J D WETHERSPOON PLC
PRELIMINARY RESULTS
(For the 26 weeks ended 29 January 2023)
| FINANCIAL HIGHLIGHTS | Var % | |
| Before separately disclosed items | ||
| Like-for-like sales (vs FY19) | +5.0% | |
| Revenue £916.0m (2019: £889.6m) | +3.0% | |
| Profit before tax £4.6m (20192: £50.3m) | -90.9% | |
| Operating profit £37.4m (20192: £63.5m) | -41.1% | |
| Basic earnings per share 1.0p (20192: 38.3p) | -97.4% | |
| Free cash inflow per share 132.4p (20192: 69.4p) | +90.8% | |
| Half year dividend 0.0p (2019: 4.0p) | -100% | |
| After separately disclosed items1 | ||
| Profit before tax £57.0m (20192: £48.6m) | +17.3% | |
| Operating profit £37.4m (20192: £63.5m) | -41.1% | |
| Basic earnings per share 29.4p (20192: 36.8p) | -20.1% | |
1 Separately disclosed items as disclosed in account note 2.
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:
“Trade for the last seven weeks was 9.1% above the equivalent period in FY19 and 14.9% above the equivalent period in our last financial year (FY22).
“As reported last year, the company has a full complement of staff, although the labour market is competitive, with unemployment, in spite of economic problems, at approximately its lowest level in the last 50 or so years.
“Supply or delivery issues have largely disappeared, for now, and were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic, rather than a consequence of Brexit, as many commentators have argued.
“Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour. The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct.
“Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead.”
Enquiries:
John Hutson Chief Executive Officer 01923 477777
Ben Whitley Finance Director 01923 477777
Eddie Gershon Company spokesman 07956 392234
Photographs are available at: www.newscast.co.uk
Notes to editors
1. J D Wetherspoon owns and operates pubs throughout the UK. The Company aims to provide customers with good-quality food and drink, served by well-trained and friendly staff, at reasonable prices. The pubs are individually designed and the Company aims to maintain them in excellent condition.
2. Visit our website jdwetherspoon.com
3. The financial information set out in the announcement does not constitute the company’s statutory accounts for the periods ended 30 July 2023 or 31 July 2022. The financial information for the period ended 31 July 2022 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors have reported on those accounts: their report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Statutory accounts for 2023 will be delivered to the registrar of companies in due course. This announcement has been prepared solely to provide additional information to the shareholders of J D Wetherspoon, in order to meet the requirements of the UK Listing Authority’s Disclosure and Transparency Rules. It should not be relied on by any other party, for other purposes. Forward-looking statements have been made by the directors in good faith using information available up until the date that they approved this statement. Forward-looking statements should be regarded with caution because of inherent uncertainties in economic trends and business risks.
4. The annual report and financial statements 2022 has been published on the Company’s website on 07 October 2022.
5. The current financial year comprises 52 trading weeks to 30 July 2023.
6. The next trading update will be issued on 10 May 2023.
CHAIRMAN’S STATEMENT
Background
In order to provide perspective on the recent financial performance, sales and profit comparisons are provided, below, with the last full financial year, before the pandemic (FY19), and with the last financial year (FY22). Some other comparisons, including balance sheet comparisons, are with the last financial year only.
Trading Summary
In the first half of the financial year, ended 29 January 2023, like-for-like sales were +5.0%, compared to the six-month period ended 27 January 2019, the last full financial year before the pandemic.
Sales, compared to FY19, improved to +9.1% for the most recent seven weeks to 19 March 2023, being the first seven weeks of the second half of the financial year.
Like-for-like sales were +13.0%, compared to the six-month period ended 23 January 2022 (our last financial year), and were +14.9% for the first seven weeks of the second half of the financial year, compared to the same period in FY22.
Compared to the first half of FY20, like-for-like sales were -0.6% in the six-month period and were +7.0% in the first six weeks of second half, before pubs closed as a result of the first UK lockdown.
Total sales were £916.0 million, an increase of 3.0%, compared to the pre-pandemic 26 weeks ended 27 January 2019. Total sales increased by 13.5% compared to the same period in FY22.
Compared to FY19, like-for-like bar sales decreased by 0.8%, food sales increased by 12.0%, slot/fruit machine sales increased by 44.3% and hotel rooms by 13.0%.
Compared to FY22, like-for-like bar sales increased by 8.4%, food by 19.3%, slot/fruit machines’ by 31.4% and hotel rooms by 7.3%.
The operating profit, before separately disclosed items, was £37.4 million, compared to £63.5 million for the same period in 2019, and to £1.6 million for the same period in in 2022.
The operating margin, before separately disclosed items, was 4.1%, compared to 7.1% in 2019 and 0.2% in 2022.
The profit before tax and separately disclosed items was £4.6 million, compared to £50.3 million in the same period in 2019 and a £26.1 million loss in 2022.
Other Financial Matters
Earnings per share, including shares held in trust by the employee share scheme, before separately disclosed items, were 1.0p (2019: earnings per share of 37.4p; 2022: losses per share of 19.7p).
Total capital investment was £47.8 million (2022: £61.0 million). £10.7 million was invested in new pubs and pub extensions (2022: £25.3 million), £24.3 million in existing pubs and IT (2022: £19.5 million) and £10.0 million in freehold reversions of properties where Wetherspoon was the tenant (2022: £19.2 million).
Separately disclosed items
There was a pre-tax gain of £52.4 million (2022: £13.0 million gain).
£65.1 million of the gain relates to the termination of interest rate swaps in the period. In addition, there was a £8.6 million property impairment charge, in respect of pubs which were deemed unlikely to generate sufficient cash flows, in the future, to support their carrying value.
The company sold or closed 10 pubs during the period. There was a £3.1 million loss on disposal, giving rise to a cash inflow of £2.7 million.
Free Cash Flow
There was a free cash inflow of £166.0 million (2022: £34.5 million outflow), after capital payments of £27.1 million for existing pubs (2022: £19.5 million), £7.5 million for share purchases for employees (2022: £7.1 million) and payments of tax and interest.
The inflow benefited from a profit of £169.4 million following the sale of the company’s interest rate swaps in the period under review. Free cash inflow per share was 132.4p (2022: 27.2p outflow).
Dividends and return of capital
The board has not recommended the payment of an interim dividend (2022: £0). There have been no share buybacks in the financial year to date (2022: £0).
Financing
As at 29 January 2023, the company’s total net debt, excluding derivatives and lease liabilities, was £743.9 million (23 Jan 2022: £920.4m), a decrease of £176.5m.
The half year-end net-debt-to-EBITDA ratio was 6.16 times (2022: 25.63 times).
The company’s debt and liabilities to trade creditors have both reduced since H1 2020, the period before the pandemic started. Debt has decreased by £61 million and trade creditors by £57 million.
£179 million has been invested, since then, in new pubs and freehold reversions.
| FinancialPeriod1 | Net Debt | Trade and other payables | Net Debt + Trade and other payables | Freehold Reversions |
| £m | £m | £m | £m | |
| HY 2020 | 805 | 315 | 1,119 | 71 |
| YE 2020 | 817 | 255 | 1,072 | 28 |
| HY 2021 | 812 | 185 | 997 | 1 |
| YE 2021 | 846 | 260 | 1,105 | 15 |
| HY 2022 | 920 | 245 | 1,165 | 19 |
| YE 2022 | 892 | 283 | 1,174 | 7 |
| HY 2023 | 744 | 259 | 1,003 | 10 |
1 HY refers to half year, and YE refers to year end
The company has an agreement with its lenders, who have been extremely supportive throughout the pandemic, that waives its debt covenants until October 2023 and replaces them with a minimum liquidity requirement of £100 million for the first half of the current financial year and relaxed leverage covenants for the second half. At the half-year-end liquidity was £231.9 million.
In November 2022, the company repaid government “CLBILS” loans of £100 million, which had been due to mature in August 2023.
The company has total available finance facilities of £983 million.
The company has fixed its SONIA (SONIA is a replacement for LIBOR) interest rates in respect of £580 million until July 2023 and £400 million until October 2025. The weighted average cost of the swaps, excluding the banks’ margin, is currently 4.28%. The total cost of the company’s debt, including the banks’ margin was 6.21%, in the last 26 weeks.
The cost of the current swaps in place have been illustrated in the table below:
| Swap Value | Start Date | End Date | Weighted Average % |
| £580m | 31/10/2022 | 31/07/2023 | 4.28% |
| £400m | 01/08/2023 | 31/10/2025 | 4.67% |
Property
The company opened two pubs during the first six months and sold or closed 11, resulting in a trading estate of 843 pubs at the half year end.
As at 24 July 2011, the company’s freehold/ leasehold split was 43.4%/56.6%. As at 29 January 2023, as a result of investment in freehold reversions (relating to pubs where the company was previously a tenant) and freehold pub openings, the split was 69.0%/31.0%.
Taxation
Th e total tax charge for the year is £20.0 million (2022: £1.6 million credit). This consists of a £6.7 million (2022: £0.4 million) ‘cash’ tax and a £13.3 million ‘accounting’ tax charge (2022: £1.2 million credit).
The accounting tax charge comprises two parts: the actual current tax charge (the ‘cash’ tax) and the deferred tax charge (the ‘accounting’ tax). The tax losses that arose in previous financial years have been carried forward for use against profits in this year and future years.
The company is seeking a refund of historic excise duty from HMRC, totalling £0.5 million, in relation to goods sent to the Republic of Ireland, when Wetherspoon pubs first opened in that country. The company has been charged excise duty on the same goods twice, as they were purchased in the UK, and excise duty was paid in full. Irish excise duty was then paid in addition.
Owing to a paperwork error, in the early days of our business in the Republic, which the company has sought to rectify, it has, to date, been unable to reclaim this duty, even though it is transparently clear that the duty has been paid.
Scotland Business Rates
Business rates are supposed to be based on the value of the building, rather than the level of trade of the tenant. This should mean that the rateable value per square foot is approximately the same for comparable pubs in similar locations.
However, as a result of the valuation approach adopted by the government “Assessor” in Scotland, Wetherspoon often pays far higher rates per square foot than its competitors.
This is highlighted (in the tables below) by assessments for the Omni Centre, a modern leisure complex in central Edinburgh, where Wetherspoon has been assessed at more than double the rate per square foot of the average of its competitors, and for The Centre in Livingston (West Lothian), a modern shopping centre, where a similar anomaly applies.
As a result of applying valuation practice from another era, which assumed that pubs charged approximately the same prices, the raison d’être of the rating system – that rates are based on property values, not the tenants trade – has been undermined.
Similar issues are evident in Galashiels, Arbroath, Wick, Anniesland – and indeed most Wetherspoon pubs in Scotland. In effect, the application of the rating system in Scotland discriminates against businesses like Wetherspoon, which have lower prices, and encourages businesses to charge higher prices.
As a result, consumers are likely to pay higher prices, which cannot be the intent of rating legislation.
| Omni Centre, Edinburgh (April 2021 – March 2022) | |||
| Occupier Name | Rateable Value (RV) | Customer Area (ft²) | Rates per square foot |
| Playfair (JDW) | £218,750 | 2,756 | £79.37 |
| Unit 9 (vacant) | £48,900 | 1,053 | £46.44 |
| Unit 7 (vacant) | £81,800 | 2,283 | £35.83 |
| Frankie & Benny’s | £119,500 | 2,731 | £43.76 |
| Nando’s | £122,750 | 2,804 | £43.78 |
| Slug & Lettuce | £108,750 | 3,197 | £34.02 |
| The Filling Station | £147,750 | 3,375 | £43.78 |
| Tony Macaroni | £125,000 | 3,427 | £36.48 |
| Unit 6 (vacant) | £141,750 | 3,956 | £35.83 |
| Cosmo | £200,000 | 7,395 | £27.05 |
| Average (exc JDW) | £121,800 | 3,358 | £38.55 |
| The Centre, Livingston (April 2021 – March 2022) | |||
| Occupier Name | Rateable Value (RV) | Customer Area (ft²) | Rates per square foot |
| The Newyearfield (JDW) | £165,750 | 4,090 | £40.53 |
| Paraffin Lamp | £52,200 | 2,077 | £25.13 |
| Wagamana | £67,600 | 2,096 | £32.25 |
| Nando’s | £80,700 | 2,196 | £36.75 |
| Chiquito | £68,500 | 2,221 | £30.84 |
| Ask Italian | £69,600 | 2,254 | £30.88 |
| Pizza Express | £68,100 | 2,325 | £29.29 |
| Prezzo | £70,600 | 2,413 | £29.26 |
| Harvester | £98,600 | 3,171 | £31.09 |
| Pizza Hut | £111,000 | 3,796 | £29.24 |
| Hot Flame | £136,500 | 4,661 | £29.29 |
Wetherspoon News
There are two main issues discussed in the latest edition of Wetherspoon News, the company magazine, read by an estimated two million people.
The first relates to the important issue of tax equality between supermarkets and pubs. Currently, pubs pay far more VAT and business rates per pint than supermarkets.
The second relates to the government and wider political response to Covid-19, vital for pubs, but also for health and the wider economy.
The Covid-19 discussion contains articles by Professor Francois Balloux of University College London Genetics Institute, writing in the Guardian, Professor Robert Dingwall of Nottingham Trent University, writing in the Telegraph and by other respected commentators, including former Supreme Court judge, Jonathan Sumption and Spectator editor Fraser Nelson.
It is important for shareholders and the public to make up their own mind on this issue, rather than waiting a possible seven years for a government enquiry, by which time many horses may have bolted.
The articles referred to above can be found via the link below
How pubs contribute to the economy
Wetherspoon and other pub and restaurant companies have always generated far more in taxes than are earned in profits. Wetherspoon, its customers and staff, generated total taxes in FY19, before the pandemic, of £763.6 million. This equated to one pound in every thousand of UK government revenue.
In the financial year ended 31 July 2022, the company generated taxes of £662.7 million.
The table below shows the £5.6 billion of tax revenue generated by the company, its staff and customers in the last 9.5 years. Each pub, on average, generated £6.3 million in tax during that period. The tax generated by the company, during this 9.5-year period, equates to approximately 27 times the company’s profits after tax.
| 2023 H1 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | TOTAL | |
| 2014 to 2023 H1 | |||||||||||
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| VAT | 177.1 | 287.7 | 93.8 | 244.3 | 357.9 | 332.8 | 323.4 | 311.7 | 294.4 | 275.1 | 2,698.2 |
| Alcohol duty | 81.3 | 156.6 | 70.6 | 124.2 | 174.4 | 175.9 | 167.2 | 164.4 | 161.4 | 157 | 1,433.0 |
| PAYE and NIC | 58.7 | 141.9 | 101.5 | 106.6 | 121.4 | 109.2 | 96.2 | 95.1 | 84.8 | 78.4 | 993.8 |
| Business rates | 26.4 | 50.3 | 1.5 | 39.5 | 57.3 | 55.6 | 53 | 50.2 | 48.7 | 44.9 | 427.4 |
| Corporation tax | 8.7 | 1.5 | – | 21.5 | 19.9 | 26.1 | 20.7 | 19.9 | 15.3 | 18.4 | 152.0 |
| Corporation tax credit (historic capital allowances) | – | – | – | – | – | – | – | – | (2) | – | (2.0) |
| Fruit/slot Machine duty | 7.6 | 12.8 | 4.3 | 9 | 11.6 | 10.5 | 10.5 | 11 | 11.2 | 11.3 | 99.8 |
| Climate change levies | 8.1 | 9.7 | 7.9 | 10 | 9.6 | 9.2 | 9.7 | 8.7 | 6.4 | 6.3 | 85.6 |
| Stamp duty | 0.7 | 2.7 | 1.8 | 4.9 | 3.7 | 1.2 | 5.1 | 2.6 | 1.8 | 2.1 | 26.6 |
| Sugar tax | 1.4 | 2.9 | 1.3 | 2 | 2.9 | 0.8 | – | – | – | – | 11.3 |
| Fuel duty | 0.9 | 1.9 | 1.1 | 1.7 | 2.2 | 2.1 | 2.1 | 2.1 | 2.9 | 2.1 | 19.1 |
| Carbon tax | – | – | – | – | 1.9 | 3 | 3.4 | 3.6 | 3.7 | 2.7 | 18.3 |
| Premise licence and TV licences | 0.3 | 0.5 | 0.5 | 1.1 | 0.8 | 0.7 | 0.8 | 0.8 | 1.6 | 0.7 | 7.8 |
| Landfill tax | – | – | – | – | – | 1.7 | 2.5 | 2.2 | 2.2 | 1.5 | 10.1 |
| Employee support grants | – | (4.4) | (213) | (124.1) | – | – | – | – | – | – | (341.5) |
| Eat out to help out | – | – | (23.2) | – | – | – | – | – | – | – | (23.2) |
| Local Government Grants | – | (1.4) | (11.1) | – | – | – | – | – | – | – | (12.5) |
| TOTAL TAX | 371.1 | 662.7 | 37 | 440.7 | 763.6 | 728.8 | 694.6 | 672.3 | 632.4 | 600.5 | 5,522.5 |
| TAX PER PUB | 0.44 | 0.78 | 0.04 | 0.53 | 0.87 | 0.83 | 0.77 | 0.71 | 0.67 | 0.66 | 6.30 |
| TAX AS % OF NET SALES | 40.52% | 38.10% | 4.80% | 34.90% | 42.00% | 43.00% | 41.80% | 42.10% | 41.80% | 42.60% | 37.16% |
| PROFIT/(LOSS)AFTER TAX | 1.3 | -24.9 | -146.5 | -38.5 | 79.6 | 83.6 | 76.9 | 56.9 | 57.5 | 58.9 | 204.8 |
Note – this table is prepared on a cash basis.
IFRS 16 was implemented in the year ending 26 July 2020 (FY20). From this period all profit numbers in the above table are on a Post-IFRS 16 basis. Prior to this date all profit numbers are on a Pre-IFRS 16 basis.
Corporate Governance
Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.
As a result of the “nine-year rule”, limiting the tenure of NEDs and the presumption in favour of “independent”, part-time chairmen, boards are often composed of short-term directors, with very little representation from those who understand the company best – people who work for it full-time, or have worked for it full-time.
Wetherspoon’s review of the boards of major banks and pub companies, which teetered on the edge of failure in the 2008-2010 recession, highlighted the short “tenure”, on average, of directors.
In contrast, Wetherspoon noted the relative success, during this fraught financial period, of pub companies Fuller’s and Young’s, the boards of which were dominated by experienced executives, or former executives.
As a result, Wetherspoon has increased the level of executive experience on the Wetherspoon board by appointing four “worker directors”.
All four worker directors started on the “shop floor” and eventually became successful pub managers. Three have been promoted to area management roles. They have worked for the company for an average of 24 years.
Board composition cannot guarantee future success, but it makes sensible decisions, based on experience at the coalface of the business, more likely.
The UK Corporate Governance Code 2018 (the “Code”) is a vast improvement on previous codes, emphasising the importance of employees, customers and other stakeholders in commercial success. It also emphasises the importance of its ‘comply or explain’ ethos, and the consequent need for shareholders to engage with companies in order to understand their explanations.
A major impediment to the effective implementation of comply or explain seems to be the undermanning of the corporate governance departments of major shareholders.
For example, Wetherspoon met a compliance officer from one major institution who is responsible for around 400 companies – an impossible task, since the written regulatory output of each company is vast, coupled with the practical impossibility of meeting with so many companies in any meaningful way.
As a result, it appears that compliance officers and governance advisors, in practice, often rely on a “tick-box” approach, which is, itself, in breach of the Code.
A further issue is that many major investors, in their own companies, for sensible reasons, do not observe the nine-year rule, and other rules, themselves. An approach of “do what I say, not what I do” is clearly unsustainable.
Further progress
As always, the company has tried to improve as many areas of the business as possible, on a week-to-week basis, rather than aiming for ‘big ideas’ or grand strategies.
Frequent calls on pubs by senior executives, the encouragement of criticism from pub staff and customers and the involvement of pub and area managers, among others, in weekly decisions, are the keys to success.
Wetherspoon paid £15.0 million in respect of bonuses and free shares to employees in the period ending 29 January 2023, of which 95.9% was paid to staff below board level and 83.0% was paid to staff working in our pubs.
Wetherspoon has been the biggest corporate sponsor of ‘Young Lives vs Cancer’ (previously CLIC Sargent), having raised a total of £21.3 million since 2002. During the pandemic, our contributions had been reduced, but since the reopening of our pubs there have been great efforts seen and our contributions have bounced back significantly.
Wetherspoon has been recognised by The Top Employers Institute as a ‘Top Employer in the United Kingdom’ for 2023. This is the 18th time that Wetherspoon has been certified by the Institute.
Bonuses and Free Shares
As indicated above, Wetherspoon has, for many years (see table below), operated a bonus and share scheme for all employees.
| Financial year | Bonus and free shares | (Loss)/Profit after tax1 | Bonus and free shares as % of profits |
| £m | £m | ||
| 2007 | 19 | 47 | 41% |
| 2008 | 16 | 36 | 45% |
| 2009 | 21 | 45 | 45% |
| 2010 | 23 | 51 | 44% |
| 2011 | 23 | 52 | 43% |
| 2012 | 24 | 57 | 42% |
| 2013 | 29 | 65 | 44% |
| 2014 | 29 | 59 | 50% |
| 2015 | 31 | 57 | 53% |
| 2016 | 33 | 57 | 58% |
| 2017 | 44 | 77 | 57% |
| 2018 | 43 | 84 | 51% |
| 2019 | 46 | 80 | 58% |
| 2020 | 33 | (39) | – |
| 2021 | 23 | (146) | – |
| 2022 | 27 | (25) | – |
| 2023 H1 | 15 | 1 | 1,500% |
| Total | 479 | 558 | 51.6%2 |
1 (IFRS 16 was implemented in the year ended 26 July 2020 (FY20). From this period all profit numbers in the above table are on a Post-IFRS 16 basis. Prior to this date all profit numbers are on a Pre-IFRS 16 basis.
2 Excludes 2020, 2021 and 2022.
Length of Service
The attraction and retention of talented pub and kitchen managers is important for any hospitality business. As the table below demonstrates, the retention of managers has improved, even during the pandemic.
| Financial year | Average pub manager length of service | Average kitchen manager length of service |
| (Years) | (Years) | |
| 2013 | 9.1 | 6.0 |
| 2014 | 10.0 | 6.1 |
| 2015 | 10.1 | 6.1 |
| 2016 | 11.0 | 7.1 |
| 2017 | 11.1 | 8.0 |
| 2018 | 12.0 | 8.1 |
| 2019 | 12.2 | 8.1 |
| 2020 | 12.9 | 9.1 |
| 2021 | 13.6 | 9.6 |
| 2022 | 13.9 | 10.4 |
| 2023 H1 | 14.1 | 10.6 |
Food Hygiene Ratings
Wetherspoon has always emphasised the importance of hygiene standards.
We now have 769 pubs rated on the Food Standards Agency’s website (see table below). The average score is 4.98, with 98% of the pubs achieving a top rating of five stars. We believe this to be the highest average rating for any substantial pub company.
In the separate Scottish scheme, which records either a ‘pass’ or a ‘fail’, all of our 59 pubs have passed.
| Financial Year | Total Pubs Scored | Average Rating | Pubs with highest Rating % |
| 2013 | 771 | 4.85 | 87.0 |
| 2014 | 824 | 4.91 | 92.0 |
| 2015 | 858 | 4.93 | 94.1 |
| 2016 | 836 | 4.89 | 91.7 |
| 2017 | 818 | 4.89 | 91.8 |
| 2018 | 807 | 4.97 | 97.3 |
| 2019 | 799 | 4.97 | 97.4 |
| 2020 | 781 | 4.96 | 97.0 |
| 2021 | 787 | 4.97 | 98.4 |
| 2022 | 775 | 4.98 | 98.6 |
| 2023 H1 | 769 | 4.98 | 98.0 |
Property litigation
As previously reported, Wetherspoon agreed on an out-of-court settlement with developer Anthony Lyons, formerly of property leisure agent Davis Coffer Lyons, in 2013 and received approximately £1.25 million from Mr Lyons.
The payment relates to litigation in which Wetherspoon claimed that Mr Lyons had been an accessory to frauds committed by Wetherspoon’s former retained agent Van de Berg and its directors Christian Braun, George Aldridge and Richard Harvey. Mr Lyons denied the claim – and the litigation was contested.
The claim related to properties in Portsmouth, Leytonstone and Newbury. The Portsmouth property was involved in the 2008/9 Van de Berg case itself.
In that case, Mr Justice Peter Smith found that Van de Berg, but not Mr Lyons (who was not a party to the case), fraudulently diverted the freehold from Wetherspoon to Moorstown Properties Limited, a company owned by Simon Conway. Moorstown leased the premises to Wetherspoon- a pub called The Isambard Kingdom Brunel.
The properties in Leytonstone and Newbury (the other properties in the case against Mr Lyons) were not pleaded in the 2008/9 Van de Berg case.
Leytonstone was leased to Wetherspoon and trades today as The Walnut Tree public house. Newbury was leased to Pelican plc and became Café Rouge.
As we have also reported, the company agreed to settle its final claim in this series of cases and accepted £400,000 from property investor Jason Harris, formerly of First London and now of First Urban Group. Wetherspoon alleged that Harris was an accessory to frauds committed by Van de Berg. Harris contested the claim and has not admitted liability.
Before the conclusion of the above cases, Wetherspoon also agreed on a settlement with Paul Ferrari of London estate agent Ferrari Dewe & Co, in respect of properties referred to as the ‘Ferrari Five’ by Mr Justice Peter Smith.
Press corrections
The press and media have generally been fair and accurate in reporting on Wetherspoon over the decades. However, in the febrile atmosphere of the first lockdown, something went awry and a number of harmful inaccuracies were published.
In order to try and set the record straight, a special edition of Wetherspoon News was published, which includes details of the resulting apologies and corrections, which can be found on the company’s website
( https://www.jdwetherspoon.com/~/media/files/pdf-documents/wetherspoon-news/does-truth-matter_.pdf ).
Current trading and outlook
As indicated above, trade for the last seven weeks was 9.1% above the equivalent period in FY19 and 14.9% above the equivalent period in our last financial year (FY22).
As reported last year, the company has a full complement of staff, although the labour market is competitive, with unemployment, in spite of economic problems, at approximately its lowest level in the last 50 or so years.
Supply or delivery issues have largely disappeared, for now, and were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic, rather than a consequence of Brexit, as many commentators have argued.
Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour. The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct.
Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead.