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Arguably against the odds the budget pub chain had a rather remarkable 2017.
Starting at £8.96 it climbed all the way to £12.62 by the end of the year, marking a colossal 41% increase over the 12 months. A large chunk of that growth came in mid-September, as Wetherspoons shot up after revealing a 27.6% surge in annual pre-tax profit to £102.8 million alongside a healthy 4% rise in like-for-like sales.
As for 2018, the stock’s performance has been a bit more inconsistent. It managed to hit a fresh all-time high of £13.20 towards the end of January, only to slump to a sub-£12 5 month nadir in early February. Yet since then Wetherspoons has undergone a sharp rebound, lifting back to a current trading price of £12.91.
The firm’s last couple of updates have shown a company dealing well with a difficult economic and consumer landscape. November’s first quarter report saw Wetherspoons post a robust 6.1% increase in like-for-like sales, lightyears ahead of the rest of the pub sector, with a 4.3% rise in total sales and an underlying operating margin of 8.6%.
January’s second quarter statement was just as solid, with a Q2 performance in line with Q1 leaving the firm’s interim figures as a 6% jump in like-for-likes and a 4.3% jump in total sales. It also led Wetherspoons to claim that its underlying pre-tax profit is ‘slightly ahead’ of expectations – the full year forecasts stand at around £101.2 million – something investors will be on the lookout for next Friday.
However, Wetherspoons did also state that the kind of performance it saw in the first half of the year would be ‘more difficult to achieve’ in the second, meaning the main driver of movement following the half year results may be based on the guidance for H2 than the numbers from H1.
J D Wetherspoon PLC (LON:JDW) has a consensus rating of ‘Hold’ alongside an average target price of £11.48.
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