JDW reports revenue rise amid ‘ferocious’ inflationary pressure

24-Mar-2023 - Last updated on 24-Mar-2023 at 10:24 GMT

Year ahead: JDW chairman Tim Martin is the company is “cautiously optimistic” for the current financial year

JD Wetherspoon (JDW) has reported a rise in like-for-like (lfl) sales and revenue versus pre-pandemic figures for the 26 weeks ended 29 January 2023 but a 90.9% drop in profit before tax.

Lfl sales for the manged pub group were up 5% compared to the six-month period ended 27 January 2019, which was the last full financial year before the pandemic. More recently, sales, again compared to FY19, rose by 9.1% for the most recent seven-week period to 19 March 2023, which are the first seven weeks of the second half of the business’s financial year (FY).

Total sales (revenue) were up 3% v FY19 at £916m while operating profit was down by 41.1% to £37.4m (FY19: £63.5m) and lfl bar sales decreased by 0.8%, food sales increased by 12%, slot/fruit machine sales increased by 44.3% and hotel rooms by 13%.

90.9% fall in profits before tax

Profit before tax and separately disclosed items was £4.6m v £50.3m for the same period in 2019, which represented a 90.9% fall.

JDW chairman Tim Martin said: “Trade for the last seven weeks was 9.1% above the equivalent period in FY19 and 14.9% above the equivalent period in our last financial year (FY22).

“As reported last year, the company has a full complement of staff, although the labour market is competitive, with unemployment, in spite of economic problems, at approximately its lowest level in the last 50 or so years.”

The company opened two pubs during the first six months of the 26-week period and sold or closed 11, resulting in a trading estate of 843 pubs at the half-year end. As of 24 July 2011, the company’s freehold:leasehold split was 43.4%:56.6% but as of 29 January 2023, as a result of investment in freehold reversions (relating to pubs where the company was previously a tenant) and freehold pub openings, the split was 69%:31%.

Supply issues largely disappeared

Martin, who has been an outspoken advocate for Brexit added: “Supply or delivery issues have largely disappeared, for now, and were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic, rather than a consequence of Brexit, as many commentators have argued.

“Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour. The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct.

“Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead.”