The good old pint and a pie is still in demand despite the recent weak update by sector bellwether Greene King (GNK). Sector peer JD Wetherspoon (JDW) bucks the negative trend by reporting full year results towards the top end of expectations.

Analysts upgrade their pre-tax profit forecasts by up to 4% for the next few years and its shares jump nearly 10% to £11.42.

The company is benefiting from pushing up prices and consolidating its customers into fewer sites as Wetherspoon continues to sell its weaker pubs.

jdw chart

Like-for-like sales were up by 4% for the 53 weeks ending 31 July. Total revenue was up by the same amount to £1.66bn. Pre-tax profit before one-off items hit £102.8m versus £80.6m a year earlier. Interestingly there is no growth in the dividend as Wetherspoon maintains a 12p per share payment.

Investment bank Investec has upgraded its pre-tax profit for the new financial year by 1% to £96.4m and says there is potential for further upgrades given a strong start to the trading period. Like-for-like sales are up 6.1% in the first six weeks of its current financial year.

Investec also raises pre-tax profit estimates for the 12 months to 31 July 2019 by 4% to £99.2m.

It is worth noting that both the next two financial years are expected to produce profit lower than in 2017 despite today's earnings upgrades.

‘JD Wetherspoon continues to outperform the UK pub sector - we believe benefitting from its value offering and well invested pub estate.

‘Whilst the UK consumer backdrop remains unfavourable, in our view JD Wetherspoon is potentially benefitting from trading down within the sector and, as a result, taking market share,’ says Investec analyst Karl Burns.

Anyone reading Wetherspoon’s results statement should be prepared for extensive commentary by chairman Tim Martin on Brexit rather than insight into eating and drinking trends among the UK public.

Elsewhere, investors will enjoy Wetherspoon’s summary of its accounts since July 1984. We’ve reproduced the table here.


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Issue Date: 15 Sep 2017