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Friday's agenda: JD Wetherspoon PLC profits set to lose fizz

Pub group likely to report half-year profits of £33mln, down from £37mln a year ago
Numis reckons Wetherspoon will open 12 pubs this year, five of which are already up and running

The froth is tipped to disappear from half-year profits at JD Wetherspoon PLC (LON:JDW) when the pub group updates the market on Friday.

Numis Securities expects Wetherspoon to post first-half pre-tax profits of £33mln against £37.5mln a year ago. Like-for-like sales increased 2.8% after 25 weeks, slightly ahead of the broker's full-year forecast of 2.5%.

The pace of decline in pre-tax earnings before interest margins slowed to 50 basis points in the second quarter from 150 basis points in the first quarter, due largely to the company passing the anniversary of October 2014's 5% wage increase.

Numis sees margins falling by 40 basis points in the second half, although flat drink prices and property costs could offset that.

The broker welcomed the company’s policy of selling 54 smaller outlets, but pointed out that it sold only two sites in the first 25 weeks.

"We forecast just 12 pub openings this year, of which five opened during the first 25 weeks," Numis said.

Elsewhere, investors will get a chance to quiz Old Mutual on its plans for its fund management arm Old Mutual Wealth when the insurer reports final results.

Old Mutual is thought to be considering a break-up as part of a strategic review it began in November.

Analysts say a drop in the South African rand, in which the insurance company gets most of its revenue, will have hurried the need for action.

Other company and economic news: 

Finals: Computacenter (LON:CCC), Global Ports Investments Gdr (LON:80GM), Old Mutual (LON:OML), Pace (LON:PIC)

Interims: Just Retirement Group (LON:JRG), Wetherspoon (J D) (LON:JDW)

Economic: UK – Consumer Inflation Expectations; Construction Output; Trade Balance. US – Import prices; UoM Consumer Sentiment and Inflation Expectations









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