Specialist
Former Senior Executive at Punch Taverns Ltd
Agenda
- Coronavirus impact on top-line and operating profit
- Current rate of recovery and Q4 2020 outlook
- Competitive landscape – potential winners and losers
- Medium-term industry outlook
Questions
1.
Could you highlight some of the key trends you’ve noticed in the UK pub industry since the reopenings in early July?
2.
You mentioned that the 35-and-younger categories are the ones really returning to the pub. How should we think about spend between the younger category and the older category, to get a sense of how pubs are performing?
3.
What percentage capacity do you estimate pubs to be operating at under current social distancing guidelines?
4.
You mentioned that general capacity is down around 30-40%, so pubs are probably close to 60% operating capacity at the moment. What capacity do you think pubs need to operate at to break even?
5.
As you mentioned, social distancing measures most likely will not be withdrawn in the near term, and pubs lose opportunities for outside areas as the nights get colder and darker. What strategies could pubs utilise to combat the loss of capacity and drive the top line that’s needed?
6.
Pubs were closed for just over 14 weeks in England, and we’ve started noticing the financial impact coming through in results. How do you think we should examine the financial figures and the cost of closure per month on these pubs?
7.
You mentioned some of the UK government schemes that have tried to help pubcos and restaurants. How effective would you say the Eat Out to Help Out scheme was? Do you think there’ll be any tailwinds from it now it has ended?
8.
Might the VAT reduction delay the fallout into 2021?
9.
You mentioned that Eat Out To Help Out drove consumers to come back into pubs for the food side of dining. Could you give us a sense of a healthy split between food and beverage for pubs? Where do you think the split is now and what might be the margin impacts, given that consumers have to sit at tables and the presumable move towards food rather than beverage?
10.
What’s your take on pricing in the market and how it could trend long-term? Anecdotally, pints have increased in cost in London. Is that a trend through the country as a whole? Where do you predict pricing levelling off in the longer term?
11.
You’ve described how the top line is weighing down the pubcos, and touched on their costs, but do you expect any cost inflation to come through in the rest of H2 2020? My first thought is labour cost inflation might be needed.
12.
What’s your assessment of the additional costs from implementing social distancing? A lot of companies have had to invest in infrastructure around their apps – you also mentioned the installation of perspex screens as a safety measure. Could these things have a significant impact on income statements in 2020?
13.
Did you mention pubcos decreasing rent breaks by 10% MoM?
14.
You mentioned that improving cash flow will be a priority for the pubcos. How could players achieve this, beyond the obvious levers you mentioned, such as withholding CAPEX? Could they stretch their working capital? How could publicans improve cash flow?
15.
What’s your revenue outlook through the remainder of 2020? When might the sector return to 2019 levels?
16.
What’s your take on pub closures in H2 2020-21 due to coronavirus, relative to how closures have trended across the last decade?
17.
Could there be consolidation in the industry with big pub players buying up smaller individual players? Could more private publicans come in?
18.
How could an expected rise in unemployment as government interventions subside affect the sector? How could a recession play out for these groups?
