JD Whetherspoon reports slight growth in end of year statement

by XPRESS, 14 September 2018

JD Wetherspoon has reported a 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%.

Chief executive Tim Martin said the positive trend was continuing beyond the period, stating that: “Like-for-like sales in the six weeks to 9 September increased by 5.5%.”

The chain recently committed to cutting down on big-name European brands as Brexit approaches. However, while Martin has been an ardent supporter of a no-deal Brexit, the move is also expected to cut overheads for the firm, which needs to grow like-for-likes by 4% to maintain sales in the current year.

Martin used the financial statement to say that food prices were likely to fall if Brexit secretary Dominic Raab secured a no-deal Brexit – a point disputed by many in a scenario branded as unlikely by the minister and his department.

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.”