JD Wetherspoon Posts Positive End-Of-Year StatementJD Wetherspoon has posted positive growth in like-for-like sales of 5% in its full-year statement, but will need to maintain growth in turbulent trading conditions to maintain stability in the current year.
The pub brand placed total revenue at £1.69b for the year ending 29 July, rising marginally from £1.66b the previous period.
Meanwhile, total debt rose to £726.2m from £696.3m, representing 3.4 times EBITDA. The company sold or closed 18 pubs over the period and opened six, leaving the tally of sites at 883. Capital investment stood at £110.1m.
Sales were maintained in all sectors at a time when many have had to fall back on their wet offering to offset losses to food operations, spurred on by the hot weather and the World Cup. Wet and food sales both rose by 5.1% over the period, while machine sales grew by 2.9% and accommodation by 2.3%.
Current trading and outlook
In a statement the company said that there will be a huge gain for business and consumers if the UK copies the free trade approach of countries like Singapore, Switzerland, New Zealand, Australia, Canada and Israel, by slashing protectionist EU import taxes (‘tariffs’), on leaving the EU in March next year. These invisible tariffs are charged on over 12,000 non-EU products, including rice, oranges, coffee, wine and children’s clothes. The proceeds are collected by the UK taxman and sent to Brussels.
Ending tariffs will reduce shop and pub prices, improve living standards, and will help non-EU suppliers, currently discouraged by tariffs, quotas and the extensive paraphernalia of EU protectionism. If parliament votes to end tariffs and rejects the ‘Chequers Deal’, consumers and business will benefit additionally by avoiding a cost of £39 billion, or £60 million per UK constituency, in respect of the EU ‘divorce payment’ – for which there is no legal obligation.
Parliament can also regain control of UK fishing waters, where 60% of the catch is currently taken by EU boats.Unfortunately, some individuals, businesses and business organisations have mistakenly, or misleadingly, repeated the myth that food prices will rise without a ‘deal’ with the EU. In fact, the only way prices can rise post-Brexit is if parliament votes to impose tariffs. The EU will have no say in the matter, provided that the government does not sign away the UK’s rights in a ‘deal’ in the meantime.
Like-for-like sales in the six weeks to 9 September increased by 5.5%. The company has had a reasonable start to the financial year, but taxes, labour and interest costs are expected to be higher than those of last year, so we estimate that like-for-like sales growth of about 4.0% will be required for the company to match last year’s record profits.
Martin added: ‘The company has had a reasonable start to the financial year, but taxes, labour and interest costs are expected to be higher than those of last year, so we estimate that like-for-like sales growth of about 4.0% will be required for the company to match last year’s record profits.”