Common Size Analysis 1
Fixed Assets 2
Current Assets 3
Credit Analysis 4
Return on Equity 5
Greene King (GNK) is the UK’s largest pub retailer with a current market capitalisation of £2.31bn (Source: Bloomberg, 11 November 2016) and revenue of £2.07bn reported in 2016 achieved via its 3,040 pubs and restaurants. On 23 June 2015, the company acquired the Spirit Pub Company plc (Spirit) in a £763.1m deal. (Source: Greene King, Annual Report 2016). JD Wetherspoon (JDW) operates around 1,000 pubs and 40 hotels, employing approximately 23,000 employees. In 2016 the company reported revenue of £ 1.6bn and a market capitalisation of £0.96bn. (Source: Bloomberg, 11 November 2016).
The competition to attract UK consumers in a £19bn market with limited growth forecast (0.5%) is intense and dominated by four companies estimated to have a combined market share of 25.2% in 2016-17. (Source: Pubs & Bars Market Research Report, Apr 2016 – IBIS World).
Whilst both companies operate within the same market, a key difference between the two businesses is the fact that GNK has an integrated structure of brewer and retailer. The following report aims to assess and evaluate the economic performance and financial aspects of the two pub retailers in order to form an opinion of their present and future financial prospects.
Common Size Analysis
Common size analysis allows us to compare the key