J D WETHERSPOON PLC
Q3 Trading Update
J D Wetherspoon plc ('J D Wetherspoon' or 'the Company'), announces its Q3 trading update for the 13-week period up to 24 April 2022.
Current trading
For the 13 weeks to 24 April 2022 like-for-like sales decreased by 4.0%, in comparison with the same period in FY19. Year-to-date like-for-like sales have decreased by 6.2%.
In our interim statement, we indicated that like-for-like sales in the three weeks to 13 March 2022 had improved to -2.6%. In the following six weeks, to the end of the quarter, there was a further modest improvement to -1.6%. In the last two weeks of the period, like-for-like sales were slightly positive.
The company operates 47 pubs which have music, trading as 'Lloyds'. Like-for-like sales for these pubs, in the quarter, were +3.4%. The company also operates 57 hotels. Like-for-like room sales during the quarter were +5.0%.
Property
In the financial year to date, the company has disposed of six pubs. A further five pubs have been surrendered to landlords, following lease expiries. In addition, three leasehold pubs have been closed, in anticipation of lease expiries.
The disposals and surrenders gave rise to a cash inflow of £6.3m.
Financial position
Net debt at the end of the quarter was £906m and liquidity was £173m. Debt is expected to be around £870m at the end of the financial year.
Directorate Changes
As required by the Listing Rules of the FCA, Wetherspoon is today issuing a simultaneous statement announcing the retirement of long-serving Wetherspoon director Su Cacioppo and the appointment of James Ullman, a member of the Wetherspoon management board, as her replacement. The company is extremely grateful for Su's exceptional efforts in the last 31 years and wishes her every success in the future.
Outlook
The chairman of JD Wetherspoon, Tim Martin, said:
“Since Covid restrictions ended, sales have improved, as previously reported. As many hospitality companies have indicated, there is considerable pressure on costs, especially in respect of labour, food and energy. Repairs are also running at a higher rate than before the pandemic.
“The company anticipates a continuing slow improvement in sales, in the absence of further restrictions, and anticipates a “break-even” outcome for profits in the current financial year.
“Since 13 March, the company has returned to profitability and to a positive cash flow, and is cautiously optimistic about the prospect of a return to relative normality in FY23.
“The biggest threat to companies in the hospitality, tourism and related sectors is the possibility of future lockdowns and restrictions. These sorts of actions were never previously contemplated in the nation's history – or, indeed, in the government's own pre-pandemic plans.
“Many people, including those in the government and the medical establishment, believe that the UK response to Covid, which included a number of prolonged national lockdowns, was a success.
“This view is called into question by the outcome in Sweden, a more urbanised country than the UK, which did not lock down – and which appears to have had better health results.
“The collateral damage from lockdowns has yet to be quantified, but the economic cost, approximately half a trillion pounds, financed largely by “money printing” by the Bank of England, is a direct cause of the current inflationary crisis.”