Wetherspoons reinstates dividends to shareholders

Managed pub group JD Wetherspoon has reinstated its dividend after more than a year of holding back payments to investors.

Announcing its half year results, as well as a refinancing of the company's banking facility, the group's founder and chairman Tim Martin said the company would pay a total dividend of 12p and a special dividend of 7p to shareholders on April 1.

Noting the company had paid nearly £200m in taxes in the first half of its financial year, Martin used the results announcement to once again berate the government's attitude towards the on-trade, especially its approach to under-age drinking.

"On a practical level, excessive penalties for pubs which inadvertently sell alcoholic drinks to those under 18 are unfair, since most parents permit 16- and 17-year-olds to use pubs," he said.

The constant need to check for the age of younger drinkers was "exasperating" for those over 18, "while expensive and confrontational for publicans", he argued.

Martin believed the crackdown on pubs "may actually exacerbate the problems of binge drinking, since it has resulted in more drinking, especially by young people, in the unsupervised environments of parties, streets and parks".

He said that instead of its "confrontational and dictatorial approach the government would be better to adopt the approach of a significant number of local authorities, police forces, pub companies and individual licensees who have joined together to create 'Best Bar None' and 'Pubwatch' schemes".

"Co-operation and commonsense are more effective than headline-grabbing and ill-thought-out initiatives," he added.

Martin said the group's turnover for the half year to January 24, 2010, rose 4.1 per cent to £488.1m, with like-for-like revenues up 0.1 per cent.

Operating profits came in at £48.9m, up from £46.9m in 2009. Pre-exceptional pre-tax profits were up 17.5 per cent to £36.2m

Free cash flow per share was 15.3p, versus 28.2p in the first half of 2009. Earnings per share were up 9.4 per cent to 17.5p.

The group's operating margin, before exceptional items, interest and tax in the first half remained at 10 per cent, "with lower energy costs being offset by increased expenditure on repairs during the period".

In the six weeks to March 7, 2010, like-for-like sales were down 0.4 per cent, while total sales were up nearly four per cent.

Wetherspoons opened 17 new pubs in the first half, closing two and plans to open 50 pubs over the course of the financial year. It now operates 746 pubs in total.

Martin revealed the group had refinanced its banking facility with a new £530m deal expiring in March 2014, replacing the old £435m arrangement which was due to close off in December this year.

The company also plans to open all its pubs at 7am from April 28 to serve breakfasts, two hours earlier than the pubs' current opening times. It said it sells around 275,000 breakfasts a week.