Total revenue for the 26 weeks ending 23 January 2022 was £807.4m, compared to £933m in the same period in 2020; a decrease of 13.5%. Furthermore, like-for-like sales dropped by 11.8%.
Before exceptional items, and pre-IFRS 16, a new standard for lease accounting which was introduced from January 2019, the loss before tax was £21.3m, versus the same period in 2020 where the profit was £57.9m.
Furthermore, operating profit was at £500,000, compared to £76.6m in 2020. Earnings per share were down 16 pence, compared to 44.3p in 2020.
JDW chairman Tim Martin said: “Following a traumatic two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks.
“As indicated, trade for the last three weeks was 2.6% below the equivalent period in 2019, reflecting an improving trend. Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions.”
Pressure on input costs
Before exceptional items and after IFRS 16, the loss before tax was at £26.1m, compared to a profit of £51.6m in 2020. Furthermore, the operating profit for this trading period reached £1.6m, versus £80.8m in 2020. Furthermore, earnings per share were down 19.7p compared to 39.3p in 2020.
Martin continued: “Inflationary pressures in the economy have been widely publicised. As indicated above, nearly 70% of the company’s properties are freehold, with interest rates fixed for the next decade. Most of the company’s leasehold pubs have rent reviews which are fixed at levels below the current level of inflation.”
According to the chairman, there was a pressure on input costs from food, drink and energy suppliers, mitigated to an extent, by a number of long-term contracts. Overall, he said, the company expects the increase in input prices to be slightly less than the level of inflation.
After exceptional items and pre-IFRS 16, the loss before tax was £8.2m, versus a £42m profit in 2020. The operating profit for this period was £0.8m, compared to £76.6m in 2020, and the earnings per share were minus 7.8p, whereas, in 2020, they were at 30.5p.
Hospitality's kryptonite
What’s more, after exceptional items, post-IFRS 16, the loss before tax was £13m, compared to the 2020 profit of £35.7m. Operating profit was £1.9m versus £80.8m in 2020, and earnings per share were down 9p from 25.5p in 2020.
“The Government is reported to have spent over £400bn on Covid measures, around nine times the annual defence budget. The expenditure has been financed by the creation of 'new money' by the Bank of England, which has led to significant inflation and higher taxes,” said Martin.
He added: “Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses. The company is confident of a strong future if restrictions are avoided.
“The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy.”
