Consumer Discretionary
The pricing gap with pub peers is now the biggest it has ever been - bear in mind a 2% rise in prices alone boosts JDW’s net profits by c.40% in a year. Andrew Hollingworth believes the investment return prospects are excellent for those prepared to take a long-term view on JDW’s customer proposition and its continuing growth and dominance. Andrew’s previous model (when the share price was £9.11) forecast a 7-year investor IRR of 25% (assumes gradual rise to 10% margins). With a £43 share price in June 2029. Even keeping margins constant gave a 15% IRR. Reducing the start price to £7.20 increases these returns to 26% and 17% p.a. respectively.
Edition: 135
- 13 May, 2022
Consumer Discretionary
The Walmart of the UK pub sector and Tim Martin is its Sam Walton - the power of JDW's financial model is being underestimated according to Andrew Hollingworth. In his latest report, Andrew sets out two scenarios with only one difference between them: the first rebuilds EBIT margins to 10% by the end of the seven-year forecast period. The second assumes no operational gearing at all. The forecasts they produce are for investor IRRs over the next 7 years of 25% p.a. or 16% p.a. JDW is set to offer investors great long-term compounding.
Edition: 125
- 10 December, 2021