Current trading
For the first 12 weeks of the second quarter (to 20 January 2019), like-for-like sales increased by 7.2% and total sales by 8.3%. In the year to date (25 weeks to 20 January 2019), like-for-like sales increased by 6.3% and total sales by 7.2%.
Property
Since the start of the financial year, the Company has opened 2 new pubs and sold 6. We intend to open between 5 and 10 pubs in the current financial year.
The Company has spent £56m in the year to date on buying the freeholds of pubs of which we were previously tenants.
Financial position
The Company remains in a sound financial position. Net debt at the end of this financial year is currently expected to be around £10m higher than the level at the last financial year end.
The Company has agreed a new 5 year revolving credit facility of £875 million (previous £820 million) on attractive financial terms. The new facility matures in January 2024.
Outlook
The chairman of J D Wetherspoon, Tim Martin, said:
“The most frequently asked question, regarding the future, relates to the impact of leaving the EU. I have argued that the UK – and therefore Wetherspoon – will benefit from a free-trade approach, by avoiding a 'deal' which involves the payment of £39billion to the EU, for which the House of Lords (appendix 1) has confirmed there is no legal liability.
“This approach also means that the UK, without the agreement of the EU, can end some or all of the protectionist tariffs and quotas that apply on non-EU imports, including rice, oranges, bananas, coffee, wine, children's clothes and over 12,000 other products – many of which are not produced in this country. Ending tariffs reduces prices for consumers, without loss of government income, since the proceeds are currently remitted to Brussels.
“A good example of the EU's protectionism, which is denied by many people, is the recent imposition of tariffs on Cambodian rice, which will inevitably increase prices for businesses and consumers (appendix 2).
“Sales growth has been strong since our last update. Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30m in the period, but also in other areas, including interest, utilities, repairs and depreciation.
“Profit before tax in the first half is expected to be lower than the same period last year. Our expectations for the full year are unchanged.”