The results, which covered the 26 weeks ending 28 January 2024, showed total sales for the first half of the 2024 financial year were £991m – an 8.2% rise compared with the same period in 2023.
Again, against the same 2023 period, like-for-like sales were up by 9.9% while like-for-like bar sales rose by 11.6%, food sales by 7.6%, slot/fruit machine sales by 10.5% and hotel rooms by 2.8%.
The company stated like-for-like sales were stronger than total sales due to a small number of disposals and lease terminations.
During the period, the company sold five pubs, terminated the lease of five and sublet three sites. This gave rise to a cash inflow of £3.8m.
There was a loss on disposal of £5.9m, recognised in the income statement, relating to these pubs.
Operating profit before separately disclosed items was £67.7m, compared to £37.4m in 2023 while operating margin before separately disclosed items was 6.8% (4.1% in 2023).
The profit before tax and separately disclosed items was £36m (compared to £4.6m in 2023) including property gains of £100,000 (£500,000 in 2023).
The statement revealed in the past decade, there has been a reduction in the number of trading JDW pubs, which peaked at 955 in December 2015.
Estate change
Some leasehold sites were surrendered to landlords at the end of the lease or by negotiation and others were sold to third parties. At the end of the period under review, JDW traded from 814 pubs.
However, it also stated despite a reduction in the overall number of pubs, sales continued to rise with total sales around a third higher than 2015 and sales per pub have increased by about half (50%) since 2015.
In the past 14 years, the company has invested £448m in acquiring the freehold ‘reversions’ of pubs where it was previously the tenant. Seven in 10 (71%) of the estate are now freehold – up from 41% in 2010.
The company’s best estimate is it has the potential for about 1,000 pubs in the UK – around 186 more than it has currently.
On the latest results, chairman Tim Martin said: “Sales continue to improve. In the past seven weeks to 17 March, like-for-like sales increased by 5.8%.
“The company continues to be concerned about the possibility of further lockdowns and about the efficacy of the Government enquiry into the pandemic, which will not be concluded for several years.
“In contrast, the World Health Organisation (WHO) reported on its findings in 2022. Professor Francois Balloux, director of the UCL Genetics Institute, writing in The Guardian and Professor Robert Dingwell, of Trent University, writing in The Telegraph, provide useful synopses of the WHO report (see pages 54 to 56 of Wetherspoons News on its website).
“The conclusion of Professor Balloux, broadly echoed by Professor Dingwell, based on analysis by the WHO of the pandemic, is Sweden (which did not lock down), had a Covid 19 fatality rate ‘of about half the UK’s’ and ‘the worst performer, by some margin, is Peru, despite enforcing the harshest, longest lockdown’.
“Professor Balloux concludes ‘the strength of mitigation measures does not seem to be a particularly strong indicator of excess deaths'.
“The company currently anticipates a reasonable outcome for the financial year, subject to future sales performance.”
New openings
The business has announced a number of openings recently. This has included its first pub at a holiday park – the Five Stones at Haven’s Primrose Valley holiday park in Filey, North Yorkshire.
This was the third franchise pub the company has opened and followed sites at Hull University in January 2022 and at Newcastle University in September 2023.
Earlier in the year (January), the business opened a new pub near Euston Station in London. The company invested £2.3m developing the outlet into the Captain Flinders.
Furthermore, JDW said as previously indicated, it is also increasing investment in new staff rooms, changing rooms, glass racks above bars (to cater for increased usage of brewers’ branded glasses) and air conditioning.
Moreover, the company highlighted the potential to expand existing successful pubs by adding gardens or by expanding the existing customer areas into adjacent buildings.
Examples it gave of substantial expansion of existing pubs included the Prince of Wales in Cardiff, the Sir John Moore in Glasgow, the Standing Order in Derby, the Five Swans in Newcastle, the Six Chimneys in Wakefield, Wetherspoons in London Victoria Station, the Red Lion in Skegness and the Windmill at Stansted Airport.
Total capital investment was £57.2m (up from £47.8m in 2023) with £10.5m was invested into new pubs and pub extensions (£10.7m in 2023), £34.6m in existing pubs and IT (up from £27.1m) and £12.1m in freehold reversions of properties where JDW was the tenant (compared to £10m in 2023).
