JDW FY23 sales ‘likely to be a record’
The pub operator’s trading update for the 13 weeks to 30 April 2023 comes despite “a lack of understanding” from the Government about the need “to encourage a successful free market economy”.
The lfl boost in Q3 is made in comparison to the same period in the last full financial year before the pandemic, which ended on 28 July 2019 and year-to-date (YTD) sales are reported to have increased by 6.4% v FY19.
Sales in Easter week were the highest-ever for the company that operates 834 pubs with sales in the current financial year “likely to be a record”.
Compared to FY22, like-for-like sales increased by 12.2% in the third quarter and by 12.7% YTD.
The past two weeks have included bank holiday weekends. The first weekend, a May bank holiday, was exceptionally strong, including the company’s busiest Saturday ever.
Staff numbers rise
The more recent King’s coronation weekend was slightly less strong, with a noticeably quiet Saturday, which the pubco said was likely to have benefited sales in the off-trade.
JDW reported it had 42,839 employees at the end of Q3 – an increase of 940 compared to the year-end FY19. It said to encourage staff retention, the company has, for many years, offered free shares, subject to a qualifying period, and monthly financial bonuses, to all employees.
It has 769 pubs rated on the Food Standards Agency’s website and the average score for sites is 4.98 with 98% of the pubs achieving a top rating of five stars.
During Q3, the company opened one pub (three pubs during FY23) and sold, closed or surrendered to the landlord 10 pubs (21 pubs YTD). It said most of the pubs were “smaller and older or where the company has a second pub in reasonably close proximity”. There was a net cash inflow of £4.7m from the 21 disposals.
Meanwhile, 30 trading pubs remain on the market or are under offer.
As of 30 April 2023, net debt was £738m, approximately £67m lower reported in its interim results for FY20, immediately before the pandemic. Since then, the company has invested £185m in new pubs, freehold reversions and has raised equity of approximately £240m. The company had financial headroom of £241m at the end of the quarter.
Longer-lasting consequences
JD Wetherspoon chairman Tim Martin said: “Lockdowns and associated restrictions have had more profound and longer-lasting consequences than most economists, politicians and commentators predicted.
“Sales in the last quarter have continued their positive momentum, although inflation, especially in labour, energy and food costs, remains a more intractable issue.
“In order to bear down on inflation, political parties should encourage free enterprise, rather than a reliance on additional regulations. A lack of understanding, among some senior politicians, about the need to encourage a successful free market economy, presents a real threat to the future prosperity of the country.
“The company expects profits in the current financial year to be towards the top-of-market expectations.”
JDW expects to make its next trading update on 12 July 2023, shortly before FY23 ends on 30 July 2023.
