JD Wetherspoons Well Positioned To Survive Ascending Trend Line Holds

Whilst the coronavirus lockdown meant that revenue dried up overnight for pubs, the broad expectation is that JDW is well positioned within the UK pub sector to return to profitability fast when the sector reopens.

Prior to the lockdown JD Wetherspoons’ half year results showed that net debt and borrowing facilities were similar to previously reported and management sounded confident about liquidity levels.

Since then JD Wetherspoons raised 141 million through a share placing to help weather the coronavirus storm. Its workers have been furloughed and its dividend cancelled.
The pub is looking to reopen its doors in or around June, although this largely depends on the British government which is due to set out its exit strategy announcement later this week.

When pubs do open it will be with social distancing rules. This will clearly impact revenues. How prepared the UK public is to go to pubs will also be extremely important. If the public doesn’t feel sufficiently confident in the governments exit strategy to visit pubs and restaurants, this could be devastating for the sector, as could a very drawn out easing of restrictions.

Germany is set to reopen restaurants and bars later this month. Some US states are also moving towards reopening this sector of the economy. It is worth keeping a close eye on how these reopenings fare for clues as to what we can expect in the UK. Boris Johnson’s exit strategy is also key.

JD Wetherspoons no longer intends to issue a trading update on 13th May.

Levels to watch:
JD Wetherspoons has dived from pre coronavirus levels of around 1540p to a March low of 494p However, the stock has rebounded 15% over the past month 6 weeks picking up from March 19th lows to today’s 920p.
The stock price remains supported by its ascending trendline and trades above its 50 and 100 sma on 4 hour chart.
Immediate support can be seen at 910p trendline support, prior to 883p (50 sma) and 800p (low 24th April)
Immediate resistance can be seen at 1047p (high 30th April) prior to 1117p (high 13th March).

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.