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Mon 11th May 2015 - Wetherspoon threatens legal action against competitors infringing trademark
Wetherspoon threatens legal action against competitors infringing trademark: Pub operator JD Wetherspoon has threatened to take legal action against a number of competitors which it says are promoting ‘meal deals’ which infringe trademarks that have been created by Wetherspoon itself. The company says the infringements have occurred in a number of pubs owned by Stonegate, Greene King, Whitbread and Mitchells & Butlers. Examples include Stonegate advertising a ‘Beer & Burger’ offer, using the exact description which is the subject of a Wetherspoon trademark. Stonegate removed the offer once the infringement of the trademark was drawn to its attention. Greene King also infringed Wetherspoon’s trademark by copying exactly the wording of its ‘Deli Deal’. After infringement of the Wetherspoon trademark was pointed out, Greene King withdrew the offer. Whitbread’s Premier Inn also recently started promoting a ‘Curry Club’, also infringing Wetherspoon’s trademark and it is believed they have now removed this offer, following a warning from Wetherspoon lawyers. In the latest example, M&B has started using the words ‘Steak Club’ for its Miller & Carter chain and also ‘Chicken Club’ for its Sizzling Pub Company. Wetherspoon chairman Tim Martin said: “It is rather pitiful when large companies like those mentioned use the exact wording for their marketing activity which has usually been running at Wetherspoon pubs for many years. These trademarks have been granted to Wetherspoon because there is a risk that the public is fooled into believing that these offers are being made by Wetherspoon or are connected to Wetherspoon. You would think that these competitors would be able to come up with their own ideas, but they are obviously struggling in this area. I was gobsmacked the other day to walk past a Greene King pub, which is the nearest pub to my house, to discover that they are now running a ‘Fish Friday’. This was a name invented by Wetherspoon employees at a meeting I attended and the same is true of all the other offers which are protected by trademarks. We will unfortunately have to take legal action if these infringements of our trademarks do not cease, but, more importantly, the mere fact that competitors are directly copying our offers will be a serious concern for the shareholders of the offending companies.”

Douglas Jack issues ‘Buy’ note ahead of Restaurant Group AGM: Numis Securities leisure analyst Douglas Jack has issued a ‘Buy’ note, with a price target of 860p, ahead of The Restaurant Group’s AGM this Thursday. He said: “We believe LFL sales, which rose by 2.5% during the first eight weeks, should have at least maintained this momentum in March and April. In our view, there should be upgrade risk to forecasts as this year progresses. LFL sales rose 2.5% over the 8 weeks to 22 February, ahead of a 1.6% increase in the restaurant Peach Tracker, against a backdrop of cinema attendance rising 3.5% and London airport passenger volumes increasing by 6.0%. Total sales were up 9.5% (versus 6.3% for the restaurant Peach Tracker). In our view, LFL sales momentum should at least have been maintained even though the restaurant Peach Tracker fell by 0.4% in March. In March, cinema attendance rose 11.4% and London airport passenger volumes rose 7.8%. In April, weekend cinema box office revenue rose 43%. For the full year, we assume LFL sales rise 3.0%, supported by a strong cinema release schedule and easy admission comps in Q2-4. In 2014, May-December cinema admissions were 6.1% below 2013’s level and 10.2% below 2012’s.We forecast margins rising by 15bps in 2015E, with lower food cost inflation (under 1%) and increasing expansion offsetting higher labour cost inflation (3-4%). Margins should benefit if LFL sales volumes are higher than expected (menu prices rose by less than 1% in October), with each 1% of additional LFL sales worth potentially a 6% increase in PBT and earnings. We forecast 45 new restaurants in 2015E (vs 40 in 2014), comprising: 17 Frankie & Benny’s (F&B), nine Coast to Coast, nine Chiquito, four pub restaurants and six Concessions. We believe the pick-up in Chiquito’s expansion rate reflects its new-design sites trading as well as F&B as well as an acceleration in cinema multiplex expansion in 2015E. We believe there is upgrade risk to our 2015E forecasts (PBT: £86.3m; consensus £88.2m), which anticipate 11% earnings growth, based on 3% LFL sales, 15bps margin growth and no change in debt. We expect RTN to be a beneficiary of rising consumer disposable income and a strong cinema film slate in both 2015E and 2016E.”

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