Coronavirus - 2 December
2 December 2020
• England’s lockdown ends and new tier system begins
• UK approves Pfizer/BioNTech vaccine
• Saxony imposes curfew on residents
Food, Drinks & Household
• Stock Spirits – “With c.15% of the group’s revenues historically coming from the on-trade, we have inevitably suffered some loss of revenues due to the widespread closures of on-trade channels as a result of the pandemic in H2. However, our longstanding focus on the off-trade and no reliance on duty-free channels stood us in good stead. Our portfolio of local brands performed very well as shopping habits changed and consumers reverted to familiar and trusted brands in uncertain times. This trend was further boosted by “staycations” during the summer.
The extent of this mitigation was particularly evident in the Czech Republic, where on-trade would normally account for over 30% of revenues. Despite losing much of the on-trade business for some four months, underlying Czech revenue for the year was almost flat and underlying adjusted EBITDA was up +2.3% (all at constant currency) .
Italy and Croatia, heavily reliant on tourism and on-premise consumption, were the two markets where we felt the most severe impact of the pandemic, resulting in the impairment of €9.6m taken against our traditional Italian brands in H2. This impairment does not involve the newly-acquired Distillerie Franciacorta brands that performed with pleasing resilience.”
• Angling Direct – “Since reporting its half year results covering the six months to 31 July 2020, the Company has continued to perform well, with sales growth across all channels for the nine months to 31 October 2020 up by 30.5% on the FY20 comparable period to £54.5m. The board can also confirm that trading over the Black Friday period in the last week of November was a success and delivered in line with the company’s expectations.”
• Bonmarché – which has 225 stores around the country, has fallen into administration, putting more than 1,500 jobs at risk.
• Science in Sport – “Online channels continue to perform very strongly, and this has offset some of the downturn caused in our Retail channels by the Covid-19 pandemic. Total Online revenues are ahead 39% YoY at £23m to the end of November. Online sales are expected to grow to approximately 51% of total revenue for the full year, compared with 38% in 2019.
Very good progress has been made with our PhD.com digital business, up 108% to the end of November versus the same period in 2019. Our USA business is up 32% year on year and cash burn is significantly reduced, given the gross margin improvement to 74% and a streamlined operating model.
Group gross margin for the year is forecast to be up by four percentage points to approximately 48%, compared with 44% in 2019. Gross margin to date for the second half is up a further two percentage points to 50% and we see this as a sustainable base. The improvement is driven by Online pricing and promotion strategy, together with strategic Supply Chain initiatives flowing through in the second half of the year.”
Travel & Leisure
• Loungers# – “The strength of our trading in the first half was maintained through to the second national lockdown commencing on 5 November.
Underlying LFL sales performance (excluding the positive impacts of EOTHO and the VAT reduction) of -1.1% in the period to 4 October declined only fractionally to -1.3% in the extended period to 4 November, in spite of the growing impact of the 10pm curfew and the ultimate inclusion of 55 of our sites in Tier 2 and 3 areas
In the short term we expect a more severe impact on sales. In England we have 60 sites that will remain closed under Tier 3, with 91 sites trading in Tier 2 and three sites trading in Tier 1. In Wales we have 14 sites that will be subject to increased restrictions from 4 December.
We anticipate returning to a run rate of 25 new site openings per annum during the course of the financial year ending April 2022.”
• French Prime Minister Jean Castex has said random border checks will stop holidaymakers going to ski in neighbouring Switzerland. France, along with Germany and Italy, is shutting its ski lifts over Christmas to stop the spread of Covid-19, but Swiss slopes are already open.
• The UK has become the first country in the world to approve the Pfizer/BioNTech vaccine for widespread use. Britain’s medicines regulator, the MHRA, says the jab, which offers up to 95% protection against Covid-19 illness, is safe to be rolled out. The first doses are already on their way to the UK, with 800,000 due in the coming days, Pfizer said. Elderly people in care homes and care home staff have been placed top of the priority list, followed by the over-80s and health and care staff.
• The United Nations has voted unanimously for a resolution calling on all countries to designate seafarers as key workers. Due to travel restrictions, hundreds of thousands of maritime workers have been left stranded aboard ships worldwide, unable to return home
• The US Centers for Disease Control and Prevention has said it will shorten the recommended length of quarantine after exposure to someone who is positive with coronavirus. The American public health body said it will soon issue guidelines that reduce the number of days from 14 to 7-10.
• Latvia has extended a state of emergency until 11 January – from tomorrow meetings are subject to a 2+2 rule: limited to two people, two metres apart. Shopping centres are to be shut at weekends and masks must be worn indoors, including in schools.
• All cafes and restaurants in St Petersburg will be closed from 30 December until 3 January.
• The German state of Saxony is imposing a curfew from today, after several districts in the eastern region reported rising infections. In the city of Chemnitz and most Saxon municipal districts, as of Wednesday people are only allowed to leave their homes if they have a valid reason for doing so, such as a journey to work, school or nursery, a doctor’s appointment or a shopping trip. The sale of alcohol is banned from 10pm, and weddings and funerals may be attended by no more than 25 people.
• Austria’s ski lifts will open on 24 December, but hotels, bars and restaurants will remain closed throughout the holiday season, the government has announced.
• Australia’s economy grew 3.3% in the September quarter. A rebound in consumption was a key driver of the September result. Household consumption increased 7.9% in the quarter, the largest rise in the 60-year history of the national accounts.
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