In its preliminary results for the 53 weeks ending 31 July 2022, the company reported a drop in like-for-like sales of 4.7% and a revenue decrease of 4.3% to £1,740.5m compared to the pre-pandemic 52 weeks ending 28 July 2019.
Additionally, operating profit after exceptional items was also down by more than half (58.2%) to £55.1m (£131.9m in 2019).
JDW, which is in its 39th year since incorporation in 1983, also revealed like-for-like bar sales dropped by 6.5% and food sales fell 3.2% against three years ago.
Chairman Tim Martin said post-pandemic recovery sales have been “painstakingly slow” for some, twinned with cost inflation.
Momentous challenge
He added: “A possible reason for the much-slower-than anticipated recovery has been an underestimation of the power of habit determining human behaviour.
“During lockdown, dyed-in-the-wool pubgoers, many for the first time, filled their fridges with supermarket beer and it has proved to be a momentous challenge to persuade them to return to the more salubrious environment of the saloon bar.”
The update also showed during the financial period, the business sold, closed or terminated the leases of 15 sites, giving rise to a cash inflow of £5.9m.
At financial year end, the business had a trading estate of 852 pubs. JDW is currently marketing 32 pubs, most of which are in close proximity to other sites it owns.
Martin said the strategy of opening larger pubs at a consideration distance from each other reflects a long-term plan.
Total capital investment was £127.3m, against £62.7m in 2021. Of the investment put in this year, £58.8m was pumped into new pubs and extensions. This was more than double the amount invested in 2021 (£24.1m).
Improved prospects
In addition, £42.8m went into existing pubs and IT (compared to £20m last year) while £25.8m was invested in freehold reversions of properties where JDW was the tenant – up from £16.9m in 2021.
The report revealed the business continued to boost investment levels on the basis the adverse impact of Covid-19 would eventually diminish.
However, Martin said the first nine weeks of the current financial year to Sunday 2 October this year, like-for-like sales increased by 10.1% against the 9 weeks to Sunday 3 October 2021.
He added: “The company has improved its prospects in a number of recent financial years – we own an increasing percentage of freehold properties, the balance sheet has been strengthened, interest rates have been fixed at low levels until 2031, we have a large contingent of long-serving pub staff and underlying sales are improving.
“However, as a result of the previously reported increases in labour and repair costs and the potentially adverse effects of rises in interest rates and energy costs on the economy, firm predictions are hard to make.”
