The pub company said at its final results last month that it expected to get like-for-like sales back to a 20-10% decline compared to last year but that this would take one to two months under a consistent level of trading restrictions.
“This scenario has not been forthcoming,” the Peel Hunt analysts noted after ‘Spoons revealed LFL sales had slumped 28% in the 15 weeks to November 8.
Sales in October had taken a step lower from previous months as additional restrictions were imposed around Britain, including a 10pm curfew on pubs and bars, regional tiered lockdowns and table ordering.
The FTSE 250 company said, with 756 of its pubs are currently closed across England and both sides of Irish border, its cash burn in November was estimated be around £14mln.
Peel Hunt said it was cutting its pre-tax profit forecast by £22mln for the current year to reflect the second national lockdown, with the monthly cost slightly higher than in Lockdown 1, as fewer central staff are furloughed and the opening and closing costs should be concentrated over a shorter period, but November is traditionally a quieter month.
“The Holy Grail for investors remains the possibility that JDW will eventually put prices up,” the analysts said.
“Our view is that although passing on the VAT cut has clearly not been fully compensated with higher volumes, JDW is likely to keep its prices very low until the end of March due to its crusade to make the VAT cut permanent.”
The broker’s recommendation has been cut to ‘hold’ from ‘add’, though the share price target was moved to 1,100p from 950p.
Shares in the pub company, having risen more than 40% since mid-October, were down 2% to 1,103p by noon on Wednesday.