JD Wetherspoon (JDW) continues to generate good top-line growth, with like-for-like sales up 5.8 per cent over the year to July. The rate slowed to 3.1 per cent in the pub chain's final quarter, but this was expected because the European Championships boosted sales in 2012. The group has also managed 3.6 per cent like-for-like growth since the year-end, against a tough comparative period featuring the Olympic and Paralympic Games. Founder Tim Martin nonetheless batted down investor expectations, suggesting the underwhelming 2.5 per cent growth rate of the past fortnight as an "indicator for future sales growth".
Profits are another story. Wetherspoon is still prioritising growth over margins, which fell from 9 to 8.7 per cent at the underlying operating level. The reported fall in pre-tax profit reflects £19.8m of property losses (£13.5m in 2012), mostly reductions in the carrying value of underperforming pubs. The company has now made provisions of £47.6m against an estate that cost it £1.58bn to build. Strip these non-cash items out and pre-tax profit rose 6.3 per cent to £76.9m, buoyed by lower finance costs.
Broker Numis Securities expects pre-tax profits of £80.5m this financial year, giving EPS of 46.9p (up from £76.9m and 44.8p in 2013).
JD WETHERSPOON (JDW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 732p | MARKET VALUE: | £922m | |
| TOUCH: | 728-734p | 12-MONTH HIGH: | 774p | LOW: 457p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 171p | NET DEBT: | 221% | |
| Year to 28 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.96 | 45.0 | 18.2 | nil |
| 2010 | 1.00 | 60.5 | 29.3 | 12.0 |
| 2011 | 1.07 | 61.4 | 35.4 | 12.0 |
| 2012* | 1.20 | 58.9 | 35.6 | 12.0 |
| 2013 | 1.28 | 57.1 | 38.3 | 12.0 |
| % change | +7 | -3 | +8 | - |
Ex-div: 23 Oct Payment: 28 Nov *53-week period | ||||
