Cheap supermarket booze put a dent in underlying growth at pub chain JD Wetherspoon with chairman Tim Martin warning that "the biggest danger to the pub industry is the tax disparity between supermarkets and pubs".
According to the latest figures from the British Beer and Pub Association, sales of beer through supermarkets outstripped sales via pubs for the first time in history last year. With its price-sensitive customer base, that shift is starting to show up clearly in Wetherspoon's figures. Although its like-for-like sales growth was 2.1 per cent over the year, the rate of growth has slowed sharply since the year-end to just 0.4 per cent in the past six weeks and unlike rivals it has failed to increase underlying food sales since 2008.
Inflation also meant that profitability came under pressure. While underlying operating profits climbed by 2.3 per cent to £102.3m, the operating margin fell by 50 basis points to 9.5 per cent as a result of higher bar, food, labour and utilities costs.
Broker Altium expects underlying full-year pre-tax profits of £66.7m and EPS of 33.4p (from £71m and 36.9p in 2011).
JD WETHERSPOON (JDW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 396p | MARKET VALUE: | £521m | |
| TOUCH: | 395-396p | 12-MONTH HIGH: | 473p | LOW: 384p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 130p | NET DEBT: | 256% | |
| Year to 24 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 0.89 | 62.0 | 31.8 | 12.0 |
| 2008 | 0.91 | 54.2 | 25.2 | 12.0 |
| 2009 | 0.96 | 45.0 | 18.2 | nil |
| 2010 | 1.00 | 60.5 | 30.2 | 12.0 |
| 2011 | 1.07 | 61.4 | 35.4 | 12.0 |
| % change | +8 | +2 | +17 | |
Ex-div:19 Oct Payment:23 Nov | ||||
