Wetherspoon sales stabilise amid profit fall
Published
11th Sep 2009
JD Wetherspoon, the pub owner, reported a 17 per cent fall in full-year profits after the company was forced to writedown the value of pubs that traded badly in the depths of the recession.
Pre-tax income totalled £45 million in the year to July 26, down from £54.2 million, following exceptional charges of £21.1 million. Those costs included £6.5 million of pub write-offs, and a further £9.4 million knocked off the company's fixed assets.
However, Wetherspoon showed signs of stabilisation amid the downturn, with like-for-like sales growth remaining steady at 1.2 per cent in the six weeks following the company's year end, matching the growth rate seen for the whole of last year.
Tim Martin, the founder and chairman of JD Wetherspoon, said that the company was battling to make "lots of small improvements in diverse areas" and trying to ensure that the company's pubs were "busy throughout the week" with breakfast and coffee sales aimed at maximising opening hours.
Total sales, which take into account the growth from 37 net new pub openings, were up by 5.2 per cent to £955.1 million last year. A similar number of pubs are expected to be opened during the current year.
Business, which began the current year with total sale 5.8 per cent ahead, is on track to surpass £1 billion in turnover for the first time in its history, three decades after its foundation in 1979.
Costs in the new year are also down, with Wetherspoon's energy bill £5 million a year lower. Wages have only increased modestly, after the statutory minimum wage — the benchmark rate of pay for many pub employees — increased by 1.2 per cent.
As previously announced there is no final dividend, with the cash saved being used to pay down debt. An £87 million private placement due later this month will be paid from cash reserves and further drawings on a £310 million loan supplied by Santander. Net debt amounted to 2.7 times underlying earnings at the year end.
Source: '
Times '
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