Specialist
Senior executive at Valiant Pub Co Ltd
Agenda
- Trading update as UK pubs reopen in Q2 2021
- Top-line and profitability impacts in UK pub industry reopening scenarios
- Industry consolidation and M&A opportunities
- 2021 outlook and potential structural industry changes
Questions
1.
What are your initial reactions and thoughts regarding the outdoor reopening of UK pubs on 12 April 2021? Have the first days of reopening exceeded expectations?
2.
You mentioned less than 25% of pubs reopened. Which players do you think were more likely to reopen or did reopen vs remain shut? Has there been any difference across the key players and operators?
3.
Has there been any difference around the extent to which urban vs rural vs city centre pubs have reopened or not?
4.
Has the demand for UK pubs been sufficient to offset the reopening costs? You also mentioned quite high costs around building outside areas.
5.
What is your outlook for UK pubs across H2 2021? Do you think the demand will flow through and be sufficient to cover the lost revenues from Q1 and Q2 2021?
6.
Do you think we’re on track to reopen indoors on 17 May as per the UK government’s roadmap? What complications might push that date back?
7.
Do you have any like-for-like trading assumptions for 2021 vs 2019 for managed vs leased and tenanted pubs?
8.
You mentioned most pub companies have increased their prices. Could you estimate some of these increases? Have they been across food as well as beverages?
9.
What is the likelihood of the current surge in consumer demand being sustained? Would pubs ever bring prices down, or do you think this is the new normal?
10.
Staycations will likely be quite popular across the summer months in the UK. Do you think this is a net benefit for the pubs? Do European travellers typically aid the UK pub industry in a normalised environment?
11.
Do you think there’ll be any longer-term advantage for the pubs that have reopened now? Do you think they’ll be rewarded longer term through customer loyalty or customers now trying these pubs because there’s limited choice?
12.
What are some of the key costs we should be aware of with pubs reopening and improving their outdoor seating areas?
13.
Have reopening grants been backlogged and casued a widespread issue for a lot of the leased and tenanted players?
14.
Do you think players expanding their outdoor areas is a trend that will continue long term? Do you think these outdoor areas will remain when restrictions fully lift in June?
15.
Do you think pubs’ cost profiles have been structurally changed by coronavirus, and how so?
16.
What is happening around the rental rates for managed vs leased and tenanted pubs? Are the leased and tenanted partners asking for rent cuts from the pub companies? Can managed pubs secure lower rental rates if a site is not freehold?
17.
You mentioned labour is a key cost driver. How do you think pubs will manage the payroll cost? Two factors that could lead to labour inflation are the National Living Wage hike and the reports of re-staffing challenges with fewer Europeans and internationals living in the UK due to Brexit. Do you expect any labour issues?
18.
What portion of total costs does labour represent for managed vs leased and tenanted UK pubs?
19.
Many pubs have been making use of app-based order-at-the-table payment and menu systems. Has this impacted the overall level of labour needed within a pub? Do you think it will have any lasting impact?
20.
Have you noticed any players go beyond the general use of the apps and potentially try to use them for the data collected? You mentioned food-led pubs wanting to reduce wastage, which we know can be a cost burden.
21.
Which player do you think has the highest cash burn? Do you think anyone will be significantly disadvantaged by cash burn in the next few months?
22.
How do you expect the industry to rebound post-coronavirus? It has been a harrowing time for the industry, but some green shoots are starting to come through. Do you expect the pub industry to rebound strongly longer term and perhaps even grow to surpass 2019 figures?
23.
What are your expectations for industry consolidation? What percentage of pubs might have closed down permanently due to coronavirus?
24.
Have you noticed many pubs coming to market and potential M&A opportunities for some of the larger players? Have valuations been holding up relatively well?
25.
Do you think alternative use venues could continue after coronavirus and might be further competition to pubs?
26.
Do you think managed or tenanted and leased pubs will outperform and emerge stronger across the next 1- 2 years? Do you expect any of the players to emerge stronger than others?
27.
Are there any further risks to profit levels or trading levels or to the overall industry that we haven’t touched? Are there any other opportunities or points of interest you’d like to highlight?
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