JD Wetherspoon (JDW) delivered strong top-line growth during its second quarter, reporting a 6.7 per cent increase in like-for-like sales. But a decline in operating margins by 20 basis points to 8.1 per cent disappointed analysts.
IC TIP:
Buy
The company’s squeezed margins have been a long-running concern for investors, falling from an average of 12 per cent in 2007 to their current level. However, the group’s leasehold estate is more robust than freehold models as pub owners now face pressure to offload properties in a bid to pay off debt.
