12 September 2014
Like-for-like sales increased by 5.5%, with total sales of £1,409.3 million, an increase of 10.0% (2013: 7.0%). Like-for-like bar sales increased by 2.7% (2013: 3.8%), food sales by 12.0% (2013: 10.9%) and slot/fruit machine sales decreased by 3.1% (2013: increased by 0.4%).
Operating profit before exceptional items increased by 3.8% to £115.6 million (2013: £111.3 million) and, after exceptional items, increased by 26.3% to £115.6 million (2013: £91.5 million). The operating margin, before exceptional items, decreased to 8.2% (2013: 8.7%), mainly as a result of increases in staff costs and repairs. The operating margin after exceptional items was 8.2% (2013: 7.1%).
Profit before tax and exceptional items increased by 3.1% to £79.4 million (2013: £76.9 million) and, after exceptional items, increased by 37.1% to £78.4 million (2013: £57.1 million). Earnings per share (including shares held in trust by the employee share scheme), before exceptional items, increased by 4.9% to 47.0p (2013: 44.8p). Earnings per share (including shares held in trust by the employee share scheme), after exceptional items, decreased by 10.4% to 32.8p (2013: 36.6p), owing to a deferred tax credit in the previous year.
Net interest was covered 3.2 times by operating profit before exceptional items (2013: 3.2 times) and 3.1 times by operating profit after exceptional items (2013: 2.7 times). Total capital investment was £177.5 million in the period (2013: £101.8 million), with £97.7 million on new pub openings (2013: £53.2 million), £56.2 million on existing pubs and IT infrastructure (2013: £40.9 million) and £23.6 million on freehold reversions, where Wetherspoon was already a tenant, and investment properties (2013: £7.7 million).
Exceptional items totalled £17.7 million (2013: £19.0 million). An exceptional item of £1.0 million relates to the interest repayment to HMRC, following the unsuccessful outcome of the ‘Rank’ gaming duties case. In addition, an agreement was reached with HMRC in respect of a long-outstanding dispute over the treatment of capital allowances. As a result of this agreement, tax computations have been resubmitted and have resulted in a claim for a tax refund of £4.4 million and a deferred tax liability of £21.1 million. This has resulted in an exceptional tax charge £16.7 million.
Free cash flow, after capital investment of £56.2 million on existing pubs (2013: £40.9 million), £7.3 million in respect of share purchases for employees (2013: £8.8 million) and payments of tax and interest, increased by £27.6 million to £92.9 million (2013: £65.3 million), partly owing to a working capital inflow of £29.9 million in the year under review, compared with an outflow of £6.0 million in the previous year. Free cash flow per share was 74.1p (2013: 51.8p).
Commenting on the results, Tim Martin, the chairman of J D Wetherspoon plc, said:
“I am pleased to report another year of progress, with record sales, profit and earnings per share. The company generated £600.2 million in taxes, an increase of £48.7 million, compared with the previous year, equivalent to £662,000 per pub. We now employ over 34,000 people, an increase of over 3,000 in the last year. In addition, £29.2 million in bonuses and free shares was paid to employees, 82% to those working in our pubs.
“The biggest danger to the pub industry is the VAT disparity between supermarkets and pubs. Wetherspoon, along with many pub and restaurant companies, is supporting Jacques Borel’s VAT Club on Tax Equality Day (Wednesday 24 September 2014) to publicise this inequality.
“A similar danger relates to the general tone of corporate governance advice and practice which has helped to create unstable board rooms, often preoccupied by the wrong considerations. For example, many do not even recognise the danger from the VAT disparity, despite the high weekly level of pub closures which has lasted for many years.
“In the six weeks to 7 September 2014, like-for-like sales increased by 6.3%, with total sales increasing by 11.4%.
The company is aiming for a reasonable outcome in the current financial year.”
|Q4 Interim Management Statement||9 July 2014|
|Preliminary Results||12 September 2014|
|Q1 Interim Management Statement||November 2014|
|AGM||13 November 2014|