07 October 2022
J D WETHERSPOON PLC
PRELIMINARY RESULTS
(For the 53 weeks ended 31 July 2022)
| FINANCIAL HIGHLIGHTS | Var % | |
| Before exceptional items | ||
| Ÿ Like-for-like sales | -4.7% | |
| Ÿ Revenue £1,740.5m (2019: £1,818.8m) | -4.3% | |
| Ÿ (Loss)/profit before tax -£30.4m (20192: £102.5m) | +ve to -ve | |
| Ÿ Operating profit £25.7m (20192: £131.9m) | -80.5% | |
| Ÿ (Losses)/earnings per share -19.6p (20192: 75.5p) | +ve to -ve | |
| Ÿ Free cash inflow per share 17.3p (20192: 92.0p) | -81.2% | |
| Ÿ Full year dividend 0.0p (2019: 12.0p) | -100% | |
| After exceptional items1 | ||
| Ÿ Profit before tax £26.3m (20192: £95.4m) | -72.4% | |
| Ÿ Operating profit £55.1m (20192: £131.9m) | -58.2% | |
| Ÿ Earnings per share 15.2p (20192: 69.0p) | -77.9% | |
1 Exceptional items as disclosed in account note 4.
2 2019 figures are prior to the adoption of IFRS 16 (Lease Accounting)
Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said:
“In the first 9 weeks of the current financial year, to 2 October 2022, like-for-like sales increased by 10.1%, compared to the 9 weeks to 3 October 2021.
“The company has improved its prospects in a number of ways in recent financial years – we own an increasing percentage of freehold properties; the balance sheet has been strengthened; interest rates have been fixed at low levels until 2031; we have a large contingent of long-serving pub staff and underlying sales are improving.
“However, as a result of the previously reported increases in labour and repair costs and the potentially adverse effects of rises in interest rates and energy costs on the economy, firm predictions are hard to make.
“Perhaps the biggest threat to the hospitality industry is the possibility of further lockdowns and restrictions.
Those interested in the UK government response to the pandemic may like to read the reports by Professor Francois Balloux, director of the UCL Genetics Institute, in the Guardian, and by Professor Robert Dingwall, of Trent University, in the Telegraph (see pages 54 to 56 of Wetherspoon News
“The conclusion of Professor Balloux, broadly echoed by Professor Dingwall, based on an analysis by the World Health Organisation of the pandemic, is that Sweden (which did not lock down), had a Covid-19 fatality rate “of about half the UK’s” and that “the worst performer, by some margin, is Peru, despite enforcing the harshest, longest lockdown.”
“Professor Balloux concludes that “the strength of mitigation measures does not seem to be a particularly strong indicator of excess deaths.”
“Indeed, as some commentators have noted, lockdowns were not contemplated in the UK’s laboriously compiled pre-pandemic plans. It appears that these plans were jettisoned, early on in the pandemic, in favour of copying China’s lockdown approach – an example, perhaps, of Warren Buffett’s so-called “institutional imperative” – “everyone else has locked down, so we will, too”.
“The other major threat to the hospitality industry is the huge and unjustifiable tax advantage that supermarkets enjoy. The hospitality industry pays far higher levels of VAT and business rates than supermarkets. This competitive disadvantage has had an increasingly debilitating impact on the hospitality industry and will undoubtedly result in long-term financial weakness vis a vis supermarkets – which will also be harmful to employees, the Treasury and the overall economy.
“These caveats aside, in the absence of further lockdowns or restrictions, the company is cautiously optimistic, for the reasons we have outlined, about future prospects.