Two businesses in the same sector - Pandemic recovery.

[Jon39]

When the 2020 COVID pandemic occurred, one the worst sectors to be involved with, was Hospitality (Restaurants and Pubs).
Such an unexpected event for investors. Akin to being hit by a juggernaut.
Business stopped almost instantly. Revenue down, but many overheads continued to be payable.

These two charts reveal remarkably different business performances, during the pandemic recovery phase..


J D Weatherspoon plc





Compass Group plc]

[22s]

They're not really comparable in any interesting way.

Compass is a multi-national, b2b contract food services business with $40b+ in revenue.

JD is a UK national b2c pub chain with $2b+ in revenue.

[dingg]

Poor comparison agreed

I bet I can guess which John holds though :-)

[Jon39]

22s said:

They're not really comparable in any interesting way.

Compass is a multi-national, b2b contract food services business with $40b+ in revenue.

JD is a UK national b2c pub chain with $2b+ in revenue.

Yes, very fair point. They just happen to be placed in the same LSE Sector, but with very different business models.

I discovered Compass in 2000 and found their subsequent growth to be strong and consistent - just what I like.
The sudden unexpected jolt occurred with the Pandemic - a share price fall of about 50%.
I continued holding and contributed to their rights issue, then sat back with no idea how they would cope.

There was obviously a clear reason for dropping 50%, but what then surprised me, was how quickly the business recovered.
Quite a compliment to the management.

Knowing about that rapid recovery 5 years ago, something this morning made me wonder how other hospitality PLCs might have performed, after the Pandemic ravaged their businesses. Thought of Weatherspoon, so that is why I looked at their chart.
We know how pubs now face more financial pressures than pure catering, so not at all easy for them.

[Jon39]

dingg said:

Poor comparison agreed

I bet I can guess which Jon holds though :-)

Yes Grant, although in same LSE sector, very different business models.

I have held Compass for over 25 years.
It was quite a surprise thinking their strong company growth would continue long-term, then wack, the COVID pandemic occurred.
I didn't know anything about the previous global pandemic, in 1918.
Anyway Compass managed to recover very well from the crisis.

I do hold a few 'dogs', but knowing about those would not be of help to anyone.
They have often tended to be the leftovers, following part share takeovers.
There was a funny one recently, where a previously demerged entity, was subsequently purchased by an American automobile parts manufacturer. I wanted all cash, but that doesn't usually work, so am now stuck with a small holding in a loss making business.