Leading City analyst Paul Hickman expects last month’s riots to have dented like-for-like sales for managed pub operator JD Wetherspoon by 2% for the five weeks since the end of July. Issuing a Buy recommendation for JDW, Hickman, of Peel Hunt, said this may “spook” the company’s share price enough to “provide an opportune entry point into this reliable operator”. Hickman said: “If there is one pub company that is calculated to have been disrupted by the August riots, it must be Wetherspoon. Not only are its pubs uniquely concentrated in town and city centres, but its management also takes pride in its responsible place in society and values its relationship with the police. “Spirit had 30-40 pubs nationwide closed at the request of police for two days, and suffered quiet trading for a week; this affected its quarterly LFL by around 50 bps. “In the case of Wetherspoon, which had a pub in Woolwich burnt down on the first day of the riots, we would expect twice the exposure in a time period less than half as long. Therefore it would be no surprise to see current period LFL sales at least 2% down for the five weeks since the end of July. A strengthening comp of +1.5% for the first eight weeks to September 2010, will do the current period no favours.” However, Hickman backed JDW to bounce back, saying it has “demonstrated its suitability to a depressed economy already”. “Although in common with other operators it is likely to be further threatened by cost pressures, the company has already demonstrated a strong cost control culture,” Hickman added. “Adjusted for leases, the shares trade below sector average EV:ebitda, whereas we believe a premium is appropriate given the unique quality of the operation, its suitability to consumer austerity, and our forecast 12% earnings growth in FY2012E.”