JD Wetherspoon PLC has recorded higher sales from a reduced pub estate, thanks to a more than 20% increase in sales per pub since before the Covid-19 pandemic.
Wetherspoons currently operates 801 pubs and hotels across the UK and Ireland. In its financial year so far, it has sold or surrendered 26 pubs while opening only 2 new pubs. A further 10 pubs remain on the market for sale, the company said.
Like-for-like sales were up 5.8% on a year before in the 10 weeks that ended on Sunday. In the financial year to date, like-for-like sales are up 7.7%, Wetherspoons said.
The company’s financial year ends later this month. It said it will release results on October 4.
Annual profit will be in line with market expectations, Wetherspoon said. Pretax profit was £90.5 million in financial 2023.
Wetherspoon said it received £8.7 million in net cash inflow from the pub sales. It estimates net debt will be £670 million at year-end. This would be up slightly from £641.9 million on July 30, 2023.
The company said it has agreed a new four-year banking facility for £840 million ‘on attractive terms’.
The chairman of JD Wetherspoon, Tim Martin, said:
“The gradual recovery in sales and profits, following the pandemic, has continued in the current financial year.
“Total sales are, again, at record levels, with fewer pubs.”
“Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs.”
“For example, compared to the 2019 financial year, labour in this financial year has increased by approximately £164 million, energy by £28 million, repairs (also affected by labour costs) by £38 million and interest (excluding IFRS 16 interest) by £16 million.”
“Notwithstanding these cost pressures, the company continues to endeavour to “widen the moat” by investing in areas such as beer gardens, staff rooms, above-bar glass racks and improved beer dispense systems.”
“Staff retention is at its highest ever level. 11,066 staff, an average of 14 per pub, have worked for the company for 5 years or more. Of those, 3,895 have worked for 10 years and 632 for 20 years.
“We are also continuing to open new pubs, with openings in the next few months, for example, in Waterloo and Fulham Broadway stations in London, and in Marlow in Buckinghamshire.”
“The average Wetherspoon pub has generated taxes of one sort or another of £7 million in the last 10 years, as well as generating considerable employment and social benefits. The last government failed to implement tax equality between pubs and supermarkets, leading to pub closures and underinvestment – Wetherspoon hopes that the current Chancellor, with a Bank of England pedigree, will understand how many beans make five, and rectify this inequality.”
“The company continues to expect profits in the current financial year to be in line with market expectations.”
