JD Wetherspoon is on course for a record year, the company has said, after its sales in Easter week were the highest they have ever been.
Sales in the current financial year are likely to reach record levels, Wetherspoons said in its latest (Q3) trading update.
The company said like-for-like sales increased by 9.1% in the 13 weeks to 30 April 2023 compared to the same period in the last full financial year before the pandemic, which ended on 28 July 2019.
Year-to-date sales increased by 6.4% compared to the same year. Sales in Easter week were the highest-ever for the company, and sales in the current financial year are “likely to be a record”. Compared to FY22, like-for-like sales increased by 12.2% in the third quarter and by 12.7% year-to-date.
The first weekend in May, a bank holiday, was “exceptionally strong”, and the second weekend, relating to the Coronation, was “slightly less strong”, with a “noticeably quiet Saturday” possibly benefitting sales in the off-trade more than the on-trade.
The company said: “Wetherspoon, its customers and employees generated £764m of taxes in FY19, approximately one pound in every thousand collected by the government in that year. Since sales in the current year are likely to be at record levels, taxes are also likely to be at a record high. The employment and tax contribution of the hospitality industry to the UK economy is often underestimated, or ill-understood, by the political powers-that-be. In fact, the industry contributes far more in both areas than other, perhaps more glamorous, businesses.”
In the last quarter, the company opened one pub (year-to-date three pubs) and sold, closed or surrendered to the landlord ten pubs (year-to-date 21 pubs). Most of the pubs were smaller and older, or where the company has a second pub in reasonably close proximity. There was a net cash inflow of £4.7m from the 21 disposals. A total of 30 trading pubs remain on the market, or are under offer. The company currently has a trading estate of 834 pubs.
Staff numbers at the pub network were also up, according to the trading update.
The company said it employed 42,839 people at the end of the third quarter, an increase of 940 compared to the end of the pre-pandemic year of 2019.
As at 30 April 2023, net debt was £738m, approximately £67m lower than the company reported in its interim results for FY20, immediately before the pandemic. Since then, it has invested £185m in new pubs and freehold reversions and has raised equity of approximately £240m. The company had financial headroom of £241m at the end of the quarter.
Chairman Tim Martin, said: “Lockdowns and associated restrictions have had more profound and longer-lasting consequences than most economists, politicians and commentators predicted. Sales in the last quarter have continued their positive momentum, although inflation, especially in labour, energy and food costs, remains a more intractable issue. In order to bear down on inflation, political parties should encourage free enterprise, rather than a reliance on additional regulations. A lack of understanding, among some senior politicians, about the need to encourage a successful free market economy, presents a real threat to the future prosperity of the country.”