JD Wetherspoon PLC (LSE:JDW) interim results, released this morning, were “somewhat below estimates”, stockbroker Shore Capital commented in a note.
Like-for-like sales rose by 4.8% in the 26 weeks to 26 January 2025 while revenue increased to £1.03 billion. That was up from £991 million a year earlier.
Profit before tax, before separately disclosed items, came in at £32.9 million, down from £36 million. Operating profit fell to £64.8 million from £67.7 million. Basic earnings per share rose to 21.5p, up from 20.3p.
The company announced a half-year dividend of 4p. There was no dividend at this time last year.
Tim Martin, Wetherspoon chair, warned that labour and national insurance increases would push up company costs by about £60 million per year. That is around £1,500 per pub each week.
Shore Cap analyst Greg Johnson noted that at the current price, the pub group trades on a low valuation multiple by its own standards, historically, of only twelve time earnings.
Even so, he added that the valuation is still at a premium to other names in the sector that offer investors more value.
“With trading remaining resilient, we see a positive read across to other names,” Johnson said.
Shore Capital has a ‘Hold’ rating for the pub share, with a 597p price target versus a prevailing market price of 540p.