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    JDW   GB0001638955

J D WETHERSPOON PLC

(JDW)
  Report
Delayed London Stock Exchange  -  11:35 2022-11-25 am EST
463.00 GBX   +0.17%
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UK's Wetherspoon to slip into the red amid 'laborious' pub recovery

07/13/2022 | 02:21am EST

* Wetherspoon expects annual loss of 30 mln pounds

* Flags higher labor and marketing costs

* Group says recovery has been slow and laborious

* Shares hits lowest levels since start of pandemic

July 13 (Reuters) - Britain's J D Wetherspoon warned of losses this year as costs for labor, repairs and marketing eat into its bottom line, and said 'natural beer drinkers' belonging to an older population were staying away from pubs, hurting its sales.

Shares in Wetherspoon, which had earlier expected to break even this year but now sees an annual loss of 30 million pounds ($36 million), were down nearly 8% on Wednesday, hitting their lowest since the beginning of the COVID-19 pandemic.

The pandemic-hit pubs, whose numbers have hit a record low in England and Wales, have been struggling with costs, lower consumer spend and increasing competition from supermarkets.

The recovery in pub sales for many companies had been "slower and more laborious" than expected, Wetherspoon said.

A fall in beer sales from 2019 levels can probably be attributed to working from home, people stepping out less during the day, and health concerns among older people, Wetherspoon Chairman Tim Martin told Reuters.

Martin has been an outspoken critic of Britain's handling of the pandemic and believes the long-term challenge for the pub industry continues to be the tax disparity with supermarkets.

"The difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought," Hargreaves analyst Matt Britzman said.

Wetherspoon, owner and operator of over 800 pubs in the UK and Ireland, said sales of draft ales, lagers and ciders, once its largest contributors, were 8% below 2019 levels.

"When pubs were closed people probably got used to staying in. We're probably more inclined to be creatures of habit than we realize," Martin said.

Often referred to as "Spoons" by its younger clientele who consume more spirits and cocktails, Wetherspoon said its like-for-like sales for 11 weeks of its fourth quarter to July 31 were 0.4% lower than in the same period of 2019.

The company, which is fully staffed barring minor exceptions, said it has contracts for energy supplies until the end of 2023 at fixed prices to battle the spike in energy costs.

($1 = 0.8405 pounds) (Reporting by Sinchita Mitra and Yadarisa Shabong in Bengaluru; Editing by Krishna Chandra Eluri, Bradley Perrett and Jan Harvey)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
J D WETHERSPOON PLC 0.17% 463 Delayed Quote.-51.82%
MARSTON'S PLC 0.95% 40.22 Delayed Quote.-47.77%
MITCHELLS & BUTLERS PLC 0.77% 144 Delayed Quote.-43.75%
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Analyst Recommendations on J D WETHERSPOON PLC
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Financials
Sales 2023 1 850 M 2 236 M 2 236 M
Net income 2023 32,0 M 38,7 M 38,7 M
Net Debt 2023 1 210 M 1 463 M 1 463 M
P/E ratio 2023 18,0x
Yield 2023 0,31%
Capitalization 587 M 710 M 710 M
EV / Sales 2023 0,97x
EV / Sales 2024 0,90x
Nbr of Employees 42 748
Free-Float 74,7%
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Mean consensus OUTPERFORM
Number of Analysts 13
Last Close Price 463,00 GBX
Average target price 635,00 GBX
Spread / Average Target 37,1%
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Managers and Directors
John Hutson Director, Chief Executive & Operating Officer
Ben Whitley Director & Finance Director
Timothy Randall Martin Non-Executive Chairman
David Capstick Director-Information Technology & Property
Martin Geoghegan Operations Director
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