View from City Road: Wetherspoon worth a round
Thursday 22 October 1992
The placing and intermediaries offer will raise about pounds 17.4m to pay for the immediate development of 18 pub sites, according to J D's tried and tested formula. The balance of pounds 5.3m is being raised by existing shareholders, including Smith & Newcastle.
In the 13 years since Tim Martin, chairman, bought his first pub, the chain has expanded rapidly. Unusually, J D has specialised in converting vacant commercial property, rather than buying existing pubs. That lets it choose the best sites. It has developed a uniform brand image and sells real ales at the competitive price of pounds 1.05 a pint.
Turnover has increased by 203 per cent to pounds 21.4m over the last two years, pre-tax profit by 245 per cent to pounds 2.1m and pro forma earnings per share by 225 per cent to 13.3p.
Present trading is proving resilient to the recession. Turnover is showing a 2 per cent like-for-like increase on last year.
Mr Martin is showing his confidence in the company's future by holding on to 25 per cent of the company after the issue.
On a historic price earnings ratio of 12.9 times, the shares are on a significant discount to the prevailing market multiple of about 15.5 times. If J D had paid a net dividend of 4.8p a share for the year to 31 July, which the directors said they would have if the shares had been trading, the gross yield at the issue price would be 4 per cent.
Given these numbers, the shares will probably go to a premium when trading starts. They are worth buying.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
- 4 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 5 Grumpy Roald Dahl letter warning student to 'eschew beastly adjectives' rediscovered after 35 years
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...