Headlines
• Ireland to bring in ‘Level 3’ restrictions
• WHO warns that “pandemic fatigue” has set in in Europe
• China to have its locally produced vaccines assessed by the WHO
• Japan and South Korea plan to open business travel between the two countries
Company news
Industrials
• Gooch & Housego – “The group ’s manufacturing locations in the UK, USA and China are now all fully open , and trading levels in the latter part of the financial year reflected the recovery in the company’s manufacturing capacity and some of our larger customers ’ manufacturing sites reopening. ”
Leisure
• Odeon – is cutting the opening hours for some of its cinemas in the UK and Ireland to weekends only. The chain, which operates 120 theatres, said it will affect a quarter of its cinemas, which will now open between Friday and Sunday.
• Restaurant Group – “Against this backdrop, the performance of our divisions since reopening has been very encouraging:
Wagamama
Since reopening for dine-in we have seen a continued strong trading outperformance versus the market, with the division achieving LFL sales growth of 11%, representing a 5% outperformance versus the market.
In terms of the performance achieved by segment, we saw the strongest performances in our communities and destination shopping trading segments driven by displaced workers and local summer holidays, with our central London estate performing the weakest due to reduced footfall numbers. Split of LFL sales performance by segment is as follows:
• Communities: LFL sales growth of 25% (comprising c.50% of the estate)
• Destination shopping: LFL sales growth of 9% (comprising c.25% of the estate)
• Major city centres: LFL sales growth 6% (comprising c.12.5% of the estate)
• Central London: LFL sales decline of 24% (comprising c.12.5% of the estate)
Leisure
Since reopening the restructured business has been trading broadly in line with the market with the division achieving LFL sales growth of 4%. In terms of the performance achieved by segment, we saw the strongest performances in our retail parks as well as destination shopping trading segments driven by people working increasingly from home, resulting in trade being spread more throughout the week, with more leisure time to visit shopping centres and retail parks. Split of performance by segment as per below:
• Retail park only: LFL sales growth of 10% (comprising c.20% of the estate)
• Destination shopping: LFL sales growth of 8% (comprising c.20% of the estate)
• Parks with a Leisure scheme: LFL sales growth of 2% (comprising c.59% of the estate)
• Central London: LFL sales decline of 68% (comprising c.1% of the estate)
Pubs
Since reopening we have seen an exceptional trading outperformance versus the market, with our Pubs achieving LFL sales growth of 14%, representing a 20% outperformance versus the market.
In terms of the performance achieved by segment, we saw the strongest performances in our rural and suburban estate, with our central London estate performing the weakest reflecting the lower footfall due to the impact of working from home. Split of performance by segment is as follows:
• Suburban: LFL sales growth of 17% (comprising c.35% of the estate)
• Rural: LFL sales growth of 16% (comprising c.40% of the estate)
• Town: LFL sales growth of 4% (comprising c.20% of the estate)
• Central London: LFL sales decline of 38% (comprising c.5% of the estate)
Concessions
As widely reported, Covid-19 has hit the travel sector incredibly hard with short notice changes to quarantine arrangements and passenger volumes remaining significantly down on last year.
Our focus has therefore been on a measured reopening programme as airport travel rebuilds, with a slower reopening rate than the rest of group, focussing on positive EBITDA delivery in each site reopened.
We currently have 16 sites open with LFL sales declining by 58%, +15% ahead of passenger volume decline. Passenger dwell time has increased at airports (due to increased security measures) which has increased customer spend per head. Additionally there is currently reduced competition operating, benefitting operators such as us who have reopened.
Retail
• Watches of Switzerland – “Trading momentum has further improved in Q2. Stronger than anticipated UK domestic sales are offsetting lower tourist and airport traffic, whilst regional stores are continuing to outperform London stores. Furthermore, the strong momentum we have established in the US has further accelerated. All US regions are contributing to this positive trend.”
Other
• A World Health Organization survey estimates “pandemic fatigue” has reached over 60% in some European countries.
• Ireland has brought in ‘Level 3’ restrictions. Under the new rules people need to remain in their own county and work from home unless absolutely necessary.
• 400 students and staff at Queen’s University in Belfast, Northern Ireland, are self-isolating, after more than 160 people tested positive.
• China is in talks to have its locally produced vaccines assessed by the World Health Organization (WHO) as a step towards making them available for international use.
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