J D Wetherspoon plc has issued its pre-closing trading statement for the financial year to 24 July 2016, with the preliminary results due to be announced on 09 September 2016. Chairman Tim Martin also used the opportunity to hit out at the doom mongers following the aftermath of the EU.referendum
For the 11 weeks to 10 July 2016 like-for-like sales increased by 4.0% and total sales increased by 3.8%. In the year to date (50 weeks to 10 July 2015) like-for-like sales increased by 3.4% and total sales increased by 5.5%.
The full-year operating margin before exceptional items and before a £3.8m gain on property is expected to be around 6.8%, compared to 7.4% last year.
The Company has opened 13 new pubs since the start of the financial year, has sold 29 and has closed 11. We expect to open 16 new pubs in this financial year. There will be around £13m of exceptional, non-cash losses in this financial year, which are mainly associated with pub disposals and closures.
The Company remains in a sound financial position. Net debt at the end of this financial year is currently expected to be around £670m.
The company has bought back 5.7m shares, at a total cost of £39m, since the start of the financial year.
The chairman of Wetherspoon, Tim Martin, said:
“As most people will be aware, an unusual number of forecasts for the UK economy have been made in the run-up to, and the aftermath of, the referendum. Most of the forecasts from representatives of institutions which are normally responsible for financial stability were extremely negative.
“For example, the International Monetary Fund`s Christine Lagarde said in May that a leave vote in the referendum would be “pretty bad to very, very bad.”
“An IMF report additionally said that a leave vote would have a “negative and substantial effect”.
“Similar comments were made by the Bank of England Governor Mark Carney. H.M. Treasury also warned that Brexit would cost the average household about £4,000 per annum in the future. The CBI, Goldman Sachs, Morgan Stanley, PWC and many FTSE 100 CEOs, among others, supported this negative view.
“The Chancellor of the Exchequer George Osborne repeatedly warned that mortgage and interest rates were likely to rise in the event of a leave vote and threatened an emergency budget to increase taxes and to reduce public expenditure.
“Osborne`s stance was supported by Prime Minister David Cameron, who also forecast an increased likelihood of war and genocide.
“Unbeknown to most voters, one of the “architects” of the Remain campaign, which devised the above approach, was Peter Mandelson (“How the struggle for Europe was lost”, Peter Mandelson, Financial Times, 2 July), who worked closely with Cameron, Osborne and others.
“In my opinion, the above individuals and organisations are either dishonest, or they have a poor understanding of economics, since democracy and prosperity are closely linked and the EU is clearly undemocratic. By voting to restore democracy in the UK, I believe the UK’s economic prospects will improve, although it is quite possible that the unprecedented and irresponsible doom-mongering, outlined above, may lead to some kind of slowdown.
“In spite of the dire warnings above, Wetherspoon trade strengthened slightly in recent weeks and we consequently anticipate a modestly improved outcome for this financial year. Caution should be exercised in extrapolating current levels of sales growth for future years.”