Shares digital

JD Wetherspoon (JDW) – Interims PTP: £28.5m (£32.9m) Divi: 4.4p (4p)

The 13% drop in profit shouldn’t surprise, if you consider the entire pub industry has been hit by the smoking ban. In the bigger picture, Wetherspoon has done well, propped up by food takings as people trade down from restaurants. A 9.7% rise in like-for-like food sales is encouraging, as long as it can pass on higher raw material costs to the customer.

It is a welcome sign to see Wetherspoon proceed with new site openings, 23 planned this year and 30 in 2009. During the half year, it accelerated interest payments to reduce the impact of longer-term borrowings, which were starting to look expensive. Share buybacks have been partially sidelined in favour of a 10% dividend rise.

Shares says: The market didn’t like the results, with a 10% plus drop in the share price, but expect the stock to recover quickly.

by: Dan Coatsworth