LONDON (ShareCast) - (Sharecast News) - Strong profit growth and the reinstatement of a dividend at JD Wetherspoons weren't enough to sway Shore Capital from changing its 'hold' rating on the stock on Friday.
Shore Capital hailed the pubs group's "robust" annual results, with pre-tax profit up 73% at £73.9m, "which was consistent with market expectations albeit ahead of our forecasts and reflected the rebound in profitability from the second half last year".

The company also impressed with its first dividend payment since 2019, declaring a final dividend of 12p per share, equal to the annual dividend paid out five years ago.

However, Shore Capital remains cautious over the stock's current valuation, trading at 17.3 times earnings, based on the profits numbers reported on Friday.

"As a net seller of pubs, a normalising in LFL sales trends and leverage ratios arguably higher than optimal (3.5x ND/EBITDA), it is difficult to reconcile why Spoons should command such a premium rating to its pub peers; albeit it remains best-in-class," said Shore Capital analyst Greg Johnson.

The shares were down 0.3% at 722.50p by 1058 BST, having erased early initial gains following the results.

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