JD Wetherspoon on Friday reported a narrowed interim loss, but the pub chain is yet to return to the business seen in pre-pandemic times.
Revenue for the half-year that ended January 23 came in at £807.4 million, nearly double the £431.1 million posted a year before. However, sales remain below the £933.0 million achieved two years ago, a pre-pandemic period.
Wetherspoon’s pretax loss narrowed to £21.3 million from £46.2 million a year ago, but the bottom line remains far off the profit of £57.9 million registered two years ago.
Performance remained hindered by the pandemic in the recent half, with sales hit by Covid restrictions and virus-related staff absences.
Like-for-like sales were down 12% on two years ago. But the Wetherspoon highlighted improving trends, with sales in the three weeks to March 13 down just 2.6% on pre-pandemic levels.
‘Following a traumatic two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks,’ the company said.
Noting the industry-wide inflationary backdrop, Wetherspoon said there is pressure on input costs from food, drink and energy suppliers, though this mitigated somewhat by a number of long-term contracts. Overall, the company expects the increase in input prices to be ‘slightly less than the level of inflation’.
Looking ahead, Chair Tim Martin said: ‘The company is confident of a strong future if restrictions are avoided. The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy.’
No interim dividend was recommended, in line with a year ago.
Wetherspoon shares were down 0.6% early Friday, while the wider FTSE 250 index was up 0.2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.3% at 7,385.89
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Hang Seng: down 0.1% at 21,480.88
Nikkei 225: closed up 0.7% at 26,827.43
S&P/ASX 200: closed up 0.6% at 7,294.40
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DJIA: closed up 417.66 points, 1.2%, at 34,480.76
S&P 500: closed up 1.2% at 4,411.67
Nasdaq Composite: closed up 1.3% at 13,614.78
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EUR: down at $1.1076 ($1.1113)
GBP: down at $1.3145 ($1.3155)
USD: up at JP¥118.88 (JP¥118.44)
Gold: down at $1,933.80 per ounce ($1,942.97)
Oil (Brent): up at $108.72 a barrel ($106.62)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday’s key economic events still to come
Ireland public holiday following St Patrick’s Day
UK Conservative Party spring conference opens as Rishi Sunak gives speech
1100 CET EU foreign trade
1000 EDT US leading indicators
1000 EDT US existing home sales
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The Bank of Japan kept interest rates unchanged but warned of uncertainty in the wake of Russia’s invasion of Ukraine. At March’s meeting, the BoJ decided by an 8-1 majority vote to keep a negative interest rate of 0.1%. The BoJ noted that global financial and capital markets have been volatile and prices of commodities such as crude oil have risen significantly in recent weeks following Russia’s war in Ukraine, and said future developments ‘warrant attention’. This surge in commodity prices is expected to see domestic annual inflation, excluding fresh food products, ‘increase clearly in positive territory’. Data on Friday showed Japan’s core consumer prices rose 0.6% in February from a year earlier.
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Rescue workers searched desperately for any survivors buried beneath the rubble of Mariupol’s bombed-out theatre Friday, as Russia’s forces pounded residential areas across Ukraine, stoking allegations of war crimes. Twenty-four hours after Mariupol’s once-gleaming whitewashed theatre was hollowed out by a Russian strike, the number of dead, injured or trapped is still unclear. In a call later Friday US President Joe Biden is set to warn his counterpart Xi Jinping that Beijing will face ‘costs’ for ‘any actions it takes to support Russia’s aggression’, according to US Secretary of State Antony Blinken. In the wake of the theatre attack, Blinken also said it was ‘difficult to conclude’ that Vladimir Putin’s regime had not engaged in war crimes by targeting civilians.
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BROKER RATING CHANGES
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HSBC reinitiates Anglo American with ’buy’
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Berenberg raises Softcat to ’buy’ (hold) - price target 1900 pence
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Jefferies raises Johnson Matthey to ’hold’ (underperform) - price target 2100 pence
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COMPANIES - FTSE 250
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Plastic and fibre products maker Essentra said that it delivered a strong annual performance and that its strategic reviews of the Filters and Packaging divisions are progressing in line with expectations. For 2021, Essentra swung to a pretax profit of £33.2 million from a loss of £4.1 million in 2020 on revenue of £960 million, up 7% from £897 million. Essentra declared a total dividend of 6.0 pence, almost doubled from 3.3p in 2020. Looking ahead, Essentra said it has made a strong start to 2022 with all three divisions well-positioned for growth with strong order books. Last year, Essentra had set out its strategic ambition to become a pure play Components business, with its Filters and Packaging divisions likely to be sold off.
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COMPANIES - MAIN MARKET AND AIM
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Sycamore Partners Management confirmed a press report that it was in early stages of considering making a possible cash offer for Ted Baker. Sky News reported on Friday that the US private equity firm was mulling a takeover approach for London-listed fashion retailer. Sycamore Partners said it was considering a possible cash offer for Ted Baker but noted there was no certainty any offer would be made. The private equity firm noted the put-up-or-shut-up date for it to give a firm intention to make an offer for Ted Baker will be on April 15.
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Friday’s shareholder meetings
Caracal Gold PLC - AGM
Chenavari Toro Income Fund Ltd - AGM
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