JDW versus RTN. Ten year tussle but I think we have a winner…

May 5 2016

JD Wetherspoon & Restaurant Group; contrasting styles…


  • In 2013, 14 & 15 we ran side-by-side pieces comparing JDW w. RTN.
  • Whilst the companies were broadly the same size, we much preferred JDW
  • RTN had lower sales but higher margins
  • Whilst JDW ‘invested’ its lost margin in staff, product and premises & had more freeholds
  • RTN was perhaps lean on cost & its prices were top quartile. JDW, well, wasn’t.
  • Critically RTN was arguably run by accountants whilst the JDW boss is a pubs nutter
  • This is critically important in determining culture & focus on short vs long term prospects

Recent events:

  • JDW’s margins have remained under (self-imposed) pressure but trading is stable
  • RTN, on the other hand, has managed three profit warnings in little more than four months
  • It is changing its CEO, CFO and chairman in little more than a year
  • Investors have a queasy feeling that its past is not an accurate guide to its future
  • The RTN/JDW switch chart has an unpleasant, falling-out-of bed feel to itDisplaying image001.pngDisplaying image001.pngJDW RTN

Where to now?

  • Might RTN get bid for? Yes – but what could a penny-pinching PE house bring to the party?
  • Is JDW a better prospect at ‘twice the price’? In our opinion, yes.
  • So would we switch back? We prefer pubs nutters with a 20yr view so, well, no.