The FTSE 250-listed J D Wetherspoon PLC (GB:JDW) reported a profit boost in its annual results for FY24, as demand for its pubs remains strong. The company’s profit before tax and separately disclosed items reached £73.9 million, up from £42.6 million in FY23. JDW stock opened in the green zone and gained 0.55% as of writing.
J D Wetherspoon operates a network of pubs and hotels across the UK and Ireland.
Wetherspoon Enjoys Sales and Profit Surge
Wetherspoon total sales in FY24 increased by 5.7% to £2.037 billion as compared to the previous fiscal year. Meanwhile, LFL (like-for-like) sales rose by 7.6% compared to FY23. Among its segments, LFL bar sales saw an increase of 8.9%, and food sales grew 5.6%. Meanwhile, operating profit reached £139.5 million, up from £107.1 million a year ago.
During this period, Wetherspoon sold 18 pubs and ended the leases on an additional nine, generating a cash inflow of £8.9 million.
On the back of improved performance, the company announced a final dividend of 12p per share, matching the annual dividend paid in 2019.
Meanwhile, Wetherspoon reported a 4.9% increase in LFL sales for the nine weeks ending September 29. This marked a slowdown compared to the 9.9% growth achieved during the same period last year. This mainly reflected weak consumer confidence due to an unusually wet summer and disruptions from riots in Britain.
Jefferies Analyst Sees Upside Potential
Following the results, analyst James Wheatcroft from Jefferies confirmed a Buy rating on JDW stock. He predicts 37.5% upside potential in the share price. Wheatcroft praised the company’s strong financial performance, noting that its final results align well with revenue forecasts.
Moreover, he believes that the dividend reinstatement highlights the company’s financial recovery and provides reassurance to investors about its strengthened position.
On the flip side, LFL sales momentum is expected to slow down due to decreased inflationary cost pressures. However, this is likely to result in enhanced operating margins in the long run.
Are Wetherspoon Shares a Good Buy?
According to TipRanks’ analyst consensus, JDW stock has a Moderate Buy rating based on a Buy recommendation from Jefferies. The JD Wetherspoon share price forecast is 1000p, which is 37.5% higher than the current trading levels.
