Travel Takes Off – What’s happening in the travel market?

Susannah Streeter: Hello, and welcome to Switch Your Money ON, from Hargreaves Lansdown. I’m Susannah Streeter, I’m Head of Money and Markets at Hargreaves Lansdown. And I’m with Sarah Coles, as usual, our Head of Personal Finance.

So, Sarah, not long to go now until the Easter Holidays, which I know for both you and I, is going to be dominated by forcing a reluctant teenager to revise for exams.

Sarah Coles: It’s just not going to be any fun at all it is? It’s going to be a staycation in the worst possible way, but increasingly we’re the exception to the rule, because despite all the pressure of rising prices, people are still determined to get away. So that’s what we’re turning our attention to in this episode, which we’re calling Travel Takes Off. Of course, we’ll also be touching on the turbulence in the banking sector right now.

Susannah Streeter: But before we do, it’s certainly fair to say that the travel sector has gone through a storm over the past few years, with Covid outbreaks and restrictions, China’s ongoing curbs, and then worries about the cost-of-living crisis weighing on the sector, but it appears we might be through the worst of the turbulence with demand for seats on airlines, rooms in hotels, and sun loungers in resorts recovering. Global air traffic is forecast to rebound to pre-pandemic levels by the middle of this year, according to industry forecasts, although there could still be some weakness in certain part of the sector. We’re going to be talking to Sophie Lund-Yates about the outlook for some of the companies operating here, Sophie you’re covering everything from staycations to overseas this episode aren’t you?

Sophie Lund-Yates: I certainly am, we’re going all over the place really, looking at a staycation specialist, as well as an airline.

Sarah Coles: Well thanks Sophie, we’ll look forward to delving into those companies later. We’ll also be having a quick chat to Laura Hoy, an ESG analyst at HL, who looks at environmental, social and governance issues. So, Laura, there are some environmental considerations when it comes to travel aren’t there?

Laura Hoy: Yes, you’re absolutely right. The travel sector comes with some unique risks that are definitely worth looking into if you’re a long-term investor.

Susannah Streeter: Looking forward to hearing more about that later Laura. Plus, we’ll speak to Julia Lo Bue-Said, whose the Chief Executive of the Advantage Travel Partnership, the UK’s largest independent travel agent group, about how they’re navigating the challenges and what the future holds, so Julia, you must be facing one of your busiest times right now.

Julia Lo Bue-Said: Absolutely, we’re coming up to the very busy Easter bank holiday, so it’s always busy this time of year.

Sarah Coles: Well, we look forward to hearing much more about how the travel business is really being affected by all this change. Plus, Emma Wall will be talking to Jacob de Tusch-Lec from Artemis fund managers about a number of companies, including airlines and resorts. But talking about turbulence, it has been a pretty bumpy ride for the financial sector in recent weeks and we can’t move on without covering a little of what’s been happening.

Susannah Streeter: Yes. It certainly has been a tumultuous week or so for financial markets and the banking sector, leading to the takeover of Credit Suisse and repercussions are ongoing. So, let’s just take you back… Now you may remember that on Friday, 10 March, Silicon Valley Bank, also known as SVB, was closed by regulators, marking the largest US bank failure since the Global Financial Crisis in the late 2000s and the second largest in US history. After the news broke, trading in SVB's shares was halted. And we saw some pretty bold regulatory support in the US, guaranteeing all depositors’ money and the purchase of the UK SVB arm by HSBC, which did quell fears of a wider tech crunch. But later in the week, Credit Suisse became the focus of concern. It was on life support and Swiss authorities believed only a full transplant of the banks divisions into UBS would restore stability to the banking system. But an operation of this magnitude is a significant risk for UBS and that’s why it was only willing to pay just over $3 billion, less than half the price its shares valued the bank just before the rescue.

Sarah Coles: Yes, the speed at which the 167-year-old institution, deemed too big to fail deteriorated has rocked the banking sector. Central banks have taken rear guard action to reduce the risks of contagion. So, they’ve co-ordinated currency swaps to enable the smooth flow of money around the world, to ensure financial institutions can easily tap into the dollars they need to operate. The question is what happens next?

Susannah Streeter: Yes, focus is shifting to the implications of high-risk bond holders in banks, after holders of more risky Credit Suisse debt saw their investment wiped out as under the deal those additional tier 1 bonds were valued at zero. In bankruptcy proceedings, bond holders are higher up the queue than shareholders, but under the circumstances, the same rules don’t have to apply. It is not yet known exactly where more pain will emerge in the banking sector, but investors fear the problems are not yet over. Shares in a number of big banks fell.

Sarah Coles: Bigger lenders are still considered to be much better insulated. They have built up much bigger capital cushions since the financial crisis and have more stable deposits. They are also much less likely to have to sell off bonds, they may have a paper loss right now, but instead will be able to hang onto them until they mature. The Bank of England said the UK banking system is well capitalised and funded and remains safe and sound. And UK banks are also in a much stronger position than many years ago, with more cash reserves to meet regulatory capital requirements. It’s also useful to remember that cash deposits have some protection. So, the Financial Services Compensation Scheme is an independent organisation, which can step in to pay compensation if banks, fail, so the first £85,000 you hold with any one institution is completely protected. But as risk aversion grips the sector, a big worry is that overall banks will become more cautious in their lending, and worries are rattling investors about what repercussions a potential lending squeeze will have on the global economy.

Susannah Streeter: So, it’s not surprising given all this volatility that you might want to head away from all the turbulence in the financial markets, and come back to travel. It probably won’t surprise you that a big travel exodus has been underway. Thanks to a super-busy half term holiday and the lifting of travel restrictions in China. Heathrow airport exceeded passenger levels for the first time since 2019 in February. In fact, they can pinpoint it to one day February 26, that saw the biggest day in Terminal 5 since Christmas 2019.

Sarah Coles: But while we’ve come a long way since the depths of the pandemic, the most recent figures from the Office for National Statistics in September last year showed overseas visits were still down more than 10% since the onset of the pandemic. The cost-of-living crisis will have played a part, as will the value of sterling, which means spending on overseas trips is higher, despite us taking fewer of them. And the cost of travel has also risen more widely. So, inflation figures for January show that the cost of flights is up by almost a fifth in the past 12 months, and the cost of package holidays is up on average almost 11%. And that could be enough to persuade some people to holiday closer to home. So, Visit Britain statistics show that almost three quarters of us are planning an overnight stay somewhere else in the UK in the next 12 months, while around a half are planning a trip overseas. They also noted we’re still keener to holiday at home than we were before the onset of the pandemic. Unfortunately, for those staying in the UK, things aren’t much brighter, with the cost of hotels up by almost a fifth.

Susannah Streeter: In terms of inbound tourism, things haven’t returned to pre-pandemic levels either. Visit Britain expects there to be over 35 million visits to the UK this year, but while this is more than 2022 – it’s only 86% of the level seen in 2019. And while they’re expected to spend a record £29.5 billion, after inflation this is also down from pre-pandemic levels. There are plenty of forces at work in the industry, what does all this mean for companies operating in the sector? Well, this does feel like a good time to bring in Sophie Lund Yates, our lead equity researcher.

So, Sophie, we know that travel trends have changed massively in the last few years, and you’ve been taking a deeper look into them haven’t you?

Sophie Lund-Yates: Yes, I have, and I think really it makes a lot of sense to look at Airbnb, which has definitely been on a rollercoaster ride since it listed in 2021. The company’s been going since 2007 and now has over 4m hosts in over 100,000 cities and towns, and there have been around 1.4 billion guests. So, there’s no denying Airbnb’s scale and its attractiveness for holidaymakers, but that on its own you know doesn’t mean it’s a good investment. I’ve been having a look at things from that perspective and one of the things to mention is the group’s valuation. It’s tough to look at a price to earnings trend because the pandemic really skewed things, but looking at how much the market is prepared to pay per $1 of sales, Airbnb’s valuation has come down a long way, but it’s certainly not in value territory. There’s a lot to like about the business, especially when you take recessionary fears into consideration. I think, you know, if we see people pull back on more extravagant spending, we could see more people choose shorter and domestic getaways which would be a benefit for Airbnb. It’s also free cash flow positive, which can be unusual for younger high-growth companies and adds a layer of resilience. I mean at the same time, looking longer-term, I question growth potential. You know at some point the market for Airbnb’s will become saturated. I don’t see a world where hotels become obsolete, so that puts a lid on things. I think there’s room to run for now, but it’s something I’ll keep an eye on. For a bit of extra context, Airbnb had revenue of $8.4bn and underlying cash profits, which you might see abbreviated as EBITDA of $2.9bn last year.

Sarah Coles: So that’s looking at where people might choose to stay, but what about getting there?

Sophie Lund-Yates: That’s a very good question, you’re right, travel is of course a crucial component of any trip, and with this week’s theme in mind I’ve been having a look at National Express. I doubt many of us have been compelled to think about the investment profile of National Express when we’ve been sitting on a coach but that’s what I’m here for! So, National Express has annual revenue of around £2.8bn and underlying operating profit of just under £200m. Now in terms of longer-term growth opportunities, as we pivot towards lower car usage and at the moment where trust in trains is pretty low, I think there’s a lot to like about National Express, you know it has a strong brand, it is a vital service for many people, not to mention it’s a more affordable way to travel, which is obviously important at the moment. Now, the group’s debt levels are problematic though, and net debt is approaching £1bn. So, this is a situation made worse from the fact 20% of National Express’s net debt is exposed to fluctuating interest rates, so higher rates make repayments a lot more expensive. There are a few things National Express can do to deleverage, so reduce debt, and that includes potentially selling its North American business, which might be necessary, but would also be a shame. You know, I view that as an attractive market. National Express has a school bus network in the states which is a fun fact for regular UK users! Wage disputes and associated costs in the UK are also a potential headwind. Now ultimately, and for a few more reasons, I don’t have time to dig into on here unfortunately, I think National Express has a lot going for it, but it’s tough to get too excited until the balance sheet’s sorted out.

Susannah Streeter: Thanks Sophie, really interesting to hear about National Express, but we can’t do a travel episode without talking about an airline, so who have you been looking at here?

Sophie Coles: I’ve been digging into Delta airlines. So, the US’s Delta is one of the world’s largest airlines, with a global network covering 275 destinations and over 4,000 daily flights. Now, this aviation giant started life as a US crop-dusting operation in 1925, and then operated the first international mail and passenger route on the west coast of South America. Fast forward to today, Delta’s exposure to domestic travel is noteworthy. And domestic travel in the US is very competitive, which means Delta does face pricing pressure. This will probably be more acute over the near term. But it’s also well known for having a good business-travel proposition, compared to some rivals. Now this makes Delta stand out. It has a higher proportion of capacity at sought-after hubs compared to other carriers, and that matters when you’re going after business travel. Now, Atlantic and Pacific travel has seen a strong rebound in travel following the restrictions lifting too. Of course, a steep economic downturn in the US especially could see a downturn in demand for Delta’s services, so that’s something to keep in mind. Ultimately, I think Delta Airlines is one of the better placed names in its sector. Its domestic business focus is a real benefit. Those strengths are reflected in a forward price to book ratio, which compares a share price to the value of a group’s assets of 2.23.

Susannah Streeter: Thanks Sophie, plenty of companies to keep an eye on in this sector. But let’s dig a but deeper into what it’s actually like operating a travel business right now, and speak to Julia Lo Bue-Said, who’s the chief executive of the Advantage Travel Partnership, the UK’s largest independent travel agent group. So, Julia. How robust has demand been during the cost-of-living crisis?

Julia Lo Bue-Said: I think it’s quite interesting , if you look at the business in one lens and you look at the kind of macro-economic climate out there, one could quite easily conclude that it’s going to be affecting the travel industry. However, what we’ve seen is the desire to travel has been quite phenomenal coming out of the pandemic. We cannot see, and have not seen as yet, the correlation between the cost-of-living crisis and consumers’ desire to want to travel internationally. It’s been a really successful period – albeit, you know, two years of no trading doesn’t make up for six months of a very busy period, but the desire to travel is really high. Pent up demand is significant and we’re seeing that continuing right through to the end of this year.

Sarah Coles: And do you think there are various groups that are particularly keen to travel or are you seeing it everything from families to older people, and younger people as well?

Julia Lo Bue-Said: It’s a real mix. We are absolutely seeing multi-generational families traveling and a lot of research that we’ve seen really points to the fact that families haven’t spent time together the last few years and they’re really wanting to take advantage of it. You know grandparents, purse of grandparents spending out on family, taking grandkids with them. We’re seeing that market really coming back strongly but even right across all the different demographics from young families, young couples, singles, right the way through to bucket list holidays.

Sarah Coles: So, in terms of the kinds of breaks people are taking, has it changed those. Are people looking for further afield, a bit more adventure, or are they willing to spend a bit more money?

Julia Lo Bue-Said: They are spending a bit more money. What we are seeing of particular interest is all inclusive holidays have grown phenomenally. Part of that is it’s very easy to budget. You know, what you pay before travel, you won’t be paying any more when you’re out there other than some spending money, so that’s a real great opportunity to be able to accommodate people that are on a budget and more and more of our partners that we work with are able to provide that type of product, but we’re also seeing cruising has grown phenomenally very popular, again it’s really easy to be able to budget on a cruise holiday.

Susannah Streeter: What about currency movements, are they pushing up the price of holidays?

Julia Lo Bue-Said: Like we are seeing at home, you know cost of travel has increased, you know we are seeing rises right across the board, no matter where you want to travel to, prices have increased. However, there are some really great offers and deals around there so it’s not pricing people out of the market that’s for sure. But we are seeing cost increases: oil, fuel, accommodation costs, labour costs, operational costs have all increased and affecting the travel industry as much as it has on a domestic setting too.

Susannah Streeter: Do you think people are prepared to take this on the chin?

Julia Lo Bue-Said: I think that’s a really good question. If you look at it in one lens and you say well actually very difficult economic crisis, cost of living, people would be thinking about how much they’re spending. It will start to waver interest, but actually we’re not and you’ve got some really fantastic travel agents who are talking to their consumers. How do they make their pound go further? Where can they travel to that they can get better value?

Sarah Coles: Are there some destinations that are sort of becoming more popular as maybe as more cost-effective options?

Julia Lo Bue-Said: Yes, there are we’ve seen destinations such as Slovenia, Estonia, and actually even Bulgaria that still offer exceptional value for money when you’re out in destination. The volume isn’t as great as you would expect for somewhere like Spain or Italy, but certainly these destinations are up and coming. There are more flights made available from the UK. When you’re there, the spending power of your pound, even with the euro, is still exceptionally strong.

Sarah Coles: So, are you seeing then a bit more demand for breaks maybe closer to home within the mix?

Julia Lo Bue-Said: Holidays closer to home, unfortunately, despite what we may think tend to not always demonstrate the best value. And also, product is quite limited, so for example if you want to go down to our beautiful coastal regions in the summer, what we tend to find is unless you’re booking months in advance it’s very unlikely that you’ll find accommodation, because we don’t tend to build lots of new hotels every summer to accommodate any potential increase in demand.

Susannah Streeter: How concerned are you about the impact of strikes on international travel?

Julia Lo Bue-Said: We are concerned, and we’re concerned more around the optics around what this means, and I think for a lot of people who probably haven’t travelled over the last 12 months or since we’ve come out of the pandemic, are still a bit anxious. There are lots of changes not only since the pandemic but also since Brexit and you know pandemic masked a lot of the Brexit changes for travel, so passport changes. So, when you’ve got lots of change, lots of things that people need to get used to. You’ve got headlines around strikes and the impact that may have, it does create uncertainty and what we really want to try and do is ensure that people don’t have to be stressed when they’re thinking about traveling, so yes strikes clearly do create disruption. However, airports and ports have put in place contingency measures to really try and avoid any disruption for travellers.

Susannah Streeter: Thanks Julia. Some really interesting forces at play in the market. Of course, when we’re thinking about travel companies, including airlines, we can’t overlook the environmental risks, and Laura Hoy, our resident ESG analyst is here to give us an overview of what to look for. So, Laura what are some of the risks investors should be mindful of?

Laura Hoy: When we’re talking about investing in travel stocks, aviation is kind of the obvious one that comes to mind. The emissions from a flight across the pond are more than twice what a family car would produce in an entire year. So, airlines are really under pressure to find ways to trim their emissions. Now, the good news is that fuel costs make up about a third of most airlines’ operating expenses, so cutting down is also good for the bottom line—so there’s added incentive to improve fuel economy. Now there are a few ways to do that, but the most bang for your buck right now comes from updating your fleet of aircraft to be more efficient. And that can mean things like flying more people per-plane, using lighter materials, and more efficient systems that reduce fuel burn.

Sarah Coles: So, are there any airlines that stand out when it comes to this sort of fuel management?

Laura Hoy: Yes, so EasyJet is actually an industry leader here. The group’s shown an impressive commitment to reaching net zero and it’s been working to overhaul its fleet as part of that. Now, they’re not only buying new, more efficient planes, but they’re also upgrading their existing fleet with lighter, and space-saving seats. And IAG, which owns British Airways is another leader. Their fleet is a little bit older than most of their peers, so there’s a lot of work to be done, but they’ve also been working on incorporating sustainable aviation fuel as part of their net zero strategy. Now that’s a biofuel, so it has the potential to cut emissions dramatically. However, for now it only makes up a small proportion of the fuel that’s being used.

Susannah Streeter: Really interesting, Laura. So, airlines are the obvious one, but is there anything to consider when it comes to accommodation for example?

Laura Hoy: Hotels also require a fair bit of energy, so it’s of course important they’ve got a good net zero plan in place. But from an ESG perspective it’s actually the G for governance that we’re most concerned about when it comes to risk in the sector. So specifically, we’re looking at guest health and safety, which plays a key role in building trust and confidence in a particular brand. So, that means regular training, clear health and safety management policies, and that they’re encouraging accountability. Hilton and Accor, which owns the Ibis, are two brands that do this really well.

Sarah Coles: And what about labour relations? So, given the cost-of-living crisis and inflation, a lot of these businesses employ minimum-wage employees, don’t they?

Laura Hoy: Yes, you’re absolutely right, and you know minimum wage is a legal requirement, but companies that go a step above with higher pay and better benefits are going to have happier, more productive employees and less turnover, which at the end of the day is going to be the cheapest option for them. InterContinental Hotels Group is doing this really well, they’ve got a pretty comprehensive skills and training programmes as well as a mentoring scheme, that seems to be benefitting their employees.

Sarah Coles: Thank you so much Laura, it’s always interesting to consider this aspect of any sector, and plenty to think about there. I should also add that a Non-Executive Director of Hargreaves Lansdown plc is also a Non-Executive Director of Intercontinental Hotels Group. Now, I’d like to bring in Emma Wall, our head of investment research here at Hargreaves Lansdown. She’s being speaking to Jacob de Tusch-Lec, a fund manager with Artemis.

Emma Wall: Hi Jacob

Jacob de Tusch-Lec: Hey Emma

Emma Wall: So, the Easter holiday is approaching. Hence why we are talking about travel, and you have a number of different plays on the sector don’t you? Let’s kick off with why you think this is a good long-term investment as a sector.

Jacob de Tusch-Lec: The starting point is that there’s a lot of pent-up travel demand, so the demand side is there unless the economy deteriorates a lot people do want to go on holiday. Household balance sheets are in decent shape, and people have not been on holiday, so there’s a deficit of holidaying, and also there is the whole Asian angle to it, that China was closed until very recently, so things like Macau have been closed for a while, and therefore there’s a lot of sort of both business travel but also for visiting families, but on the other side there is also the attraction that what Covid did and the supply chain disruptions did and what the sort of new world order has done is that there is a little bit of chaos everywhere, when China closed down for example, a lot of airlines in the US let their pilots go. Now there is a deficit of pilots in the US. You’ve got to train them again. You know, you can’t just mothball certain sectors and routes for a number of years and then turn back on and get up to speed again. That’s interesting for some companies because those who are strong can sort of start with a clean sheet of paper and say, what do we want to do? What kind of market share do we want to take? What kind of margins do we want to have? And some of the companies that we own are sort of the ones we think are going into this from quite a strong point of view.

Emma Wall: Let’s come on then to some of those businesses that you own in the portfolio. Kick off with the first stock you want to highlight today.

Jacob de Tusch-Lec: A recent addition to the portfolio, Singapore Airlines, which is traditionally a good airline. They will benefit from reopening in Asia. They will benefit from the fact that they did not fire their pilots during Covid. They are now getting them back. They will benefit from the fact that they are a sort of a national champion. A lot of their investor base is local. The biggest shareholder is a local sovereign wealth fund, and what they can also benefit from is that they have the planes, they have a strong balance sheet and a lot of the easy money… there’s a theme we talk about in many sectors is that when rates are zero, money is sloshing around the system. Rates are no longer zero, speculative capital is no longer as visible as it was, so a lot of the competitive threats that they had low-cost airlines or speculative airlines, they are gone and you have a more disciplined market. They’re cancelling some routes that they don’t see demand for today, and opening up new ones, with a reopening theme going on while they rethink where the routes are etc. So, for us Singapore airline is one way of getting exposure to China reopening, exposure to the travel theme and do it via a company that might also have an additional competitive advantage versus where they were maybe before Covid.

Emma Wall: So that’s one element of travel. You get on your plane. You fly to your destination. What happens when you get there? How are you playing the leisure theme, the hotel theme? Have you got any of that in the portfolio?

Jacob de Tusch-Lec: We don’t have a lot because you ultimately don’t want to over-expose yourself and we thought the airlines were the first bit. To go to a hotel, you have to go on an airline, but we do have exposure to Macau in China and that is maybe a bit more… not stock specific but specific on China. China is reopening. The Chinese households have been saving money for a number of years. It’s very hard to spend money when the economy is closed down, and we saw when the US reopened after Covid, which is now a while back, there was a massive rush of consumer spending and that’s why we got all these inflation problems. You know people had jobs, they spent a lot of money etc. Well one could maybe think they’ll be some kind of similar reopening effect in China and Asia, and we haven’t seen that yet. It’s really starting slowly, so we thought one way of getting exposure to that was to invest into the sort of leisure, hotels, casinos in Macau.

Emma Wall: And for those people who are unfamiliar with the regulation. The reason why Macau is a destination is because actually gambling is forbidden in mainland China isn’t it?

Jacob de Tusch-Lec: Absolutely, so this is an old Portuguese area and it sort of has its own bit of legislation around it, not to say that it’s not governed in a very strict way, but there’s a bit of a social contract, let’s put it like that and you got high-end stakes players and you’ve got more touristy people who just go and spend a little bit of money but it is sort of a destination.

Emma Wall: It’s like the Chinese Las Vegas isn’t it, because you get shows and waterparks.

Jacob de Tusch-Lec: And there are conferences there and a bigger and bigger part of the revenues of these companies are sort of the conferences, the hotels, the restaurants, the shows, and less and less the actual sort of what you make on the casino table, although I would say the house always wins, but that’s not really where…. That’s why people go there, and it is sort of broadening out a bit to the middle classes etc. Look, I don’t know if this is a theme we would run for years and years, but you would think that when the reopening happens that there is a little bit of a sort of… we call it champagne effect, that it sorts of shoots out and there should be a bit of a pop in travel there, so that’s another one that we have exposure to, and again without being too specific, you know as you say the regulatory environment licences were recently re-negotiated so there’s a bit more certainty about how long the licences last, who has them, and that’s what you need to invest in new hotels and hotel rooms etc and you have that now, so we thought again for the sort of early exposure that was a good play.

Emma Wall: Jacob, thank you very much.

Jacob de Tusch-Lec: Thank you.

Susannah Streeter: Well, that was Emma Wall, talking to Jacob de Tusch-Lec, from Artemis, and please bear in mind these are the views of the fund manager and are not individual stock recommendations. You’re listening to Switch Your Money ON from Hargreaves Lansdown And now it’s time for the stat of the week. And we’ll stick with travel, and more specifically Nationwide’s spending figures. Apparently, by the end of February two in five people had already booked their summer holiday, but who do you think was the quickest off the mark with a booking?

Sarah Coles: Well, normally I’d say people in their 40s, because they’re forced to stick to really expensive school holidays, so I reckon they’re getting in there really early with the early bird discounts, but what’s the answer? Go on tell me.

Susannah Streeter: Hmm, you’re not quite right. It’s actually those aged between 18 and 34, half of whom have booked their holiday - presumably for a slightly better off-season bargain. I’m very jealous. In fact, I’m just too busy to think about booking holidays.

Sarah Coles: Yes, absolutely, me too.

Susannah Streeter: Well, that’s all from us this time, but before we go, we need to remind you that this was recorded on 20 March 2023, and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice, you should seek advice if you’re not sure what’s right for you. Unlike the security offered by cash, investments rise and fall in value, so you could get back less than you invest.

Susannah Streeter: Yes, this is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that’s left is for me to thank our guests, Julia, Jacob, Sophie, Laura, Emma and our producer, Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. We’ll be back again soon, goodbye.