Pubs and bars bore the brunt of lockdowns. Many lost all their revenue once they were ordered to close. And while some enterprising management teams sold beer from a window or a backyard, or generated other forms of revenue through Zoom meet-ups, the lockdown forced pub companies to tap shareholders for capital to strengthen their balance sheets and survive the closures.
Some companies navigated the storm better than others, and the pub sector remains popular with investors, as the business model is easy to understand. The customer orders what they want, the pub takes the money, the pub pays its costs, and whatever is left is cash profit.
One company that has mastered the art of taking a customer’s money (and one that I suspect has taken thousands of my own over the years) is the sector’s leader, JD Wetherspoon (LSE: JDW). It’s named after founder Tim Martin’s teacher Mr Wetherspoon, who told him he’d never amount to anything. With nearly £2bn in revenue and 826 pubs, it appears Tim has proven his teacher wrong.
