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JD Wetherspoon Snapping Up Bargain Pubs

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The company is acquiring sites for as little as £1m for a freehold pub including fit-out, against earlier prices in the region of £2m to £2.5m.

The company reports that cash returns on investment are now improving from the recent level of 10-11% because of the availability of cheap freehold and leasehold sites.

The company is also now able to use demographic data to predict new site performance within narrow bands. The information emerged from a meeting between Wetherspoon management and City analyst Paul Hickman of KBC Peel Hunt this week. Hickman reports that trading remains in a stable pattern with the company not having to promote or discount excessively.

The analyst said Wetherspoon still has an ambitious build-out plan. He said: “In terms of demographics, management estimates that there are up to 2,000 suitable locations in the UK. But allowing for the likely availability of suitable sites in such locations, a realistic estimate is around total potential pub numbers of 1,200 – 1,500.”

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Sunday, September 24, 5:48 pm

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