Misguided Into Administration - Who's Next?

[The Byre]

Massive new studio complex being built in Reading between m4 J10 & 11

UK Film and TV Studio | Shinfield Studios

Shinfield Studios - a new and hugely impressive 18 stage, film & TV studio complex. 18 sound stages, workshops, offices and backlot are open now.

www.shinfieldstudios.com

4 stages open, 5 more under construction – opening Q1 2023.
Full 18 stage Creative Media Hub open by 2024.

And they are not the only ones!

There is a real danger of over-supply if the present boom in TV projects and movies and series for streaming goes away! But right now, that market is making hay whilst the sun is shining. You could almost say that it is throbbing!

 

[Mark T Jones]

. You should see the demand around London and LA for studio space and crews. One studio is using large tents as studios to keep up with demand!

Several of which were financed through yours truly - kept me afloat during Covid!

It is another case of markets changing rather than actually dying.

Whilst the generic money-grabbing monstrosities like Cineworld are suffering, demand for more mature, or experiential cinema remains strong - that ranges from the full-on James Bond experience to simply offering leather sofas and a palatable glass of wine (at a price similar to a wine bar)

 

[Bob Morgan]

Asset stripping was big news in the '80s. It barely gets a mention now.

It has become Standard Operating Procedure!

 

[Bob Morgan]

Whilst we jest about Twitter, Facebook and Websites selling 'Online Tat,' a more ominous picture is presently emerging. Taylor Wimpey, Persimmon and Barratt are all reporting huge falls in House Completions. This has been compounded by recent 'Cancellations' as Rising Interest Rates take effect. Some developers will already be recording Weekly Sales in negative figures. Persimmon have even issued a 'Shareholder Warning.' Taylor Wimpey disclosed a 40% fall in completions.

Add to this, the 'Chaos' initiated by Gove and, Jenrick with regard to Planning Reforms - This has been perpetuated by a Cast of Thousands during the Johnson Swansong, the 40 Day Reign of Truss, and now Sunak. Yesterday saw the appointment of Lucy Frazer KC MP as (yet another) Housing Minister.

The situation is extremely complicated as Gove made previously unrelated pieces of legislation dependent upon each other. This not only covers Town Planning, but conflates Environmental Issues, Carbon Neutrality (Heat Pump Saga), Recent amendments to the Building Regulations, Community Infrastructure Levies, Son of Community Infrastructure Levies and Section 106 Planning 'Gain' Agreements - With different versions proposed for England, Wales, Scotland and Northern Ireland - What could possibly go wrong?

It should not be forgotten that the House-Building Industry is possibly the biggest benefactor the Tory Party have, and this has to be seen Nationally, Regionally and Locally!

 

[Talay]

Cineworld - cinema is discretionary spending and there is a great shortage of 'tentpole' movies as all the talent is getting drawn into streaming. You should see the demand around London and LA for studio space and crews. One studio is using large tents as studios to keep up with demand! But it's all TV and streaming work! Mainstream action movies and space monkey films are the usual fodder and they are largely missing, even now in the run-up to Christmas.

Right now it is supposed to be the quiet season for studios and it is anything but quiet - but very little is for the cinema release market.

The only film that is drawing a cinema audience at the mo is the Black Panther franchise. Cinemas are beginning to scrape barrels and remaster and rerelease old turkeys like Home Alone and
It's a Wonderful Life - and other dire examples of cheap and cheesy rubbish!

The Great White Hope for the cinemas is Avatar 2 - and a little bird has told me that it is boring and unlikely to have the massive success of Avatar 1.

Daughter and friends went to the cinema in Guildford last week. I had to do the taxi run there and back, presumably to "save" train fares (Clearly my SUV runs on air).

So they had a meal in town, probably bought some crap, went to the movie, likely bought more crap, got a free ride home.

Great day out but total cost was probably £25/40 a head and that buys a lot of pizza and snacks in front of a large screen TV even if you had to pay to rent the movie. Maybe £100 for 4 of them versus £30 in house.

I looked at going to London for a Saturday night and then looked at hotels, all half decent to decent stuff wanting £300/500/700 per room per night. Sorry but it is either a day trip or we don't go. Can't justify £1500/2000 for a day out and overnight.

 

[Talay]

Whilst we jest about Twitter, Facebook and Websites selling 'Online Tat,' a more ominous picture is presently emerging. Taylor Wimpey, Persimmon and Barratt are all reporting huge falls in House Completions. This has been compounded by recent 'Cancellations' as Rising Interest Rates take effect. Some developers will already be recording Weekly Sales in negative figures. Persimmon have even issued a 'Shareholder Warning.' Taylor Wimpey disclosed a 40% fall in completions.

Add to this, the 'Chaos' initiated by Gove and, Jenrick with regard to Planning Reforms - This has been perpetuated by a Cast of Thousands during the Johnson Swansong, the 40 Day Reign of Truss, and now Sunak. Yesterday saw the appointment of Lucy Frazer KC MP as (yet another) Housing Minister.

The situation is extremely complicated as Gove made previously unrelated pieces of legislation dependent upon each other. This not only covers Town Planning, but conflates Environmental Issues, Carbon Neutrality (Heat Pump Saga), Recent amendments to the Building Regulations, Community Infrastructure Levies, Son of Community Infrastructure Levies and Section 106 Planning 'Gain' Agreements - With different versions proposed for England, Wales, Scotland and Northern Ireland - What could possibly go wrong?

It should not be forgotten that the House-Building Industry is possibly the biggest benefactor the Tory Party have, and this has to be seen Nationally, Regionally and Locally!

This is all over egged - go look at the last few weeks of housebuilders share prices - up 15/20%.

Sure, prices have to drop a bit but we're not talking massive numbers. Why ? well, if your mortgage has gone from 3% to 5% and you owe £250k then that is only another £5k per year in interest. Raise the stakes from 2% to 6% on £500k and you have £20k extra in interest a year. Not to be sneezed at but if you can borrow £500k then you have at least £150/200k in equity and you earn £150k plus so an extra £20k is not going to put you in the poor house !

Even if we "accepted" the new long term norm was rates in the 0% to 2% range, which would be silly given the history of circa 7% interest rates over the last 50 years and that they would return to this utopia in the mid term, say within 5 years, then the extra cost of the £500k mortgage would be somewhere in the region of £50k to £75k on a property valued at £700k or so today.

Thus, the sensible maths would be that if it cost an extra £70k to buy that £700k property over 5 years before a return to "normal" interest rates, then the value should drop by a maximum of £70k or 10%.

Now I know real world maths doesn't work like this but talk of 20% or 30% price falls seems silly to me.

 

[Ecommerce&MailOrderGuy]

Joules into administration today.
So sad for all involved. At least the jobs market seems robust for those made redundant.
Think there will be many more to come unfortunately.
Who next?

 

[MOIC]

Joules into administration today.

Their ranges are/were a bit staid.

You have to be quick in fashion not to be caught out.

 

[Bob Morgan]

Mike Ashley is sniffing around! - But, a little incongruous to be asked " . . on which side does Sir dress?" when buying Ashley's Asbowear

 

[fisicx]

Givers and Hawkes to be taken over by Frasers. Maybe not a high street name but indicative of how things are going.

As soon as trade credit insurance gets a whiff of trouble they pull out and it all comes tumbling down.

There is a good chance one of the supermarket chains could be in trouble soon.

 

[Bob Morgan]

There is a good chance one of the supermarket chains could be in trouble soon.

Only one?

 

[Ecommerce&MailOrderGuy]

Given that ocean freight from China to UK was still at high demand/high cost as recently as June it would suggest that retailer Christmas goods stockholdings are high?
(freight rates have now collapsed from $8000 to $2500 in just 2 months).
Now it is the critical 4 weeks for many retail businesses.
UK inflation announced this morning as 11.1%
My summer seasonal business is holding steady but we're in our 'off' season.
I wonder what demand is like out there?
I hear reports suggesting demand for Christmas goods is buoyant.....but is that consumers buying early to spread the cost?????

 

[Ecommerce&MailOrderGuy]

"People are spreading their Christmas purchases across three or four pay days, rather than relying on cash that they have in hand in December," George Weston, the CEO of Primark-owner Associated British Foods

Katie Bickerstaffe, joint M&S CEO, told reporters that its customers had already bought about 30% of their clothing and homewares Christmas gifts.

Maybe Christmas '22 will be ok for retailers?

2023 not so much

 

[MOIC]

Unpredictable retail forecasts, chain buyers guessing quantities to order and erratic supply chains is a recipe for disaster for the fashion business (as well as other products).

 

[Ecommerce&MailOrderGuy]

Not much news in the UK regarding an update on state of Christmas retail sales.
Probably a case of keeping 'fingers crossed' that all will be ok and a consensus to talk things up as much as possible.

Stateside they seem to be a bit more on the pulse of things.
Target the huge discount store chain has reported bleak news last night:

Target said it had observed a deterioration in consumer demand ahead of the busy holiday season, triggering a 15 per cent drop in its share price and a sell-off among rival retailers.

“Spending patterns changed dramatically” at the end of the third quarter, chief growth officer Christina Hennington told analysts on an earnings call on Wednesday, slowing as consumers have limited funds for discretionary purchases such as clothing and housewares, and even some household essentials. Customers “are feeling increasing levels of stress, driven by persistently high inflation, rapidly rising interest rates and an elevated sense of uncertainty about their economic prospects,” Cornell said during the call. “Many consumers this year have relied on borrowing or dipping into their savings to manage their weekly budgets,” he continued, but “those options are starting to run out” for some, making them more price sensitive and hesitant to buy full-price items.

When you think that things are much worse for consumers in the UK (higher inflation, higher energy costs) this suggests it won't be long until we hear very bleak reports from the high street (and online).

If it's anything like my summer market I'd expect bargains to be had for consumers as retailers rush to restore cashflow.