A look at Pubs and Gambling Stocks Post Lockdown Relaxation

Summary

• The Britain pub sector re-opened from 4 July 2020, but the sector is not out of the woods and is still facing difficulties in recovering from the crisis
• BBPA has requested the British Chancellor, Rishi Sunak, to provide immediate help and support
• The position of the gambling sector has improved in some aspect, but a decline in overall participation has been observed

After the British Prime Minister, Boris Johnson, announced that the pub could resume their businesses from 4 July 2020, the sector re-opened in England amid a grand festivity mood. But the sector is not out of the woods and is still facing difficulties in recovering from the crisis. Though the industry has adopted precautionary measures to render safe services to its customers, yet the trading levels after re-opening remained low and is expected to remain the same until and unless the customers gain the confidence to go out of their houses and relax in the pubs.

The pub usually is a licensed institution which serves alcoholic drinks to be consumed in its premises. There could be different types of pubs based on the services they offer, such as gastropub, country pub, roadhouse, theme pub, micropubs, etc. Talking about Britain, pubs have been an essential part of their culture, mainly among the students. People visit pubs because it provides a sense of relaxation and a means to socialise and to have drinks. It's always fun to visit a pub, especially on weekends. The pubs in Britain started 2,000 years ago and are presently regulated under the Pubs Code etc. Regulations 2016.

Post- Pandemic Effect on Pubs

In order to prevent many businesses in the pub sector from collapsing, the British Beer and Pub Association (BBPA) has requested the British Chancellor, Rishi Sunak, to provide immediate help and support. They have asked the Government to take three major steps in the road to recovery to help their businesses overcome the crisis fully. The three steps involve- cutting of VAT to 5 per cent, extending the Business Rates Relief and a reduction in the beer duty by 25 per cent. BBPA believes that the pub sector can help the economy of the United Kingdom's to revive, provided they receive proper support from the Government's end.

Gambling another sector and impact of Covid-19 induced lockdown

Gambling has been one of the oldest and the main form of recreational activity in Britain, which started three centuries ago in the form of the horse race. It is presently regulated by the Gambling Commission under the Gambling Act 2005. Various types of gambling include bingo and casinos, gambling sports, lotteries, scratch cards, amusement arcades, etc.

The latest data released by Gambling Commission reflects that, there has been an increase in gambling activities such as real-event betting and sports betting for the month of May. While a decline has been seen in the overall participation, but, more time and money are being spent on certain gambling products by some engaged players. An increase of 17 per cent has also been reported in the overall average speed per active player for the month of May, as compared to that of April.

The total number of active players of the gambling sector per vertical:

(Source: Gambling Commission Release)

Let's have a look at the performance of some of the gambling and pub sector stocks.

Fuller, Smith and Turner PLC

FTSA is a British brewery based out of West London. It is a constituent of the FTSE All-Share index of London Stock Exchange (LSE).

Fuller, Smith and Turner PLC (LON:FSTA) stock was trading at GBX 740.00 on 8 July 2020, at 1:15 PM, down by 1.33 per cent from its previous close of GBX 750.00. The current stock price was reported to be 17.6 per cent higher than the 52-week low price, which was GBX 610.00 and 61.8 per cent lower than the 52-week high price, which was GBX 1,230.00. It was having a market capitalisation (Mcap) of £242.55 million. The volume traded at the time of reporting was 2,148. The company recorded a negative return on price, which was 21.88 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 0.8, indicating that the volatility of the stock is lower than the benchmark index.

Young & Co's Brewery PLC

YNGA is a brewery located in London and the South of England, having a total of 276 pubs. It is a constituent of FTSE AIM UK 50 index of LSE.

Young & Co's Brewery PLC (LON:YNGA) stock last traded at GBX 990.00 on 8 July 2020 down by 0.40 per cent. The 52-week low price of the stock was GBX 910.00, and the 52-week high price was GBX 1,690.00. It was having a market capitalisation (Mcap) of £341.84 million. The volume traded was 68,861. The company recorded a negative return on price, which was 38.17 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 0.9, indicating that the volatility of the stock is lower than the benchmark index.

888 Holdings PLC (LON:888)

888 provides online gaming entertainment and solutions. It is one of the constituents of the FTSE 250 index of LSE.

888 Holdings PLC (LON:888) stock was trading at GBX 174.20 on 8 July 2020, at 1:37 PM, down by 0.34 per cent from its previous close of GBX 174.80. The current stock price was reported to be 59.4 per cent higher than the 52-week low price, which was GBX 70.70 and 3.3 per cent lower than the 52-week high price, which was GBX 180.00. It was having a market capitalisation (Mcap) of £644.55 million. The volume traded at the time of reporting was 134,678. The company recorded a positive return on price, which was 5.68 per cent on a YTD (Year to Date) basis. The Beta of the company stood at 0.6, indicating that the volatility of the stock is lower than the benchmark index.

Flutter Entertainment PLC (LON:FLTR)

FLTR is a global betting and gaming operator. It is a constituent of the FTSE 100 index of LSE.

Flutter Entertainment PLC (LON:FLTR) stock was trading at GBX 10,820 on 8 July 2020, at 1:47 PM, up by 0.70 per cent from its previous close of GBX 10,745.00. The current stock price was reported to be 49 per cent higher than the 52-week low price, which was GBX 5,512.00 and 5.6 per cent lower than the 52-week high price, which was GBX 11,425.00. It was having a market capitalisation (Mcap) of £16,614.46 million. The volume traded at the time of reporting was 119,491. The company recorded a positive return on price, which was 13.70 per cent on a YTD (Year to Date) basis.