Jul 2012: J D Wetherspoon – A snowball on a really long hill…?

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JD Wetherspoon – A snowball on a really long hill..?

Jul 2012 (£4.26p)

 

Many investors have a layman’s view of JD Wetherspoon. Some will tell you that the pubs are dirty or that the beer is old and that is why it is cheap. Others will claim the business model is poor due to return on capital being low and falling. We have looked at this group very closely now and strongly contest all of these pre-conceived views. We believe we may have found another high quality UK consumer franchise with a wide and growing moat. This one charges industry smashing prices that others cannot match, but only has a 1.5% market share. As such we wonder if this is what a snowball at the top of long hill looks like?

Now it’s even undercutting the British Legion

It is ironic that many of the UK retail businesses which we find most attractive as investments are often those which seem least likely to be frequented by City fund managers. To our list of often overlooked (and undervalued) retail franchises – which includes Next, Greggs, Tesco and Morrison – we now add pub chain JD Wetherspoon.

In Wetherspoon, we believe we have found a business that has successfully applied the tried-and-tested formula of some of the world’s greatest low-cost retailers to the UK pub market:

  • An unmatched depth and breadth of merchandise
  • The lowest operating costs among its peers
  • Shrewd buying power via huge volumes (which, given the negative working capital characteristics of the business, throws-off huge cashflows for equity owners)
  • Gross margins (and prices) far below the competition
  • Friendly and efficient service, consistently

Fig.1: Mr. Market in denial – ROE rising, yet P/E falling

Source: Capital IQ, Holland Advisors

We also find in Wetherspoon a prudent business ethic that translates the above into impressive and improving returns, latterly through strong asset-efficiency gains. Later, we dispel the commonly held perception that returns are falling, arguing that the oft-cited cash returns used in this sector – the so called CROCCE – maybe are just not appropriate for this business. In fact the opposite is true: ROEs have averaged 15% over the last 10 years and 22% since the UK recession began in 2008 and return on tangible assets has risen.

Combining this with a business that has a strong track record in capital allocation (payouts have averaged 81% of Net income over the last 10 years) is we suggest, highly attractive. That the shares have been de-rated to just 9.8x EV/EBIT (11.2x historical P/E) as shown in Fig.1 indicates that Mr. Market sees it differently – hence the opportunity.

Fig.2: Long-term track record (note similarity with Berkshire’s format – not a coincidence)

Source: JD Wetherspoon 2011 Annual Report

In Fig.2 above we include a summary financials chart from Wetherspoon’s annual report for two reasons:

  1. It mimics – intentionally – the style and substance of Berkshire Hathaway’s annual report summary table thereby giving investors a not-so-subtle hint as to Wetherspoon’s modus operandi
  2. The dataset shows a very impressive financial track-record for this business. We highlight one subtle but important point: while Wetherspoon’s FCF does not look to have grown in absolute terms since 2004, by stark contrast FCF per share is now +60% higher due to the share buybacks in the intervening years
The Customer Proposition – ‘Cheap & Cheerful’ (in the best sense)

In 2008, in an op-ed written to deflect rising criticism that Wetherspoon’s aggressive pricing was fostering a binge drinking culture in the UK, Tim Martin pointed out that if low prices were the “real issue” that leads to binge drinking, then the British Legion would be the epicentre of drink excess! Nice deflection. However, to our mind, the undeniable fact is that Wetherspoon’s USP can in fact be summed up in two words: low prices.

It is hard to over-emphasise just how low Wetherspoon’s prices are versus the competition – and not just in the area of mainstream lagers. Across the board, from popular lagers to niche ales to coffees to steak lunches, it can be clearly shown that Wetherspoon undercuts its high street and pub competition in some cases by up to 75% on a brand like-for-like basis.

Oh, and by the way – four years on from Martin’s comment above – a pint of Carlsberg at our local Wetherspoon is now itself 25% cheaper than the aforementioned British Legion!

Lower prices than you might expect

  • For customers, this market positioning is represented by some frankly astonishing price differentials that are typical across the chain:
    • A pint of Ruddles for £1.79 (vs. £3.40 at our ‘local’): a 50% undercut
    • A pint of Carlsberg for £1.99 (vs. £2.65 at the British Legion in Guildford and c.£3.25 in local independent or Punch/Enterprise pubs): at least a 25% undercut
    • Steak lunch with glass of wine for £6.99 (vs. more than £10 in most reputable establishments): a 30% undercut
    • Lavazza cappuccino for 99p (vs. £2.15 typically at say Costa Coffee): a 55% undercut
    • Occasional offers such as cappuccinos for 50p between 7am and 9am (vs. £1.38 at McDonalds): a 65% undercut
  • For context, this pricing strategy manifests itself as a gross margin of just 13.6% which gives a clear indication of how difficult it is to compete against this business

For investors who might not be regular customers of Wetherspoon, it is perhaps easy to overlook just how cheap the offering is – and not just in alcohol products. We had lunch in our local Wetherspoon recently – Rump steak (perfectly cooked medium rare) with chips, salad and a glass of excellent house red wine – all for just £6.99 (Fig.3 below). The staff were efficient and the surroundings were pleasant.

Fig.3: Our menu from last week: (£6.99 for a steak lunch with wine!)

H:\DCIM\Camera\2012-06-12 12.53.35.jpg Source: JD Wetherspoon

Think about it: that is incredible value. The customer proposition was made very clear to us on that occasion – good quality food and drink in a nice environment at the lowest price-point on the high street. Importantly, it proved that quality and service were not being sacrificed to achieve the low prices. Furthermore, the offering is simple to understand (no gimmicks) and consistent across the chain so customers know what to expect and therefore are understandably loyal. The wide cross-section of society from labourers to students to office-types to pensioners at different times of the day show that its popularity is not confined to a specific demographic either.

What is particularly encouraging to us is the consistency of the process behind this service. It is not rocket science but such a pricing strategy can be lucrative when scaled-up consistently over 823 pubs across the UK. For example, since 2010 breakfasts are served from 7am with paper breakfast menus on all tables from that time. These menus are then replaced with lunch menus (as shown above) at midday, with specific lunch themes and special offers most days (e.g. ‘Steak Club’, ‘Curry Club’ and ‘Sunday Club’). All combined, the low-pricing and the resulting volume gains across the chain forms the basis of a tremendous virtuous circle which is extremely difficult to compete against or replicate and is similar to other low cost industries.

Another consequence of combining the scale of the chain with this consistent low-pricing strategy has become very clear to us: Wetherspoon now has strong brand recognition across the UK. Not in the sense of say a Burberry, but there is recognition among the public of what the name stands for: quality at a low price.

“My local tipple is HBB (Hogs Back Bitter) and my local pub (Enterprise owned) is 53 yards from my house (on average – return journeys are typically 10 yards longer). The ‘local’ charges charge £3.60 a pint for HBB (vs. £2.29 at Wetherspoon 10 miles away). I pay it due to the convenience and the people that I meet there. Pub and Enterprise knew/know this and that is why they brought in such pricing policies. The brewery that HBB comes from is 5 miles away and if buying in bulk it only charges £2.17 a pint.” Andrew Hollingworth (beer drinker)

Dispelling the common myths

“Aren’t the pubs dirty and horrible?” Actually, no. Whilst obviously given there are over 800 pubs, we are generalising but if you go into a variety of Wetherspoons and then a cross section of other pubs – not just the posh ones you like – what you will find is that the standards in Wetherspoons are better than you expect and better than the average pub. Hygiene standards are closely monitored. This is backed-up by industry standards (such as www.scoresondoors.org.uk) where the chain averages a score of 4.27 out of 5 for quality and cleanliness – an impressive average for such a sizeable business spread across such a diverse area.

“Isn’t the beer old or near to being out of date, and that is why it is so cheap?” – Whilst this may sound plausible, we suggest that given:

  • Wetherspoon sells 10% of all cask beer in the UK
  • The chain has over 800 ‘Cask-Marque accredited’ pubs, and has “more pubs in CAMRA’s good beer guide than any other pub company”

It seems unlikely that you can build such a large UK wide franchise for selling beer if it is actually low quality.

A look at the pricing earlier vs. our local brewery confirms that Wetherspoon’s margins are indeed thin, but they will be buying in bulk from the breweries and may even have relationships that say, “let us know when you are worried you have a little too much/ i.e. you have mis-read local demand and we will take beer off of you”. All of these points are exactly the same with any high-volume, low-price business model and is backed-up by the very low (c.15%) gross margins of the group. As an aside, seasoned beer-drinkers know that the quality of beer is much better in pubs that serve it in greater quantities as it sits around less.

“If the prices are so cheap, the service must be awful?” More often than not, it seems true that the trade-off these days for low-cost retailing is the quality of service (have you ever queued for a checkout at Lidl?). It does seem that Wetherspoon is cognisant of this: Tim Martin allocates a great deal of time to visiting pubs across the country assessing service quality levels and collecting feedback for weekly review meetings. Investment in staff training seems a priority and there are incentives to maintain consistent standards across the group. Wetherspoon paid-out £22.6m in staff bonuses in FY11 (flat YoY) equating to about 7% of total staff benefit expenses and 48% of reported net income.

The ‘Sam Walton’ of the UK pub industry

Wetherspoon has a unique business model, culture and, most importantly, a unique figurehead in Founder and Executive Chairman (and 28% equity owner) Tim Martin. To understand the Wetherspoon business franchise is greatly helped by an understanding of Martin and his attitude to the business. Though no longer CEO since 2004, Martin remains the driving force behind the company and it is Martin’s business acumen that really separates Wetherspoon from the rest of the pack. Upon closer inspection it will becomes obvious which famous businessmen he is trying to emulate (Sam Walton and Buffett). Martin is most famously inspired by Sam Walton’s autobiography ‘Made in America’ (he bought 500 copies to give to all his managers!). We believe he is cut from the same cloth as some of the world’s top low cost retailers.

What is the ‘secret sauce’?

A question that Buffett often poses in evaluating a business’ franchise is ‘how difficult would it be for a new entrant with unlimited capital to enter this market and compete head-to-head?” One indication of just how difficult it is to make money in this sector is that Wetherspoon operates on a gross margin of just 15% Another is that it has over 400 freehold properties; c.45% of its entire portfolio. Given the malaise across the UK pub sector (driven in large part by the decision of the tenanted Pubcos to substantially gear-up their balance sheets to expand thereby creating large estates of tied landlords) – did Wetherspoon simply get lucky or is its success in the industry a function of a long-standing strategy? We argue that it is the latter. Much of what you need to know about the Wetherspoon’s culture and business strategy can be gleaned from the following insights from Tim Martin over the last decade or so.

Emulating the passion of Sam Walton

As we continue to work our way through a plethora of business books and biographies it seems uncanny to us how the great business leaders across the world in diverse industries employ very similar tactics. For example, our sense is that Tim Martin is regimental in keeping close to the coal-face (he religiously visits pubs three days each week – similar to Starbucks’ Howard Shultz who apparently used to visit up to 25 stores every week).

He is very big on detail (such as critiquing the foam on the Wetherspoon’s coffee – reminiscent of Conrad Hilton bathtub inspections) and is very vocal on placing his employees and service at the centre of all his endeavours (ala Southwest’s Herb Kelleher maxim, “treat your employees as your primary customers”). Most of all, though, Tim Martin is a self-confessed Sam Walton devotee.

“I read Sam Walton’s ‘Made in America’ three or four years ago. It was such an interesting book in terms of what it said about management and expansion: fine-tuning one particular type of outlet and rolling it out across the country, but not in a cloned fashion. It was adapted from town to town, and built a management culture which meant a programme of improvement could be enshrined in the company, to avoid atrophy. Once I’d read it, I bought 500 copies and gave one to each of my pub managers. At Wetherspoon we’ve also copied WalMart’s practices of meeting once a week, keeping bureaucracy to a minimum and spreading information across the country quickly by phone. We critique the business – not a very British phrase.”Tim Martin (in a 1999 interview)

In the same way that Walton was a retailer to his core, Martin loves pubs.

 “I noticed in the early days that not everyone in this business likes going to pubs. I do, and that’s a big help”. Tim Martin

Managing for the long-term – “ultra patient”

In answer to our question at the top of this section, we think it was not luck that caused Wetherspoon to retain a prudent balance sheet post the 2008 crisis – Martin understands the need for a long-term ‘strategy’. The long-term target for Wetherspoon pub density (one for every 40,000 of population equating to about 1600 pubs) clearly shows this type of thinking and while unquestionably ambitious, is typical of the long-term thinking of a founder. Equally, he is seems very aware of the business cycle, and as a result the business was far better prepared to weather the current recession than its competitors were (as evidenced by this quote from 1999!):

Good companies can turn recession to their advantage sometimes because it has a worse effect on a badly run company than on a well-run one, so we are just trying to make sure ours is well run,” Tim Martin (June 1999)

“We’re ultra-patient, ultra-dogged. I’ve got a quote on my office wall that says: ‘We never get tired, we never get depressed’ – that’s how Wetherspoon works. One of my best-performing pubs didn’t make a profit for five years, but I knew the people, and knew it would work in the end.” Tim Martin

‘I don’t save time for strategy per se, because our strategy has never really changed. Improve the pubs we’ve got, boost their sales and profits, and then build more of them. It’s the implementation that takes the effort.Tim Martin

The importance of freeholds

This is a crucial point (and central to understanding Wetherspoon’s true return on capital as we discuss later). It is interesting too that Martin seems to be cognisant of other retailers core competitive advantages – a freehold asset base (the Wetherspoon chain is about 45% freehold).

‘Freeholds are important, although you can’t always get ’em. The businesses which are sustainable in the long-term in pubs and in retail are the ones with freeholds. Shepherd Neame (Britain’s oldest brewer, dating back to 1698) wasn’t built on leaseholds. Nor was Tesco.’ Tim Martin

Shrewd Media Operator – outwardly pessimistic

Martin is a savvy media operator and uses the media channels to publicise and lobby for the greater cause, the latest of which is the dichotomy between UK VAT regime for pubs and supermarkets. Martin is invariably pessimistic (on the outside at least) in all his discussions of the outlook for the sector. His constant pessimism toward the sector’s prospect, while understandable, is very reminiscent of Michael O Leary’s tactics and perhaps one should pay more heed to the fact that Martin bought an additional £2.5m worth of stock for his personal account last month.

In the past, the Wetherspoon chain has been accused in the press of facilitating a binge-drinking culture across the UK through its low pricing strategy. Martin seems to be acutely aware of this criticism and it may be partly for this reason that Martin seeks to downplay the acknowledgement of pricing as the company’s key competitive advantage. Most of us ought to be able to see beyond this rhetoric – pricing is undeniably a cornerstone of the success of this business.

How the culture & ‘customer offer’ translates into shareholder returns
  • The Wetherspoon business is either good or very good when looked at in the context of our three franchise hurdles: ‘Operate’, ‘Generate’ and ‘Allocate’.
1. Operate: Driving a virtuous circle through value for money and service

Buffett reminds us that a key performance indicator for a retail business is volume per store, not value per store. JD Wetherspoon is clearly a business that is first and foremost volume-driven and the scale benefits can be seen not just in the beer prices referred to earlier.

  • In the space of four years since its introduction across the chain, Wetherspoon is now the largest seller of Lavazza coffee in the UK and in fact is one of Britain’s largest coffee retailers
  • The chain is the largest seller of Pimms – worldwide…
  • …and sells 350,000 breakfasts every week

The resulting value for money that such scale brings is hugely compelling for customers as evidenced by the strong customer loyalty that we see. Arguably the (price) gap versus its pub competitors (some of whom are lumbered with hefty debt repayment schedules) has never been as wide. Operationally, Wetherspoon has done an excellent job of improving asset-turns through the recession as a compensation for the inevitable margin pressure. Similar to McDonalds, the move into breakfasts, coffee, all-day meals and late openings has been a material boost to asset-turnover and therefore RONTA. How many establishments have grannies and workers eating breakfasts in the mornings and revellers downing cheap WKD’s at 11pm in the same building?

2. Generate: Returns improving with asset efficiency and some gearing-up

On our usual Holland measure of RONTA (Return on Net Tangible Assets) and ROE – shown below in Fig.4, the business look solid/good. A common question from investors is whether this is due to a change in the freehold mix but as the chart shows, the mix has been relatively constant over the last 10 years. As we show later, the big driver of improving ROEs has been increased leverage (especially via share buybacks) and also through improved asset-efficiency (i.e. rising asset turn ratios).

Fig.4: RONTA and ROE

  Source: Capital IQ, Holland Advisors

  • RONTA has not been below 7% since 2000 and importantly has improved from 7% (2000-05) to 9-10% (2007-11) – despite EBIT margins falling over the same period from 12% to 10% due to price reinvestment and cost inflation. Current returns are now at a similar level to Morrison or Tesco in the UK
  • ROE has improved significantly, partly as the Group has taken a little more debt, but actually the level of indebtedness (EBIT/Int) and (Net Debt to EBITDA) has not changed that much. More importantly ROE has improved significantly because the group has bought back so many of its own shares. Thus we now have a solid and likely very, very hard to displace (or compete-with) business that offers shareholder an interesting/ compelling return on their equity investment
3. Allocate: Savvy and efficient allocation of capital

What can be seen below in Fig.5 is that in recent years the group’s sales generated from existing pubs has slowed materially as the overall business scale grew and the market conditions in the sector deteriorated. As a result the group likely concluded that there are more limited opportunities to open stores in a tough economic climate and challenging sector. This slower opening program can also be seen in the total capital expenditure ratio which – whilst still a multiple of depreciation – has also slowed.

Fig.5: Growth and Capex trends

  Source: Capital IQ, Holland Advisors

This changing use of capital from store opening to buybacks when opportunities are less obvious and the share price is low suggests the group scores highly on our third metric of ‘capital allocation’ as shown overleaf in Fig.6.

Fig.6: Capital Allocation

  Source: Capital IQ, Holland Advisors

The Magic of Negative Working Capital Businesses

A somewhat unorthodox characteristic we look for in companies is whether their business and its future expansion is partly funded by others (usually customers or suppliers but sometimes – in the case of Burlington Northern – the Taxman via tax rebates). More often than not, such funding comes from suppliers and this is the case with Greggs, Tesco, Sky and Wetherspoon. It is in essence, a float – a quasi-permanent source of capital which lowers the effective cost of capital for companies who enjoy it. Rarely are its benefits given much fanfare by the investment community.

Some of our early work on Tesco (see “Holland Views – Tesco – Owner earnings and man with a hammer” May 2010) highlighted the subtle but sizeable benefit that companies with negative working capital enjoy. In essence, ‘owner earnings’ (as Buffett labels it) distinguishes operating real cash flow from reported earnings (the main difference being working capital and tax). As we put it at the time:

“[negative working capital is] the float that the tax man and suppliers give to shareholders which can then be invested at no cost”Holland Views, Tesco, May 2010

Fig.7: Wetherspoons working capital

  Source: Capital IQ, Holland Advisors

What Fig.7 shows is that in the case of Wetherspoon (and similarly Tesco, Morrisons and Greggs), working capital inflows have consistently boosted earnings vs. those reported.

For context, the change in this working capital (i.e. the cash impact) in 2011 was a £22m inflow, almost 60% of the amount paid-out to investors via dividends and buybacks that year. In other words, the working capital efficiency is a subtle but major driver of shareholder returns that receives little attention.

Cash Returns (CROCCE) – when theory gets out of hand

A common concern made to us by investors is that Wetherspoon’s return on capital is in decline. On closer inspection what is typically being referred to here is the ‘cash returns’ of the business (or so-called CROCCE – Cash Return on Cash Capital Employed) – a metric which was advocated by certain sell-side analysts in the pub sector some years ago and seems to have become accepted as one of the de-facto KPIs used by the industry itself in its reporting to the City.

Financial metrics can of course be emphasised or manipulated in various ways to support a given argument and few other financial metric definitions generate as much debate as return on capital. However, at the end of the day common sense ought to prevail in the appropriateness of financial metrics for the businesses or industry under analysis.

Wetherspoon reports CROCCE annually and the chart below in Fig.8 (and Appendix 1) we reconstruct the historical CROCCE trends to provide context for the current performance shown on the right. It is the decline in CROCCE shown above that has investors worried.

Yet overlaid on the chart are the more regular metrics that we consistently use – ROE and RONTA – which in fact show the opposite, rising returns. So which is correct?

Fig.8: Wetherspoon’s ‘CROCCE’: long-term trends and definition   Source: JD Wetherspoon, Capital IQ, Holland Advisors

We make the following observations:

  1. To our mind, ‘Cash Return’ calculations – which notably add back cumulative depreciation to the asset base calculation – are a very useful way to determine the capital allocation prowess of specific types of companies’. It is deliberately backward looking and is most relevant for businesses which are capital intensive and are obliged to replace their capital base. But we ask does Wetherspoon (or say, Tesco) today have to replace its freehold asset base originally acquired in the 1990s? Of course not. Now if this was an airline business or a semiconductor business with finite asset lifecycles then perhaps there would be justification to adjust the asset base to reflect future replenishment costs. To us, this does not seem appropriate in the case of Wetherspoon and to our mind distracts from the actual return on capital available to the equity holder.
  2. Because depreciation policies (and freehold mixes) vary across the pub sector, there may be some merit in using CROCCE for comparison purposes.
    This might be the strongest justification for the metric. However because of Wetherspoons’ far better franchise, higher freehold mix, strong balance sheet and careful capital allocation, intra-sector comparisons are of much less interest to us.
  3. The CROCCE calculation is ultimately based on current cost accounting, i.e. in a sense it assumes that today you would have to repurchase the group’s assets in order to generate the cashflow produced today. The key attraction of compounding franchises is that you already control a long-term asset that was purchased many years ago and the cash flow produced on that asset gradually rises with inflation (i.e. you the shareholder get the benefit from of inflation – not the accountants with their current cost accounting!).
  4. Were the group still investing at the aggressive rate it was at the start of the decade such CROCCE returns might suggest future returns might not equal those reported in the past. However, this is not the case as the group clearly sees relatively less potential in its opening plan, using excess cash flow to repurchase shares instead.
  5. As share repurchases progress the group’s equity base contracts quite fast meaning that a greater and greater proportion of the CROCCE return is made up of added back historic deprecation making the calculation more and more academic.
It’s how you interpret the numbers that matters

At the end of the day it is the way these ratios are interpreted that matters. As Charlie Munger said at the Berkshire meeting this spring:

‘Business School teaches investors how to calculate all the numbers it just does not teach you how to interpret them’

Another pertinent point to make is that return calculations in isolation do not give the full context for investors. In the same way that ROE is most useful in the context of the multiple being paid for it, then if investors insist on using a CROCCE on this business, then they ought to look at ‘Price/CCE’ i.e. the price paid for that return. In Wetherspoon’s case P/CCE would be a multiple of 0.36x. In other words, the market cap of the group is significantly less than calculated ‘Cash Capital Employed’ asset value, so future returns are in effect amplified from 10% to 26.9% – quite close to our ROE calculation.

In our view, the price of the shares the group can repurchase and the efficiency (stock turns) it can drive from the assets it already owns are far more important drivers to the value of this business than the somewhat hypothetical question of how much capital would be needed to today to replace the existing assets.

ROE and RONTA trends

As shown below in Fig.9, the bulk of the improvement in RONTA and ROE was via improved asset-turns and leverage. In particular, the latter has been materially improved via the share buyback. To show the improvement in asset efficiency between 2001 and 2011 (notably – a time when the freehold mix did not change), it is very clear that sales outgrew assets considerably.

  • 2001-11 Sales cagr: +8%
  • 2001-11 Total Assets cagr: +4%
  • 2001-11 Net Tangible Assets cagr: +2.6%

Fig.9: ROE: Du Pont Analysis

  Source: Capital IQ, Holland Advisors

Risks

In our discussions with investors on this business, several concerns are consistently expressed:

  1. “The business has achieved all the easy asset-efficiency gains in recent years. Margins are highly unlikely to rise, therefore returns have peaked and are likely to fall.”
    1. There may be truth in this argument but we are not suggesting that margins or returns need to expand from here for the stock to be under-valued. Rather it is the low valuation coupled with the resilience and compounding features of the business model that provide the margin of safety.
    2. We think it is worth pointing-out that given the blatant low pricing policies that the company employs, there is room for a moderation or indeed selective price increases
  2. The quality of earnings is sometimes cited as a worry – in particular the nature of exceptional charges in recent years.
    1. Given that Cashflow from Operations last year was 2.7 times reported earnings, the quality of earnings in this business is clearly high although we do concede that exceptionals write-downs have been a little too frequent especially since 2009.
  3. The question of appropriate levels of leverage is often asked
    1. Our sense is that with EBIT/Net interest still close to 3x and Net debt/EBITDA of 3.4x, the company remains sensibly structured.
    2. Whilst these ratios are low when compared to other UK pub companies they are higher than those of the franchises we normally recommend
  4. Perhaps the greatest risk to Wetherspoon is regulatory pricing.
    1. The issues of supermarket alcohol pricing (often perceived to be below cost) and the phenomenon of binge drinking are hot topics in the UK and it is possible that Wetherspoon could get caught in the crossfire.
Conclusion

We see many attractions in the JD Wetherspoon business that Mr. Market seems to ignore and as ever, therein lies the opportunity. We see a business that has an excellent culture and long-term track record, a constantly widening competitive position, is innovative (and has the returns profile to show for it) and is a dab-hand at allocating capital opportunistically via share buybacks.

Investors are not short of reasons to dismiss Wetherspoons as an investment – UK retail and in particular UK pubs is a sector that is understandably derided by many and has undoubtedly been subject to many headwinds such as rising cost inflation, government taxes, supermarket discounting and cuts in consumer spending.

Yet, Wetherspoon stands out by a mile in the sector. It has shown that it can innovate in one of the toughest UK retail environments, improve its asset efficiency, use its scale to drive down prices for customers and enjoy an extremely healthy working capital benefits from suppliers. In short this is a high-return business run in a long-term quasi-private fashion whose interests and actions are extremely-well aligned with shareholders’. We have not felt the need to closely consider the group valuation as we see it as priced very cheaply in the context of the business traits that we have outlined but it trades on 9.8x EV/Historical EBIT and 11.2x past year P/E.

With pricing levels in all products sold that are so far below all others in this industry this group may well have a long road of expansion ahead of it. Today new openings are limited, likely by the combination of high asset prices and cost/tax pressures, hence the current use of capital for share buy backs instead. This combination of high asset prices and high costs might not always be present though and where the group to consider it attractive we think expanding significantly their 1.5% market share would be something they could now easily achieve. As such and we wonder whether JDW could be the “snowball with wet snow and a really long hill” that someone famously said we should look for.

Buy JD Wetherspoon

Andrew Hollingworth, Mark Power and Ramsey Craine

Appendix 1 – Historical CROCCE

 Source: Capital IQ / Holland Advisors

Appendix 2 – JD Wetherspoon Financials

 Source: Capital IQ / Holland Advisors

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This document does not consist of investment research as it has not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore even if it contains a research recommendation it should be treated as a marketing communication and as such will be fair, clear and not misleading in line with Financial Services Authority (FSA) rules. Holland Advisors is authorised and regulated by the Financial Services Authority (FSA). This presentation is intended for institutional investors and high net worth experienced investors who understand the risks involved with the investment being promoted within this document. This communication should not be distributed to anyone other than the intended recipients and should not be relied upon by retail clients (as defined by FSA). This communication is being supplied to you solely for your information and may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. This communication is provided for information purposes only and should not be regarded as an offer or solicitation to buy or sell any security or other financial instrument. Any opinions cited in this communication are subject to change without notice. This communication is not a personal recommendation to you. Holland Advisors takes all reasonable care to ensure that the information is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. This communication is based on and contains current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of this communication may have been disclosed to the issuer(s) prior to dissemination in order to verify its factual accuracy. Investments in general involve some degree of risk therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investment discussed in this communication may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of this investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. This document is for informational purposes only and should not be regarded as an offer or solicitation to buy the securities or other instruments mentioned in it. Holland Advisors and/or its officers, directors and employees may have or take positions in securities or derivatives mentioned in this document (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manage conflicts of interest in regard to this communication internally via their compliance procedures.

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Welcome to Holland Advisors

By continuing to use this website you:
Terms and Conditions
Disclaimer
Privacy Notice

Agreement

Please confirm the following Please confirm that you have read and understood the following terms of use of this website. THIS PORTION OF THE WEBSITE IS ONLY MADE AVAILABLE TO NON-US INVESTORS AND PROFESSIONAL CLIENTS OR ELIGIBLE COUNTERPARTIES. The content of this website has been prepared by Holland Advisors (London) Ltd on the basis of information and sources believed to be reliable. Under no circumstances should any part of this website be construed as an offering or solicitation of an offer for any investment in the products on this site Holland Advisors (London) Limited is authorised and regulated by the Financial Conduct Authority (FRN 538932). 1. Not for U.S. Persons The provision of the information in this website does not constitute an offer of securities to any person in the United States or to any U.S. Person as such term is defined under the Securities Act of 1933, as amended. The information contained in this site about Holland Advisors (London) Ltd is not directed to any person in the United States. Funds referred to herein are neither registered under the Securities Act 1933 of the USA, nor are they registered under the Investment Company Act of 1940. Consequently, they cannot be offered for sale or be sold in the USA, its territories, possessions or protectorates under its jurisdiction, nor to nationals, citizens or residents in any of those areas. No investments or services mentioned on this website are directed at US Persons who are not Eligible Counterparties as defined by the UK Financial Conduct Authority (FCA) Handbook or Qualified Purchasers as defined under the Investment Company Act of 1940. The information contained herein does not constitute a distribution, an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction in which such distribution or offer is not authorised. 2. Terms and Conditions of Use IMPORTANT LEGAL NOTICE THE FOLLOWING TERMS AND CONDITIONS OF USE (“TERMS OF USE”) APPLY TO YOUR ACCESS TO AND USE OF THE HOLLAND ADVISORS (LONDON) LTD WEBSITE (THE “WEBSITE”). EACH TIME YOU ACCESS OR USE THIS WEBSITE, YOU AGREE TO COMPLY WITH, AND BE BOUND BY, THE TERMS OF USE AND ACKNOWLEDGE THAT WE MAY RELY UPON YOUR AGREEMENT. PLEASE READ THE FOLLOWING TERMS OF USE CAREFULLY AND IF YOU DO NOT ACCEPT ANY TERMS OR CONDITIONS, PLEASE DO NOT ACCESS OR USE THIS WEBSITE. 3. Information on the Website Except where stated otherwise, the information, content and services on this Website (the “Information”) are provided by Holland Advisors (London) Ltd (referred to as “we” and “us”) as at the date indicated on the relevant material. The Information is provided for personal use and information purposes only. The Information does not take account of the investment objectives, financial situation and particular needs of any particular person and is not general advice to any class of persons. Therefore, you should not rely on the Information and should obtain relevant and specific professional advice in making any investment decision. Furthermore, nothing on this Website constitutes or should be construed to constitute: (i) an offer, advice, invitation or solicitation from us or our affiliates to buy or sell any investments or securities, futures, options or other financial instruments; (ii) an invitation or inducement to engage in investment activity or a financial promotion of any kind; or (iii) investment advice or recommendation. 4. Stock exchange prices and exchange rates The prices/values shown on this Website in relation to different underlying securities are based on the prices notified to Holland Advisors (London) Ltd as the last sale price of the relevant securities on the stock exchange on which they are traded as at the time and date shown. Those figures may vary throughout the course of, and between, stock exchange trading days, market trading times and business days in general. Holland Advisors (London) Ltd has not verified the figures with the relevant stock exchange and you should verify the accuracy of those figures separately before relying on them. 5. Permitted users of the Website The laws and regulations of the country from which you access this Website may include restrictions on the distribution of the Information. This Website is not directed at or intended for distribution to or use by any person or entity in any jurisdiction where (by reason of that jurisdiction’s applicable securities laws, person’s nationality, residence or otherwise) such distribution, publication, availability or use of this Website or any part of its contents would be contrary to applicable law or regulation or would subject Holland Advisors (London) Ltd to any registration or licensing requirement within such jurisdiction. If you are such a person or entity, you are not authorised to enter the Website. It is your responsibility to ensure that your use of this Website complies with any restrictions or any applicable local laws regarding use of the Information on this Website. Persons or entities in respect of whom such restrictions apply must not access the relevant pages on this Website. The Information displayed on this Website contains material that may be interpreted by the relevant authorities in the country where you are viewing this Website as a financial promotion or an offer to purchase securities. Accordingly, if you reside in any such country or fall within the scope of any law that seeks to regulate financial promotions in the country of your residence or in the country in which you are viewing this Website, please cease accessing or using this Website immediately. If you are uncertain about your position under the laws of the country in which you are viewing this Website, then you should seek clarification by obtaining legal advice from a lawyer practicing in the country of your residence or in the country in which you are viewing this Website before accessing this Website. You may not use any part of the material or Information on this Website to establish, maintain or provide or assist in establishing, maintaining or providing a stock market for trading in securities. 6. Investment Performance and Accuracy of Information The Site contains material about the past performance of our Funds. The value of an investment in a Fund may go up as well down so that an investor’s investment in a Fund, when redeemed, may be more or less than the original investment amount. By its nature, investment in a Fund managed by Holland Advisors (London) Ltd is only suitable for sophisticated investors who do not require immediate liquidity for their investment, for whom an investment in a Fund does not constitute a complete investment programme and who fully understand and are willing to assume the high risk involved in the investment programme of a Fund. THE PAST PERFORMANCE OF ANY INVESTMENT, INVESTMENT STRATEGY OR INVESTMENT STYLE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Whilst the information contained on the Website has been given in good faith and every effort has been made to ensure its accuracy, the Information may not be complete or accurate for your purposes. This Website and the Information is provided on an “as is” basis and Holland Advisors (London) Ltd may not, and has no obligation to, update the Information or correct any inaccuracy which subsequently becomes apparent. The Information and/or opinions and estimates comprised in the Information may be changed or withdrawn without notice and may become outdated. You, therefore, should verify any information or other material obtained from this Website before you use it. HOLLAND ADVISORS (LONDON) LTD, ITS DIRECTORS OR OFFICERS DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BY WAY OF EXAMPLE BUT NOT LIMITATION AS TO RELIABILITY, COMPLETENESS, FITNESS FOR PURPOSE OR ACCURACY OF THE INFORMATION ON THIS WEBSITE OR ON ANY THIRD PARTY WEBSITE LINKED TO THIS WEBSITE. IN ADDITION, WE DO NOT REPRESENT OR WARRANT THAT THIS WEBSITE OR THE SERVERS THAT MAKE THE WEBSITE AVAILABLE WILL BE UNINTERRUPTED, ERROR FREE, OR FREE FROM INFECTION, VIRUSES, WORMS OR ANY OTHER HARMFUL CODE WHICH MAY HAVE CONTAMINATING OR DESTRUCTIVE PROPERTIES. YOU ARE FULLY RESPONSIBLE FOR ENSURING PROTECTIVE STEPS TO BE TAKEN SUCH AS VIRUS CHECKING. The Information is assembled from material prepared by Holland Advisors (London Ltd) or its agents but may not include Information made known to Holland Advisors (London) Ltd officers (or agents) subsequent to the date of publication of the Information indicated on the Website. If you use the Information, you do so at your own risk. Please recognise that the previous performance of securities or other instruments does not guarantee or predict future performance. 7. Exclusion of liability TO THE FULLEST EXTENT PERMITTED BY LAW, HOLLAND ADVISORS (LONDON) LTD ACCEPT NO LIABILITY TO YOU OR ANY THIRD PARTY FOR ANY LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT DAMAGES, CONSEQUENTIAL OR SPECIAL DAMAGES, LOSS OF USE, DATA OR PROFITS, COSTS OR EXPENSES INCURRED OR SUFFERED BY YOU OR THIRD PARTY, WHETHER IN CONTRACT OR DUE TO NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF OR IN CONNECTION WITH THE ACCESS TO, USE OF, RELIANCE ON, OR PERFORMANCE OF THIS WEBSITE OR ANY INFORMATION CONTAINED ON THIS WEBSITE, WHETHER DUE TO INACCURACY, ERROR, OMISSION OR ANY OTHER CAUSE AND WHETHER ON THE PART OF US, OUR SERVANTS, AGENTS OR ANY OTHER PERSON. NOTHING IN THE TERMS OF USE EXCLUDES, RESTRICTS OR MODIFIES ANY CONDITION, WARRANTY OR LIABILITY WHICH MAY AT ANY TIME BE IMPLIED BY STATUTE OR ANY OTHER APPLICABLE LAW WHERE TO DO SO IS ILLEGAL OR WOULD RENDER ANY PROVISION OF AN AGREEMENT VOID. 8. Third Party Websites We may provide, on our Website, links to websites operated by third parties as a convenience to you. If you use these other sites, you will leave this Website. If you decide to visit any linked site, you do so at your own risk and it is your responsibility to take all protective measures to guard against viruses or other destructive elements. Holland Advisors (London) Ltd makes no representations, warranties or guarantees of any kind about any of the content of any other website which you may access by hypertext link through this Website. When you access any other website by means of a link from this Website, you should understand that your access to that other website is independent of Holland Advisors (London) Ltd and Holland Advisors (London) Ltd has no control over the content of the website, nor does Holland Advisors (London) Ltd in any way endorse or approve the content of that website. In no event will Holland Advisors (London) Ltd in any way be liable to you or any other person(s) or organisation(s) for loss or damage (whether direct, indirect, consequential, special or other) for any use of any site linked to it by means of hypertext or otherwise. 9. Indemnity You agree to indemnify Holland Advisors (London) Ltd and its officers from and against any claim brought by third parties against Holland Advisors (London) Ltd and its officers as a consequence of your breach of the Terms of Use. Furthermore, if your use of this Website results in the need for servicing, repair or correction of equipment, software or data, you assume all costs thereof. 10. Intellectual Property Rights and Licence The copyright, trade mark or any other intellectual property rights in the Website and the Information are owned by or licensed to Holland Advisors (London) Ltd. You may download or print out a hard copy of individual pages and/or sections of this Website provided you do not remove any copyright or other proprietary notices. Any downloading or other copying from this Website will not transfer title to any software or material to you. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link to or use for any public or commercial purpose this Website without the prior written permission of Holland Advisors (London) Ltd. Any rights not expressly granted in the Terms of Use are reserved. 11. Operation of the Website You should be aware that the internet, being an open network, is not secure. If you choose to send any electronic communications by means of this Website, you do so at your own risk. Holland Advisors (London) Ltd cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely. 12. Privacy Any personal data relating to you will be collected, used and recorded by us in accordance with current data protection legislation, the Terms of Use and our Privacy Policy. You must read our Privacy Policy as it forms part of the Terms of Use. 13. Governing law The Terms of Use are governed by the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction over any disputes arising under them. 14. Waiver If you breach the Terms of Use and we take no action, we will still be entitled to use our rights and remedies in any other situation where you breach the Terms of Use. 15. Our details This website is owned and operated by Holland Advisors London Ltd. You can contact us at: Holland Advisors London Ltd, The Granary, 1 Waverley Lane, Farnham, Surrey, GU9 8BB. Updated and effective as of  31st March 2024
Disclaimer
Please read the following conditions of use of this website. This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority). The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932). This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside. Information on this site The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly. Marketing Communications Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy. Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures. Fund Information Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation. Linked Websites This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. Indemnity You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information. Use of Cookies If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings. Copyright, Trademarks and Other Rights Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors. Governing Law You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.
Privacy Notice
This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at The Halt, Smugglers Way, The Sands, Farnham, Surrey, GU10 1NB.
Introduction
This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you. In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’. This notice applies to personal data collected through our website www.hollandadvisors.co.uk. Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.
Data Protection Officer
We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.
Personal data we process
1. How we obtain personal data The information we process about you includes information:
  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services
2. Types of personal data we collect directly When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:
  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive
3. Types of personal data we collect from your use of our services By using our website and our services, we process:
  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.
4. Our use of aggregated information We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity. For example, we may aggregate usage information to assess whether a feature of our website is useful. However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice. 5. The bases on which we process information about you The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category. If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data. If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information. 6. Information we process with your consent Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data. Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website. We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists. You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk. 7. Information we process for the purposes of legitimate interests We may process information on the basis there is a legitimate interest, either to you or to us, of doing so. Where we process your information on this basis, we do after having given careful consideration to:
  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so
For example, we may process your data on this basis for the purposes of:
  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so
How and when we process your personal data
8. Your personal data is not shared We do not share or disclose to a third party, any information collected through our website.
Use of information we collect through automated systems
9. Cookies Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date. They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered. They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors. Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them. Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate. The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website. 10. Personal identifiers from your browsing activity Requests by your web browser to our servers for web pages and other content on our website are recorded. We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution. We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.
Other matters
11. Your rights The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data. We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org 12. Communicating with us When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need. We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service. 13. Complaining If you are not happy with our privacy policy, or if you have any complaint, then you should tell us. When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint. 14. Retention period Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested. 15. Compliance with the law Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’). 16. Review of this privacy policy We shall update this privacy notice from time to time as necessary.