Today's business and finance round up 17th May 2021
Today's issue - 📺Less than magical numbers at Disney
17th May 2021
Good morning Today we come bearing gifts - to celebrate the return of indoor hospitality in England, all this week (17/05 to 21/05) we are running a raffle to win £30 of restaurant vouchers. All you need to do is refer Market Loop to your friends, family or colleagues.
Here's how it works:
- When you share Market Loop using the "Forward to a Friend" button below, you’ll be entered into the raffle.
- The more you share, the better chance you have to win (1 forward = 1 ticket).
- The winner will be announced in Market Loop on May 24th
- Less than magical numbers at Disney
- 10% of UK restaurants close during the pandemic
Friday's market moves
FTSE 100 +1.2% 7,044
FTSE 250 +1.2% 22,336
Last week was a jittery one for global stock markets. Stronger than expected US inflation data made investors question whether inflation would be temporary or more permanent. If more permanent, then the Fed could raise interest rates sooner than anticipated.
This led to a tough time for tech stocks which are sensitive to rising interest rates. But markets made up some of their losses after the Fed did their best to calm fears by calling any inflation “transitory” as economies reopen.
Less than magical numbers at Disney
What’s going on
It’s been another tough few months for entertainment giant Disney, revenue for the first three months of the year was down 13% to $15.6 billion. The pandemic has led to widespread closures of their theme parks and the postponement of film releases at cinemas.
Disney+, their streaming platform that launched during lockdown last year, hit 106.3 million subscribers however this was below market expectations.
Why is this important
On the surface it’s pretty impressive that in just over a year Disney+ has gained over 100 million subscribers, especially when you consider that longstanding rivals Netflix and Amazon Prime have over 200 million.
But Disney’s subscriber growth has slowed down and worryingly revenue per subscriber was down 30% to $3.99, this is less than half of Netflix’s. Disney said these trends are due to no major product launches and the launch of cheaper international alternatives like Hotstar.
None of this is particularly concerning yet for Disney CEO Bob Chapek, who said “every single market has exceeded expectations” in terms of global subscriber growth.
He also pointed out that Disney is still expanding to new countries, with Malaysia and Thailand coming in June. Disney has already projected 230 million to 260 million subscribers by 2024.
Although revenue is still below pre pandemic levels and subscriber numbers disappointed, there area few bright spots on the horizon for Disney.
- There’s likely to be pent-up demand for theme parks as lockdown restrictions life. With the recent relaxation of mask wearing in the US, Disney should benefit from this.
- There are a ton of new Marvel titles lined up, including “Black Widow,” “Eternals,” “Shang-Chi and the Ten Rings,” and “Spider-Man: No Way Home,” along with many others.
10% of UK restaurants close during the pandemic
The restaurant sector has been among the worst hit by the pandemic and data from consultants CGA and AlixPartners show how badly it’s been affected. Across the UK, 1 in 10 restaurants have closed their doors in the past year, with mid-market “casual dining” restaurants down almost 20%.
The restaurant sector was already shrinking before the pandemic, but the net losses between 2017 and 2019 were less than 3%.
Before today only a third of hotels, bars and restaurants had reopened since the first phase of restrictions were lifted last month. With indoor hospitality now allowed more venues should be able to open but unfortunately its too late for many especially independent names.
Venues that are part of larger chains are more able to fall back on the group financially, or negotiate agreements with landlords across the group which independent operators can’t do.
The data also showed that pubs, bars and restaurants have reopened at different rates across the cities during the first phase of hospitality’s return. In Leeds over 40% of venues are open whereas in London less than 30% are open, in part to the city’s lower proportion of pedestrianised areas that can be used for outdoor dining.
Today’s reopening of indoor hospitality will be crucial moment for the industry and some welcome light at the end of what’s been a long, dark tunnel.
Covid-19 Vaccine Update
- In the past 24 hours 237k UK adults have had their first dose and 391k have had the second dose.
- This means 69.4% of UK adults have had at least one dose of a vaccine, 38.2% of adults have had two doses.
Other stories to keep you in the loop
Stat of the day
Jeff Bezos has bought a superyacht for $500m, that's twice what he paid for the Washington Post newspaper back in 2013