Wetherspoons likely to shine in 2010, says City

Managed pub group JD Wetherspoon has emerged as being among the companies most likely to succeed in the coming months, according to City analysts.

With their ability to keep a firm hand on costs, managed pub companies, and those mixed businesses with sizeable managed operations, are returning to favour in the City.

Wetherspoons grabbed headlines earlier this week after announcing what it called a 'January sale', which would see a range of drinks sold for 99p and certain meals going for £1.99 as part of its strategy to drive punters into its pubs.

James Dawson of Square Mile broker Charles Stanley said today the group's offering was "as competitive as ever [and] it can outperform relative to its peers. We anticipate momentum in earnings on the upside".

Wetherspoons' shares rose 40 per cent last year and Dawson said the market's expectation regarding future progress had risen "to reflect the benefits of a wholly managed estate, the lower costs of developing new sites and cash conservation, post the dividend suspension".

Douglas Jack of Numis Securities agreed Wetherspoons, which he believed would outperform the market overall, represented good value.

"We believe eating out was less vulnerable to weather disruption than drinking out [over Christmas]. Thus, restaurants and food-led pubs outperformed over the holiday although this was less obvious in London where the snow had less of an impact."

Jack added that forecasts on London brewer Fuller, Smith & Turner and the Restaurant Group, which owns the food-led pub chain Brunning & Price, were also likely to rise.