Ahead of JD Wetherspoon’s full-year update next Friday, leading analyst Nick Batram at Peel Hunt has said that “life doesn’t get any easier” for the group and expects adjusted operating profits to have slipped back.
He said: “Trading should have picked up in February, but JDW is running out of margin to lose. Cost pressures don’t look like abating and the justification for a low dividend pay-out is becoming more difficult as returns on investment decline.
“Life doesn’t get any easier for JDW, with the seemingly unstoppable margin erosion the main feature of H1.
“We are expecting adjusted operating profits to slip back to £54.3m (£55.7m), representing an operating margin of 7.3% (8.2%) on c9% total sales growth.
“LFL sales slowed into Q2 (2.8%) and exited at 2%, with LFL for H1 likely to be around 4.6%.”
