It wouldn’t be an update from JD Wetherspoon (JDW) without a monologue from chairman Tim Martin on Brexit and how the public has been “misled” on a subsequent rise in food prices. However, costs related to the new national living wage, higher business rates and utility bills are expected to rise significantly in the second half. While there aren’t any specific contingency plans in place, Mr Martin hopes higher sales will compensate. Price increases were authorised during the first half – mainly on food.
Like-for-like sales rose by 6.1 per cent, while operating profit improved 13.6 per cent to £74m, with the closure of some lower-margin pubs helping to boost the performance. The company shut 12 pubs and opened three over the period. Mr Martin said the company is making up for past “mistakes”, having previously opened too many pubs close to existing locations. This led to cannibalised sales – something Wetherspoon is rectifying with planned closures.
Analysts at Goodbody expect EPS of 71.9p in the year to July 2018, up from 50p in FY2017.
| JD WETHERSPOON (JDW) | ||||
| ORD PRICE: | 1,271p | MARKET VALUE: | £1.34bn | |
| TOUCH: | 1,270-1,274p | 12-MONTH HIGH: | 1,341p | LOW: 927p |
| DIVIDEND YIELD: | NA | PE RATIO: | 28 | |
| NET ASSET VALUE: | 221p | NET DEBT: | £756m | |
| Half-year to 28 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 801 | 39.9 | 27.8 | 4.0 |
| 2018 | 830 | 54.3 | 40.1 | 4.0 |
| % change | +4 | +36 | +44 | - |
| Ex-div: | 03 May | |||
| Payment: | 31 May |
