass before entering.’ This may well not have happened to any material degree.
Company & other news:
• Upgraded expectations at AG Barr. The company has updated on trading saying that ‘at our full year results on 30 March 2021 we communicated that the business was in strong financial health, with our brands and business poised for growth on a like for like basis.’ It adds that ‘trading since then has been better than anticipated, driven by a combination of factors, some Covid related, including customer restocking, in the hospitality sector in particular, and some associated with underlying brand momentum, such as the positive performance of recent innovation launches.’ The company says ‘as such we now expect profit for the current 53-week financial year, to the end of January 2022, to be slightly ahead of the performance delivered in the 52-week year prior to Covid (2019/20 Profit before tax : £37.4m).’
• Fever-Tree has updated on H1 trading saying that UK sales are up 4% and total sales are up 39% (against soft comps). The co says it ‘delivered strong sales growth across all its key markets in the first half of FY21 as the On-Trade gradually re-opened during the second quarter and Off-Trade sales remained very encouraging. Revenue growth of 39% on a constant currency basis was ahead of the Board’s expectations despite the comparable levels of COVID restrictions present in the first half of FY21 compared to the first half of FY20. However, challenges surrounding global logistics cost pressures have progressively impacted the Group’s margins.’
• Fever-Tree CEO Tim Warrillow says the company ‘made significant progress in the first half of 2021, delivering a strong revenue performance.’ He says ‘our performance in the On-Trade as it has reopened has been encouraging in all our markets and our performance in the Off-Trade has also remained strong, with sales far exceeding pre-COVID levels in the UK, US, across Europe, and the Rest of the World.’ Margins are down, ‘impacted by global logistics disruption’ but, despite this, ‘we remain confident as ever in the strength of our business model and the opportunity to improve margins as we cycle out of the current period of COVID disruption.’
• Virgin Wines UK has updated saying ‘the financial year finished positively with strong levels of customer demand in May and June. Revenue and EBITDA for FY21 are now anticipated to be marginally higher than previous expectations.’ CEO Jay Wright says ‘we finish FY21 in excellent shape and in a stronger position than ever to continue our growth. Whilst we will all be watching with interest consumer trends that may develop over the coming year, we have seen nothing but encouraging signs over recent months that the customers we have acquired are staying loyal, our subscription schemes are as robust as ever and that our ability to attract new customers at a competitive cost per recruit remains.’
• Cask Marque is launching a social media campaign to drive footfall into pubs and ensure they re-engage with cask. Cask has struggled since reopening due to not being able to vertically drink, pubs having a reduced range and reduced staff knowledge about the beers.
• Co-founder of D&D London, Des Gunewardena, believes the big opening for hospitality will now come in September, instead of 19 July, saying ‘Our bookings are up [for this] week, but only modestly’.
• Stonegate pub company is suing three insurers for losses it suffered during the pandemic, seeking £845m in a claim filed at London’s High Court against MS Amlin, Liberty Mutual Insurance Europe and Zurich. Various Eateries, which owns the Strada restaurant chain and the Coppa Club, has also filed a £16.3m lawsuit against its insurer Allianz in a dispute over its business interruption policy.
• Fountain Beverage Co has commenced a multi-million-pound investment campaign to raise awareness of the hard seltzer drinks category amongst target consumers. The alcohol infused sparkling water, Hard Seltzer, has grown rapidly since its arrival to the UK market in August 2020.
• Soho Street Cocktails is raising new funding as the startup aims to expand, selling pre-mixed, cocktail pouches, which allow bars and restaurants to improve serve consistency, reduce service time and make industry leading margins.
HOTELS & LEISURE TRAVEL NEWS:
• With the loosening of restrictions, Jet2.com and Jet2holidays have recommenced flights and holidays to amber list destinations. Steve Heapy, chief executive of Jet2.com and Jet2holidays, said ‘there is enormous pent-up demand from holidaymakers looking to get away this summer, so it is fantastic to see full aircraft taking customers away to their favourite sunshine destinations.’
• TUI has also said it is planning to restart operations to more destinations on the amber list over the next week. It says ‘we are continually reviewing our holiday programme and cancellations in line with government updates every three weeks.’ TUI has said ‘we won’t take any customers to red destinations or those which require quarantine on arrival, unless this can be foregone by a Covid test.’ In a move aimed at building confidence, it says ‘if we need to cancel holidays because of updated government guidance, or after reviewing our holiday programme, we will contact customers and aim to give at least seven days’ advance notice. These customers can request a full cash refund, or change to a later date or alternative holiday with a booking incentive.’
• Arrivals from France must still quarantine for 10 days even if they are fully vaccinated, according to the UK government. The restrictions have been placed on travellers from France due to ‘the persistent presence of cases in France of the beta variant, which was first identified in South Africa’.
• The authorities in the US have issued their highest warnings against travel to the UK due to a rising number of Covid-19 cases. It says ‘if you must travel to the United Kingdom, make sure you are fully vaccinated before travel.’ The State Department is blunter, saying ‘do not travel to the United Kingdom due to Covid-19.’
• Joe Biden has hinted that an announcement on the lifting of travel restrictions from Europe may be made soon. The President said ‘ I’ll be able to answer that question within the next several days. I’m waiting to hear from our folks in our Covid team as to when that should be done.’
• Mactaggart Family & Partners has acquired the location and project for Resident Hotels, The Resident Edinburgh, set to open in 2024. The 166-room property will take the group’s UK portfolio up to six hotels.
• Tencent will acquire British game developer Sumo for $1.27bn. Shareholders in Sheffield-based Sumo will get 513 pence in cash per share, a 43% premium to the last price and valuing the company at £919m.
FINANCE & MARKETS:
• Sterling weaker at $1.367 and €1.1596. Oil price sharply lower at $68.78. UK 10yr gilt yield similarly sharply lower at 0.55% (down 8bps) on gapping down in expectations for recovery. Markets much lower yesterday but Far East steadied & London set to open some 29 points up as at 7am .
SOME OF YESTERDAYS TWEETS (WITH INTROS):
Freedom Day. Irreversible or a September lockdown?
• ‘Irreversible’ meets possibility of a September lockdown. Can’t both be right. Think pressure cooker. Gas turned on, lid screwed tight. Something’s got to give. Either the politicians or the virus will need to roll over. Betting’s on politicians. They have better PR…
• Politicians’ dictionary. ‘Irreversible’ now greyed out. ‘Shame’ removed altogether. See Robert Jenrick (yesterday), Matt Hancock (anytime) et al.
The words are the same but the tone is different? Also, no11 seems to be trying to put a bit of clear, blue water between it and no10.
o My imagination or is Sunak distancing himself from Johnson? But can be a risky business placing your bets early. [Just ask all those geezers who had their heads chopped off by Nero, Caligula, Henry 8th, various Louis etc.]
Pingemic, pingopolypse, pingmageddon etc.
• Maths can be inconvenient. Pings are 3x infections. Infections defo go to 100k p. day, maybe 200k (per Neil Ferguson). Cumulate 200k x 4 for 10dys & I can’t quite meld ‘ping’ and ‘Armageddon’ together, but you get the picture
Inflation. What do long bonds know that we don’t? Or are they just susceptible to government manipulation (admittedly globally).
• Long bond yield in times of inflation tends to go one way only. But rates being held down by QE. So is it politicians versus the market? Any betting on how that might end?
• Yesterday (19 Jul 21) was ‘Freedom’ Day’ with younger revellers partying from 00.01 in the morning. Comptoir hosted its AGM.
• Today features Young & Company hosting its AGM. We also have full year numbers from Loungers and H1 figures from Nichols.
• Wednesday brings Britvic’s Q3 update.
• Friday sees Premier Foods host its AGM and update on Q1 trading.
• In the US, we get an update from Chipotle on Tuesday, Coke on Wednesday and, spread across the week, word from ‘Covid-winners’ such as Netflix, Twitter & Snap
RETAIL WITH NICK BUBB:
• Today’s News: The Works’ finals (for y/e April) today are pretty resilient, helped by a surge in Online sales and current trading is strong, with sales up 13% on 2019 levels: “Sales are being driven by growth in categories including jigsaws and art and craft, which have been popular throughout the pandemic”. The Online womenswear business Sosandar has also announced its finals (for y/e March) and although sales were only up by 35%, the new-year has started well, with Q1 sales up by 256% against the weak comps of last spring. The recently floated Virgin Wines has also issued a trading update, to flag that sales in May/June were slightly better than expected, with total sales for y/e June ending up by 30%. There has, however, still been no official update from Ocado about the fire at its new Erith depot caused by robots colliding (first reported on the front page of the Sunday Times with
• IPO Watch: Hot on the heels of the IPO of the maternitywear group Seraphine (ticker “BUMP”) last week and the disappointing IPO of Revolution Beauty yesterday (ticker “REVB”), with the shares dropping 9% below the offer price, first dealings begin at 8am today in the recently floated builders merchant Lords (ticker “LORD”), after the recent placing at 95p, valuing the business at £150m. The placing was said to have been “oversubscribed, having received strong support from institutional investors” and raised a total of £52m (before expenses), comprising £30m for the company and £22m for certain existing shareholders. The business operates from 33 sites in the South-East with a combined turnover “in excess of £288m”. Interestingly, the non-exec Chairman of Lords is no less a personage than Gary O’Brien, the Deputy FD at the Burton Group back in the late 1980’s and best known to retail
• This Week’s News: The latest monthly Kantar grocery sales figures (for the 4 weeks to July 11th) come out at c8am today. On Thursday we get the Howden interims, the Wickes H1 update and the Mulberry interims. Friday then brings the monthly GFK Consumer Confidence index and the ONS Retail Sales figures for June.