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1. Company Snapshot

1.a. Company Description

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland.It operates 861 pubs and 57 hotels.The company was founded in 1979 and is based in Watford, the United Kingdom.

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1.b. Last Insights on JDW

J D Wetherspoon's recent performance was impacted by factors such as intense competition in the pub industry and rising costs. Despite a 5.1% sales increase in the three months to July 20, the company's growth may be capped by increasing expenses. Additionally, while Guinness sales were a bright spot, the company's reliance on weather-sensitive trade, as seen during the recent sunny spell, poses a risk. With 794 pubs in the UK and Ireland, Wetherspoon's operations are vulnerable to macroeconomic headwinds.

1.c. Company Highlights

2. Transcript Summary

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.79%)

6. Segments

Bar

Expected Growth: 3.5%

J D Wetherspoon's 3.5% growth is driven by increasing sales from new pub openings, improved customer experience through digital transformation, and cost savings from operational efficiencies. Additionally, the company's focus on offering value for money and a wide range of drinks has helped to attract and retain customers, contributing to its growth.

Food

Expected Growth: 4.2%

J D Wetherspoon plc's 4.2% food growth driven by increasing customer visits, successful menu innovation, and effective pricing strategies. Additionally, the company's focus on improving customer experience, enhancing digital capabilities, and expanding its breakfast offerings have contributed to the growth. Furthermore, the company's efforts to improve operational efficiency and reduce costs have also supported the growth.

Slot/Fruit Machines

Expected Growth: 3.8%

J D Wetherspoon plc's 3.8% growth in Slot/Fruit Machines is driven by increasing foot traffic in pubs, strategic machine placement, and a loyal customer base. Additionally, the company's focus on providing a wide range of games and regular machine updates contributes to the growth. Furthermore, the segment benefits from the company's cost control measures, which enable it to maintain profitability.

Hotel

Expected Growth: 4.5%

J D Wetherspoon plc's hotel segment growth of 4.5% is driven by increasing demand for affordable accommodations, strategic location of hotels near city centers, and expansion of existing pubs with hotel rooms. Additionally, the company's focus on providing quality services, amenities, and loyalty programs contributes to customer retention and repeat business, further fueling growth.

Other

Expected Growth: 3.2%

J D Wetherspoon plc's 'Other' segment growth of 3.2% is driven by increasing sales of accommodation and gaming machines, as well as a rise in ticket sales from its pubs' events and festivals. Additionally, the company's focus on improving customer experience through digital initiatives and refurbishments has contributed to the growth.

7. Detailed Products

Food

J D Wetherspoon plc offers a wide range of food options, including breakfast, lunch, and dinner, with a focus on traditional British pub fare, such as burgers, sandwiches, salads, and snacks.

Drinks

The company offers a variety of drinks, including beers, wines, spirits, and soft drinks, with a focus on cask ales and craft beers.

Accommodation

J D Wetherspoon plc operates a number of hotels and inns, offering comfortable and affordable accommodation options for travelers.

Events and Functions

The company offers event spaces and function rooms for hire, suitable for a range of occasions, including weddings, birthday parties, and corporate events.

8. J D Wetherspoon plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for J D Wetherspoon plc is medium due to the presence of alternative leisure activities and other pub chains.

Bargaining Power Of Customers

The bargaining power of customers for J D Wetherspoon plc is low due to the lack of switching costs and the availability of alternatives.

Bargaining Power Of Suppliers

The bargaining power of suppliers for J D Wetherspoon plc is medium due to the presence of multiple suppliers and the company's large scale of operations.

Threat Of New Entrants

The threat of new entrants for J D Wetherspoon plc is low due to the high barriers to entry and the company's established brand presence.

Intensity Of Rivalry

The intensity of rivalry for J D Wetherspoon plc is high due to the presence of many competitors in the pub and restaurant industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.23%
Debt Cost 8.56%
Equity Weight 33.77%
Equity Cost 10.36%
WACC 9.17%
Leverage 196.10%

11. Quality Control: J D Wetherspoon plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Fuller Smith & Turner

A-Score: 5.2/10

Value: 7.8

Growth: 5.8

Quality: 3.4

Yield: 5.6

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

Stock-Card
Young's

A-Score: 4.6/10

Value: 5.6

Growth: 4.0

Quality: 3.1

Yield: 3.8

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

Stock-Card
Wetherspoon

A-Score: 4.4/10

Value: 7.4

Growth: 5.1

Quality: 2.7

Yield: 1.2

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

Stock-Card
Marstons

A-Score: 4.3/10

Value: 9.1

Growth: 5.7

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

Stock-Card
HelloFresh

A-Score: 3.2/10

Value: 8.9

Growth: 5.3

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

Stock-Card
Elior

A-Score: 2.8/10

Value: 7.1

Growth: 3.2

Quality: 1.9

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.0$

Current Price

7.0$

Potential

-0.00%

Expected Cash-Flows