Interesting resolutions for the Wetherspoon annual general meeting and general meeting on 9 November. At the agm , the board is seeking approval to buy 15,825,155 Wetherspoon shares which they are proposing to cancel (subject to market conditions/capital requirements etc). The effect of this will be to increase the proportion of Wetherspoon shares which are held by Tim Martin the founder, his family and a trust from just over 31% of the company's shares to ~37% (provided they do not sell any shares). The Takeover Panel has given a waiver to rule 9 which would have required Tim Martin and family to make a bid for the outstanding shares in the company. This waiver is subject to the agreement of non-executive directors and shareholders, hence the general meeting. The Tim Martin and family group (referred to as the Concert Party in the documents) will not be voting. Wetherspoon has a long history of buying and cancelling shares, having spent ~£279.3 million since 2007 on this process.
I will be voting in favour since I think it shows a serious commitment to the company by Mr Martin. Every time I go into a Wetherspoon I am impressed by how busy they are. The one in Eastbourne had a respectable number of visitors at 11.30am one day last week when I bought coffee. What Mr Martin's long-term strategy for the company might be and whether it will still be listed in 10 years is something I don't know but is the sort of issue which could be profitably be discussed over a pint in one of his establishments.
Following on from the previous posts, anybody really understand why these shares have been doing so incredibly well in the last few months? It seems to break its 52 week high almost every day and keeps going up. I thought the results were OK but nothing spectacular (once you could find them after ploughing through Tim Martin's usual diatribe). The margins were better than expected but the forecast for the coming year was still cautious so I don't really understand the current level.
Of course I am happy with it but am wondering if it may be time to cash in the profit here especially as the dividend has not been increased for at least 5 years and is currently at a yield of only 0.98%.
I'm not seeing a sharp fall. They fell briefly from 1232 to 1224, and soon recovered. In fact I'm surprised they're so high, considering that the four broker forecasts published since their recent results have valued them at 950, 910, 975, and 1250.
I sold out yesterday at 8.8865. Reason was that I got my 05 October valuation. At that time the 4 pub groups I hold were were with yield:
Greene King 4.15%
Now Marston's divi is probably too high. But Weatherspoon's had a big boost after the EU referendum, probably due to Tim Martin's being a Leaver. Unsustainable in my view given that Weatherspoon's USP is price. Weatherspoon's is already very efficient and its trade is wet-led with no lodging offering so will not benefit from staycations. The others still have some fat to cut and will be better able to hold prices down.
"In an article yesterday I talked about gloating Brexiteers. Hours later, and perhaps the most vocal of all the stockmarket's 'Leave' voters - LSE:JDW:JD Wetherspoon's mulletted chairman Tim Martin - could not resist a barrel-sized dig at ..."
FY16 results were slightly ahead of the raised expectations set at pre-close announcement back in July. LFL sales +3.4% and Operating margin 6.87% (PGe 6.8%). Revenue was £1,595.2m (PGe £1,601.9m), PBT of £80.6m (PGe £74.5m) giving EPS of 48.3p (PGe 47.8p) and DPS was held flat at 12.0p as expected. The outlook is upbeat, with current LFL sales running at 4.1% and hence we expect earnings upgrades of c3%. Shares have had a strong run into the results and trading on 9.0x 2017 EV/EBITDA broadly in line with the sector.
"JD Wetherspoon (JDW) reported Q3 16 results (13 weeks to 24 April 2016) which were slightly better than our estimates. The lfl revenue was up by 3.8% (our estimate: 2.8%) and total sales increased by 5.5% (vs Q2 16: 6.3%, Q1 16: 6.1%; our estimate: 4.6%). The operating margin declined to 6.4% (-110bp yoy, +10bp qoq, vs our estimate: 6.6%) on the back of a c.8% increase in hourly wages since August 2015. On a ytd basis, the lfl revenue increased by 3.2% (-40bp yoy) and total sales was up 5.9% (-200bp yoy)."
I have to agree re Europe however he did two good things I thought:
1) He didn't bang on about tax parity in the pubs industry like he normally does in Chairman's reports (he may be right but change the record occasionally, please)
2) His comments on the junior doctors' strike were interesting ie if you try to change contracts and cannot take the staff with you, you will lose them and probably be forced to backtrack - although whether he would actually do this in practice is another matter.
I actually was rather surprised how poorly the Brexit politicians performed on that programme as well. They got a lot of cheers from the already decided portion of the audience, but they could not coherently answer a lot of Paddy Ashdown's points at all. I don't think they would have persuaded many floating voters on that performance.
Did anyone see JDW's Chairman on Question Time last night? Ihave never heard so much nonsense coming from one person. He is a Brexit fan, but could nor come up with a single reason to support his view.
Well, I can predict some likely reasons. The EU legislates to prevent employee exploitation and to improve health and safety. Now if you believe in the hire and fire concept and do not care much about your customers' health, then of course you would want to bin all the regulations.
Another likely reason for the Chairman wanting Brexit is that if we leave the EU we will be all poorer (recession and higher unemployment) so we will not be able to afford to eat in a decent restaurant and will be forced into the cheapest option. Clever when you think about it, but while the Chairman votes Brexit, we should all vote REMAIN.
"LSE:JDW:JD Wetherspoon is one of Britain's most successful pub companies. Its business model of selling drinks and food at cheap prices has been a big hit with consumers.As a result, the company has been able to post impressive increases in ..."
You are spot on; this outfit has lost its way. The company has only one strategy which is to pile it high and sell it cheap. The only way you can make a profit this way is to by adopting low wage hire and fire policies. "We cannot afford the minimum wage so now you are 21 you are sacked. We will replace you with someone younger".
Throughout my employment I have been protected by legislation that started in the EU. If we leave the EU all legislation protecting employees will be scrapped. I guess this is why the Chairman is such a Brexit fan. Let us go back to the good old days when we could do what we like. If you work for this company the only hope you have got is to vote to remain in the EU.
Big reversal in the chart today with today's down engulfing yesterday's up. After the recovery which followed the negative trading statement this looks to me to signal a move back to the lower levels reached in January and I have gone short.
" With the business cycle already extended and warnings creeping in, be alert for dependable performers. A proven theme from the last recession was well-managed pubs in South East England, benefiting from people's resolve not to compromise social ..."
JDW's planning application for a pub on a key boulevard in Welwyn Garden City was thrown out last night by Councillors unanimously. The company's entire approach was seen as arrogant and superficial; it failed to engage with the locals choosing PR as its chosen means of communication and what was being said in the company's name was seen as very questionable. Their planning application itself was also widely seen as amongst the worst ever presented and they seemed to have done no homework about the place they were seeking to occupy at all.
For a major public company this was seen as a lamentable performance.
Today's update does not read well and still £600m in net debt. Profit forecast is below last year's as an approximation states Mr Tim Martin. Can see these at below £7 soon. A robust
business and the pick of any drinking hole serving good food in my opinion, so some shareholders might just hold on, Christmas approaching might tempt the sellers to pick this stock for obvious reasons ; like it's gonna drop.
"Record sales and cash flow injected some much needed Dutch courage into LSE:JDW:JD Wetherspoon shares on Friday. That offset concerns over the sustainability of the industry amid tax disparity and the living wage, although the rally has been ..."
I agree, and I'm sure Wetherspoons will find a way to make things work. I think Tim Martin saw this as an opportunity to get some good coverage for his (well justified) rant about he imbalance between taxation for pubs and supermarkets, and it rather backfired on him as regards the share price! I'm comfortable that this share will climb back.
I think you're right that the living wage change and Wetherspoons' own response to this directly caused the sharp drop last week. i wonder though - would it not be the case that, with the living wage only being for over-25s, that Wetherspoons may have an ability to manage much of their frontline operations with younger staff to offer some mitigation. Also, with it being applied evenly across the pub sector and a bit of true wage inflation in the system anyway, my feeling is that the drop was an over-reaction. Their clear belief in themselves evidenced through the almost daily share buybacks is giving me confidence.
"George Osborne's plans for a "living wage" were celebrated by most last week, but today the plans were criticised for adding "considerable" uncertainty to LSE:JDW:Wetherspoon's future profits, especially when pitted against cheap supermarket ..."
A lot of pub chains and retail have suffered since the budget. The changes to the "Living Wage" will significantly affect Wetherspoons as I think a very significant number of their non-management staff in the pubs are on the current minimum wage. I suspect this has a lot to do with recent falls.
""Britain is walking tall again," shouted Chancellor George Osborne to a background of jeering and cheering typical of budget time. "This budget works for you," he added, and the soundbites kept coming. But in the final budget of this parliament, ..."
"England's early exit from the World Cup disappointed more than just football fans, with the early plane home pulling down LSE:JDW:JD Wetherspoon's sales growth in its final quarter. And the pub chain's forecast of a "reasonable outcome" when it ..."
Martin John13...."Not sure why the fall ?"
Could be just normal profit taking? But much of AIM is affected by short selling. I don't believe this is the case here, nevertheless much of AIM is tanking on GOOD NEWS......?
This is different and in my opinion...is cause for concern? In a few more months it may be cause for ALARM.............?
Well, something strange is happening on most stocks, in particular AIM. As of the last few months it seems that many stocks are going down ON GOOD NEWS!. Apart from normal profit taking/traders , something sinister appears to be occuring and it might be because of SHORT selling raiding parties...
This can explain a lot of what's happening on AIM. It's a campaign against organised short selling syndicates?
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