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Clark, missed your original question about tips. I've dabbled in trading but not really any good at it so just stick with swings and long term. Going long on O&G at the minute as a kind of hedge against high energy bills from October. I called JDW struggling about 18 months ago but I don't do shorting. Wish I had on several of my longs mind.
I look forward to the results when they do come so i can finally see if my expectations are inline or not.
DRB this is the short that keeps on giving at the moment for me. The only other short I have is a load of June Lloyds 40 puts which I bought about a month ago as a little insurance policy incase of Armageddon by the government. They are just about at strike already. Are JDWs results next week I'm sure I heard a mention on LBC this morning? I thought it was Nov?
Never in the field of macroeconomics have so many been so comprehensively scr****d over by so few LOL.
You can see that this is my first post not really my thing. Spoons pubs are at the center of most towns and city’s. Monday to Thursday is not full. How do they use this warm space during winter? Ecom business wanting a small space to show what they have on offer via a lap top? Small office space like 10 booths @ £50pd including heat and lighting rates etc probably pay £75pd. At weekend booths open up for customers. Any ideas?
I agree with jimbow 1122 stop the cheap coffee and refills. The pubs are going to be packed with no spending with 6 coffees for £1.25 using free internet. Offer a soup lunch? Can we have a minimum spend by opening a Tab on first order? Free Internet with orders over £7?
Something needs to give the pubs are going to be full keeping warm for £1.25. We may as well let a food bank also. New thinking on the warm assets needs to be forthcoming for winter.
I am not sure how to open a new posting just my thoughts above.
Clark
Yeah short trading makes sense.
Have to agree given current climate. Even good company trading updates find something of concern and a big drop ensures.
Clark, did you see M&B's RNS this morning. I don't think it reads well for Spoons for the moment. Might be more pain to come here (everywhere!)
DRB have you got any tips to keep an eye on with the usual Black Friday October sale looming? RFX are worth a look at on any weekness but they are still standing firm. No debt tho please :)
Just looking at that intraday chart, it looks like a pair on my local barmaids lol. Or a covid W recovery
Once Tim puts his own money in then Im out.
DRB, Ive been short since June increasing position along the way. Results should show £50m loss in November even with energy on pre covid prices. Selling pubs shows a business that's shrinking. I might be wrong but with my early entry and averaging unless a buyout comes if position goes the wrong way I can exit on break even so to me it's a no brainer trade in this environment.
Forgot to mention spoons Margate were knocking out Doombar at 99p a pint. For me they could double the price and it would still be too cheap, think that a price review is needed selling beer cheaper than bottled water.
Interesting article https://mol.im/a/11258329
Patience is key here. All pubs breweries hospitality etc been hammered just like retailers & travel/holiday. MAB Shephard Neame Whitbread C&C Youngs etc all down around 40% not just spoons getting hammered. I was in spoons Margate at the weekend they couldn't wash the glasses quick enough place was rammed. Prior to the pandemic Spoons never reported a loss just a matter of time till things go full circle. GLA
Harry been a disaster... How the hell was it 12/13 quid when pubs were barely open...
of the 32 pubs i notice one is in Halifax. Halifax has 2 Spoons within about 800 yards so there is some logic here. The one shutting is in a newly developed area next to restaurants and a cinema - almost certainly it is leasehold at probably quite a high price.
On price increases the USP for spoons is it's prices, so they need to be careful.
There is logic to having cheap coffee as people will get this with a breakfast. Having said that a 20% increase to £1.50 seems sensible.
Prices have been creeping up steadily - the £6 burger and pint deal if now almost £10 in many pubs i've been in recently (Manc, Buxton, Glossop etc).
Ultimately although most pubs are busy, they always were - revenues are still down. With the cost of living crisis, the ongoing issues with covid and Spoons older clientele couple with the high level of debt/interest payments it will be a rocky winter IMHO
look at the last results and you will see that tim has just spent 125m buying freeholds , so now 70% of the estate is freehold . Fixed energy costs to the end of 2023 . Of the closures I know about , Watford , Bournemouth and Beaconsfield they are closing because new sites have been bought or are duplicates. I think a 530m cap of a company that has a freehold estate of 700 pubs and 150 leased is simply crazy . He does need to put his prices up though
FULL LIST OF JDW PUBS SET TO CLOSE
Barnsley – Silkstone Inn
Beaconsfield – Hope & Champion
Bexleyheath – Wrong ‘Un
Bournemouth – Christopher Creeke
Cheltenham – Bank House
Durham – Water House
Halifax – Percy Shaw
Hanham – Jolly Sailor
Harrow – Moon on the Hill
Hove – Cliftonville Inn
London Battersea – Asparagus
London East Ham – Miller's Well
London Eltham – Bankers Draft
London Forest Gate – Hudson Bay
London Forest Hill – Capitol
London Hornsey – Toll Gate
London Holborn – Penderel's Oak
London Islington – Angel
London Palmers Green – Alfred Herring
Loughborough – Moon & Bell
Loughton – Last Post
Mansfield – Widow Frost
Middlesbrough – Resolution
Purley – Foxley Hatch
Redditch – Rising Sun
Sevenoaks - Sennockian
Southampton – Admiral Sir Lucius Curtis
Stafford – Butler's Bell
Watford – Colombia Press
West Bromwich – Billiard Hall
Willenhall – Malthouse
Wirral – John Masefield
Jimbo, desperate times call for desperate measures. The 32 chosen pubs I suspect will be the worst performing or at least most of them. Therefore better to sell them now than spend millions keeping them running just to sell them for less in 6 months time.
In hindsight Tim will probably admit that he should have sold them 12 months ago but isn't hindsight a wonderful thing.
As you say and I have said so previously, it will be extremely difficult for JDW to shift these pubs in the current market. I believe a lot of investors here hang on the hope that the properties are carrying a significantly reduced NBV on the asset register due to not being valued for such a long time. Unfortunately I think the current market conditions have stripped away any potential gain. This market is not a seller's market for pubs so Tim will firstly do well to sell them and secondly do well to recover their NBV.
Having said that, cash is clearly a concern and I'm pretty sure the loan covenants are up for expiry in a few days. A quick firesale of some cash burning properties isn't all that bad, even if it is just to keep the banks at bay for a few more months.
Ultimately, no business especially JDW can sustain the losses they are incurring whilst honouring huge debt covenants and rising costs.
Putting prices up isn't as simple as you say it is. If I'm used to paying £2 for something one day and the next day it's £2.50 I'm still going to be miffed. In this market regulars will for sure cut back and 'every now and againers' just won't full stop.
Tim is trying to find a balance but I don't envy his position.
GL to all who are here through choice and those that aren't
Clark, it seems a risky game trading JDW
My local Wetherspoon pub is one of the 32 due to be sold and so have been following this thread.
I bought in @ 742p at the start of June, thinking that pub goers would switch to JDW pubs as the cost of living crisis looms, didn't expect this price collapse.
It’s not really my speciality, but yes there will be some inflation measure CPI/RPI although I think the latter is being phased out as an index. In pubs Tenancies are slightly different as they are shorter duration and rely on FMT (fair maintainable trade) at their core, and usually there is no right to renew. All depends on the individual lease (which is effect just a contract).
JDW will be long leases, and if you look at the list a lot are in London because this is where the company started and they could not (or would not more likely) afford freehold sites - this allowed them to grow quickly in the early years. Watford based so still “London” but it’s interesting they are letting so may of them go.
There is no expectation of having a profitable year, and why not hide the cost of lease disposals (may not be a cost as such but maybe below what book value) in a completely screwed up environment.
Never let a crisis go to waste!
This could break £4 at this rate.
The squeeze on discretionary spending has yet to show itself so this is probably one of the last places you’d currently invest in. Shame as always a favourite ‘lunch time’ haunt….no more as WFH & drink courtesy of Supermarket !
Couldn't resist selling into that bounce at 439