Source - LSE Regulatory
RNS Number : 9063G
Wetherspoon (JD) PLC
04 October 2024
 

4 October 2024

 

J D WETHERSPOON PLC

PRELIMINARY RESULTS

(For the 52 weeks ended 28 July 2024)

 

 

FINANCIAL HIGHLIGHTS

Var %

 

 



Before separately disclosed items



Ÿ  Like-for-like sales

+7.6%


Ÿ  Revenue £2,035.5m (2023: £1,925.0m)

+5.7%


Ÿ  Profit before tax £73.9m (2023: £42.6m)

+73.5%


Ÿ  Operating profit £139.5m (2023: £107.1m)

+30.2%


Ÿ  Diluted earnings per share 46.8p (2023: 26.4p)

+77.3%


Ÿ  Free cash inflow per share 26.4p (2023: 211.4p)

-87.5%


Ÿ  Full year dividend 12.0p (2023: 0.0p)

+100%





After separately disclosed items1



Ÿ  Profit before tax £60.6m (2023: £90.5m)

-33.0%


Ÿ  Operating profit £142.6m (2023: £106.0m)

+34.5%


Ÿ  Diluted earnings per share 39.0p (2023: 46.5p)

-16.1%


 



1Separately disclosed items as disclosed in note 4.

 



 

Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said:

 

"Sales continue to improve. In the last nine weeks, to 29 September 2024, like-for-like sales increased by 4.9%.

 

"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 Dingwall, of Trent University, writing in the Telegraph, provide useful synopses of the WHO report:

 

(see pages 54-56 of Wetherspoon News

https://www.jdwetherspoon.com/wp-content/uploads/2024/04/Wetherspoon-News-autumn-2022.pdf)

 

"The conclusion of Professor Balloux, broadly echoed by Professor Dingwall, based on an analysis by the World Health Organisation of the pandemic, is that Sweden (which did not lock down), had a Covid-19 fatality rate "of about half the UK's" and that "the worst performer, by some margin, is Peru, despite enforcing the harshest, longest lockdown.

 

"Professor Balloux concludes that "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 current financial year, subject to our future sales performance."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enquiries:

 

John Hutson                                         Chief Executive Officer     01923 477777

Ben Whitley                                          Finance Director                 01923 477777

Eddie Gershon                                    Company spokesman         07956 392234

 

Photographs are available at: www.newscast.co.uk   

 

Notes to editors

1.             J D Wetherspoon owns and operates pubs throughout the UK. The Company aims to provide customers with good-quality food and drink, served by well-trained and friendly staff, at reasonable prices. The pubs are individually designed and the Company aims to maintain them in excellent condition.

2.             Visit our website jdwetherspoon.com

3.             The financial information set out in the announcement does not constitute the company's statutory accounts for the periods ended 28 July 2024 or 30 July 2023. The financial information for the period ended 30 July 2023 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors have reported on those accounts: their report was unqualified, and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Statutory accounts for 2024 will be delivered to the registrar of companies in due course. This announcement has been prepared solely to provide additional information to the shareholders of J D Wetherspoon, in order to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied on by any other party, for other purposes. Forward-looking statements have been made by the directors in good faith using information available up until the date that they approved this statement. Forward-looking statements should be regarded with caution because of inherent uncertainties in economic trends and business risks.

4.             The annual report and financial statements 2024 has been published on the Company's website on 04 October 2024.

5.             The current financial year comprises 52 trading weeks to 27 July 2025.

6.             The next trading update will be issued on 6 November 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

Financial performance

 

The company was founded in 1979 - and this is the 41st year since incorporation in 1983.

The table below outlines some key aspects of our performance during that period.

 

Summary accounts for the years 1984-2024

 

 

Financial year

 

Total number

of pubs

(sites)

 

Total sales

£000

Profit/(loss)

before tax and separately disclosed items

£000

Earnings per

share before

separately disclosed items

pence3

 

 

Free cash flow

£000

 

Free cash flow

per share

 pence2,3

1984

1

818

(7)

-



1985

2

1,890

185

0.2



1986

2

2,197

219

0.2



1987

5

3,357

382

0.3



1988

6

3,709

248

0.3



1989

9

5,584

789

0.6

915

0.4

1990

19

7,047

603

0.4

732

0.4

1991

31

13,192

1,098

0.8

1,236

0.6

1992

45

21,380

2,020

1.9

3,563

2.1

1993

67

30,800

4,171

3.3

5,079

3.9

1994

87

46,600

6,477

3.6

5,837

3.6

1995

110

68,536

9,713

4.9

13,495

7.4

1996

146

100,480

15,200

7.8

20,968

11.2

1997

194

139,444

17,566

8.7

28,027

14.4

1998

252

188,515

20,165

9.9

28,448

14.5

1999

327

269,699

26,214

12.9

40,088

20.3

2000

428

369,628

36,052

11.8

49,296

24.2

2001

522

483,968

44,317

14.2

61,197

29.1

2002

608

601,295

53,568

16.6

71,370

33.5

2003

635

730,913

56,139

17.0

83,097

38.8

2004

643

787,126

54,074

17.7

73,477

36.7

20054

655

809,861

47,177

16.9

68,774

37.1

2006

657

847,516

58,388

24.1

69,712

42.1

2007

671

888,473

62,024

28.1

52,379

35.6

2008

694

907,500

58,228

27.6

71,411

50.6

2009

731

955,119

66,155

32.6

99,494

71.7

2010

775

996,327

71,015

36.0

71,344

52.9

2011

823

1,072,014

66,781

34.1

78,818

57.7

2012

860

1,197,129

72,363

39.8

91,542

70.4

2013

886

1,280,929

76,943

44.8

65,349

51.8

2014

927

1,409,333

79,362

47.0

92,850

74.1

2015

951

1,513,923

77,798

47.0

109,778

89.8

2016

926

1,595,197

80,610

48.3

90,485

76.7

2017

895

1,660,750

102,830

69.2

107,936

97.0

2018

883

1,693,818

107,249

79.2

93,357

88.4

2019

879

1,818,793

102,459

75.5

96,998

92.0

20206

872

1,262,048

(44,687)

(35.5)

(58,852)

(54.2)

20213

861

772,555

(154,676)

(119.2)

(83,284)

(67.8)

20223

852

1,740,477

(30,448)

(19.6)

21,922

17.3

20233

826

1,925,044

42,559

26.4

271,095

211.4

2024

800

2,035,500

73,875

46.8

33,037

26.4

 

 

 

 

 

 

 

 

Notes

Adjustments to statutory numbers

1. Where appropriate, the earnings/losses per share (EPS), as disclosed in the statutory accounts, have been recalculated to take account of share splits, the issue of new shares and capitalisation issues.

2. Free cash flow per share excludes dividends paid which were included in the free cash flow calculations in the annual report and accounts for the years 1995-2000.

3. EPS and free cash flow per share are calculated using dilutive shares in issue.

4. Before 2005, the accounts were prepared under UKGAAP. All accounts from 2005 to date have been prepared under IFRS.

5. Apart from the items in notes 1-4, all numbers are as reported in each year's published accounts.

6. From financial year 2020 data is based on post-IFRS 16 numbers following the transition from IAS17 to IFRS 16.

 

 

Continued Recovery

 

The recovery from the pandemic continued in FY24, the year under review.

 

In the first full post-lockdown financial year (FY22), like-for-like (LFL) sales declined by 4.7% compared to the pre-pandemic FY19. LFL sales, on the same basis, increased to 7.4% in FY23 and to 16.0% in FY24.

 

Total sales in FY24, which were £2,036 million, have increased by £217 million compared to FY19, although the number of pubs decreased from 879 at the FY19 year-end to 800 at FY24.

 

Profits, before tax and separately disclosed items, like sales, have also continued to make progress, improving from a loss of £30 million in FY22, to a profit before tax of £43 million in FY23 and to £74 million in FY24.

 

Increased Freehold Ownership

 

Since 2010, the company has invested £458 million in acquiring the freehold "reversions" of pubs where it was previously the tenant.

 

72% of pubs are now freehold, an increase from 41% in 2010.

 

 

Continued Expansion

 

As previously stated, our best estimate is that the company has potential for about 1,000 pubs in the UK. Examples of recent pub openings include The Captain Flinders near Euston Station, The Lion and the Unicorn in Waterloo Station, the Star Light, Heathrow Airport, and The Grand Assembly in Marlow, all in the London region.

 

In addition to new openings, there is potential to expand existing successful pubs, by adding gardens or, for example, by expanding existing customer areas into adjacent buildings.

 

Recent examples of the expansion of existing pubs include: The Prince of Wales, Cardiff; The Sir John Moore, Glasgow; The Six Chimneys, Wakefield; Wetherspoons, Victoria Station, London; The Red Lion, Skegness; The Talk of the Town, Paignton; The Albany Palace, Trowbridge and The Mile Castle, Newcastle.

 

As previously indicated, the company 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.

 

 

Trading summary

 

Total sales in FY24 were £2,036 million, an increase of 5.7%, compared to FY23.

 

LFL sales, compared to FY23, increased by 7.6%. LFL bar sales increased by 8.9%, food sales by 5.6%, slot/fruit machine sales by 10.8% and hotel-room sales by 2.7%.

 

LFL sales were stronger than total sales due to a small number of pub disposals and lease terminations.

 

Operating profit, before separately disclosed items, was £139.5 million (2023: £107.1 million). The operating margin, before separately disclosed items, was 6.9% (2023: 5.6%).

 

Profit, before tax and separately disclosed items, was £73.9 million (2023: £42.6 million).

 

In the period, the company sold eighteen pubs and terminated the lease of an additional nine pubs. This gave rise to a cash inflow of £8.9 million.

 

There was an exceptional loss on disposal of approximately £13.4 million, recognised in the income statement, relating to these pubs.

 

The company opened two pubs in the year; the Star Light at Heathrow Airport and The Captain Flinders, close to Euston Station in London.

 

 

 

Franchises

 

Wetherspoon opened its first franchised pub in Hull University's student union in January 2022. The second opened at Newcastle University in September 2023, and the third at Haven Primrose Valley Holiday Park, Filey, North Yorkshire in March 2024. Further franchise proposals are under consideration.

 

 

Earnings

 

Earnings per share, before separately disclosed items, were 48.6p (2023: 27.0p).

 

Total capital investment was £116.5 million (2023: £78.5 million). £11.9 million was invested in new pubs and pub extensions (2023: £20.4 million), £82.6 million in existing pubs and IT (2023: £47.0 million) and £21.9 million in freehold reversions of properties where Wetherspoon was the tenant (2023: £11.2 million).

 

 

Separately disclosed items

 

Overall, there was a pre-tax 'separately disclosed loss' of £13.3 million (2023: £48.0 million gain).

 

Operating profit, after separately disclosed items, was £142.6 million (2023: £106.0 million).

 

Profit before tax, after separately disclosed items, was £60.6 million (2023: £90.5 million).

 

Details of the separately disclosed items are given in note 4 of the accounts.

 

The tax effect on separately disclosed items is a credit of £3.5 million (2023: debit of £22.2 million).

 

Following £19.9 million of impairment charges and £7.6 million of impairment reversals in the year, the net book value of the company's assets in the balance sheet is £1.37 billion, which is approximately seven times the company's EBITDA (pre IFRS-16 and pre separately disclosed items), in the last 12 months, of £192.8 million.

 

 

Free cash flow

 

There was a free cash inflow of £33.0 million in the period, including £14.8 million from the sale of interest rate swaps (2023: £271.1 million inflow, including £169.4 million from the sale of interest rate swaps).

 

Free cash flow was lower than profits due to:

 

- the amount that the company owed to suppliers and other third parties, such as HMRC, reducing from £329 million at the end of FY23 to £298 million at the end of the period under review.

 

- higher-than-usual levels of reinvestment in existing pubs, which increased from £47 million in FY23 to £83 million in FY24. This reinvestment, relating to the projects mentioned above, was around £17 million more than the P&L depreciation charge for the period.

 

- £5 million of loan issue costs in the period relating to the refinancing of the company's loans.

 

 

Balance sheet

 

Debt, excluding IFRS-16 lease debt, was £660.0 million at the period end (30 July 2023: £641.9 million).

 

On an IFRS-16 basis, which includes notional debt from leases, debt increased from £1.06 billion to £1.07 billion at the end of FY24.

 

Debt levels, excluding IFRS-16 lease debt, have decreased from £804.5 million to £660.0 million since January 2020, just before the first lockdown. On an IFRS-16 basis, debt decreased from £1.45 billion to £1.07 billion during this period.

 

 

Dividends and return of capital

 

As a result of the improved trading and financial position of the company, the board is recommending the payment of a final dividend, equivalent to the 2019 annual dividend, of 12 pence (2023: nil) per share.

 

During the period, 5,127,959 shares (4.1% of the share capital) were purchased by the company for cancellation, at a cost of £39.5 million, including stamp duty and fees, representing an average cost per share of 770p.

 

 

 

 

 

Financing

 

The company has total available finance facilities of £938.0 million.

 

On 6 June 2024, the company signed a new four-year £840.0 million banking agreement on attractive terms.

 

On 22 August 2023, the company disposed of all interest rate swaps in place, receiving £14.8 million to do so.

 

At the same time, the company took out a new interest-rate swap of £200.0 million from 23 August 2023 to 6 February 2025 at a rate of 5.67%.

 

On 25 September 2023, the company took out a further interest-rate swap of £400.0 million from 6 February 2025 to 6 February 2028 at a rate of 4.23%.

 

The total cost of the company's debt, in the period under review, including the banks' margin was 7.05% (30 July 2023: 6.09%).

 

 

Taxation

 

The total tax charge for the period was £15.4 million in respect of profits before separately disclosed items (2023: £8.7 million).

 

The total tax charge comprises two parts. The first part is the actual current tax (the 'cash' tax) which this year is £2.9 million (2023: nil).

 

The second part is deferred tax (the 'accounting' tax), which is tax payable in future periods, that must be recognised in the current period for accounting purposes. The accounting tax charge for the period is £12.5 million (2023: £8.7 million).

 

 

You cannot be serious

 

Pubs are highly regulated businesses, controlled by licensing laws, which originate in parliament.

 

In recent weeks, according to press reports, two potential changes to licensing regulations have been aired by government ministers and academic researchers, both aimed at lowering alcohol consumption.

 

The first is that pub and hospitality licensing hours might be reduced. Since 1988, pubs have been able to open all day, having previously been required to close for around two or three hours each afternoon.

 

In addition, in 2005, the then government further liberalised licensing laws, which resulted in many pubs opening an hour or two more in the evening - in Wetherspoon's case, usually until midnight on weekdays and until 1am on Fridays and Saturdays.

 

Counterintuitively, since these liberalisations, the share of alcohol consumption of the "on-trade" - pubs, clubs, restaurants etc - has plummeted.

 

In the early 1980s, the on-trade accounted for about 90% of beer sales, for example.

 

This dropped to about 50% before the pandemic and is now about 40%, probably due to the increase in price disparity with supermarkets, which stems from the tax disadvantage referred to in the section entitled "VAT equality" below.

 

The effect of reducing pub opening times would certainly further reduce on-trade consumption, but that reduction is likely to be replaced by "off-trade" consumption at home and in other "unregulated" environments.

 

Among the advantages of the on-trade, linked to regulation, are that consumption is supervised by trained licensees, police and local authorities, in many cases including CCTV coverage of premises, and so on.

 

This does not mean that pubs are invariably oases of tranquillity but, in general, pub behaviour is good and pubs are valued by communities.

 

The second, slightly daft, proposal is reported as emanating from Cambridge University - that pubs should sell beer in quantities of two-thirds of a pint (sometimes called schooners), rather than the traditional pint.

 

Common sense indicates that reducing glass sizes is unlikely, due to human nature, to reduce alcohol consumption in pubs, and would also have no effect whatsoever on drinks bought in supermarkets, unless container sizes in supermarkets were also, unrealistically, reduced.

 

For example, our Aussie cousins, notorious guzzlers, already use schooners without any noticeable reduction in consumption.

 

Both these proposals seem likely, if implemented, to encourage off-trade consumption at the expense of the on-trade, thereby exchanging the relatively highly priced and supervised pub environment for the inexpensive and unsupervised alternative of home, park and party consumption.

 

The word 'pub' may have a misleading connotation for some ministers and researchers. For example, Wetherspoon's highest selling draught product by far, is Pepsi. Coffee and tea volumes, which are not in the draught category, are approximately double those of Pepsi. The reality is that products sold in pubs have radically changed in recent decades.

 

In summary, neither of these proposals would seem to pass the common-sense test, as John McEnroe would no doubt aver.

 

 

Scottish Business Rates

 

In appendix 1 below, we explain how business rates for Scottish pubs, theoretically based on property values, have, by a strange process of legal reasoning, become a de facto sales tax, based on the sales performance of the occupier.

 

 

VAT equality

 

Wetherspoon, along with many in the hospitality industry, has been a strong advocate of tax equality between the off-trade, which consists mainly of supermarkets, and the on-trade, consisting mainly of pubs, clubs and restaurants.

 

Pubs, clubs and restaurants pay 20% VAT in respect of food sales but supermarkets pay nothing. Supermarkets also pay far less business rates per pint or meal than pubs.

 

It does not make economic sense for the tax system to favour mainly out-of-town supermarkets over mainly high-street pubs.

 

This imbalance is a major factor in town centre and high street dereliction.

 

Our more detailed arguments on this point, from our FY23 annual report, can be found in appendix 2 below.

 

 

How pubs contribute to the economy

 

Wetherspoon and other pub and restaurant companies have always generated far more in taxes than are earned in profit.

 

In the financial year ended 28 July 2024, the company generated taxes of £780.2 million.

 

The table below shows the £6.2 billion of tax revenue generated by the company, its staff and customers in the last ten years.

 

Each pub, on average, generated £7.1 million in tax during that period. The tax generated by the company, during this period, equates to approximately 26 times the company's profits after tax.

 

Republic of Ireland pubs contributed €14.0 million of Irish tax contributions during the year, of which €7.9 million related to VAT, €3.5 million alcohol duty and €2.3 million employment taxes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

TOTAL

2015 to 2024

£m

£m

£m

£m

£m

£m

£m

£m

£m

£m

£m

VAT

394.7

372.3

287.7

93.8

244.3

357.9

332.8

323.4

311.7

294.4

3,013.0

Alcohol duty

163.7

166.1

158.6

70.6

124.2

174.4

175.9

167.2

164.4

161.4

1,526.5

PAYE and NIC

134.7

124.0

141.9

101.5

106.6

121.4

109.2

96.2

95.1

84.8

1,115.4

Business rates

41.3

49.9

50.3

1.5

39.5

57.3

55.6

53.0

50.2

48.7

447.3

Corporation tax

9.9

12.2

1.5

-

21.5

19.9

26.1

20.7

19.9

15.3

147.0

Corporation tax credit (historic capital allowances)

-

-

-

-

-

-

-

-

-

-2.0

-2.0

Fruit/slot machine duty

16.7

15.7

12.8

4.3

9.0

11.6

10.5

10.5

11

11.2

113.3

Climate change levies

10.2

11.1

9.7

7.9

10

9.6

9.2

9.7

8.7

6.4

92.5

Stamp duty

1.1

0.9

2.7

1.8

4.9

3.7

1.2

5.1

2.6

1.8

25.8

Sugar tax

2.6

3.1

2.7

1.3

2.0

2.9

0.8

-

-

-

15.4

Fuel duty

2.0

1.9

1.9

1.1

1.7

2.2

2.1

2.1

2.1

2.9

20.0

Apprenticeship levy

2.5

2.5

2.2

1.9

1.2

1.3

1.7

0.6

-

-

13.9

Carbon tax

-

-

-

-

-

1.9

3.0

3.4

3.6

3.7

15.6

Premise licence and TV licences

0.5

0.5

0.5

0.5

1.1

0.8

0.7

0.8

0.8

1.6

7.8

Landfill tax

-

-

-

-

-

-

1.7

2.5

2.2

2.2

8.6

Insurance premium tax

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.1

0.1

-

1.7

Furlough tax

-

-

-4.4

-213

-124.1

-

-

-

-

-

-341.5

Eat Out to Help Out

-

-

-

-23.2

-

-

-

-

-

-

-23.2

Local government grants

-

-

-1.4

-11.1

-

-

-

-

-

-

-12.5

TOTAL TAX

780.2

760.4

666.9

39.1

442.1

765.1

730.7

695.3

672.4

632.4

6,184.6

TAX PER PUB (£m)

0.98

0.92

0.78

0.05

0.51

0.87

0.83

0.78

0.71

0.67

7.10

TAX AS % OF NET SALES

38.3%

39.5%

38.3%

5.1%

35.0%

42.1%

43.1%

41.9%

42.1%

41.8%

36.7.%

PROFIT/(LOSS) AFTER TAX

58.5

33.8

-24.9

-146.5

-38.5

79.6

83.6

76.9

56.9

57.5

236.9

Note - this table is prepared on a cash basis, is UK only and post IFRS-16 from FY20 onward.


Corporate Governance

 

Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.

 

Directors of UK PLCs have, on average, relatively little experience of the companies they govern, due to the "nine-year rule", which limits their tenure, combined with the fact that most directors are part-time, and have never worked for the company in question, on a full-time basis.

 

In addition, those responsible for overseeing governance, among institutional shareholders, are often responsible for several hundred companies each, making genuine board engagement impossible, and thereby necessitating a "tick-box" approach, which is the antithesis of good governance.

 

The combination of arbitrary rules, the preponderance of part-time directors and overloaded institutional governance departments means that bureaucracy and virtue-signalling, rather than innovation and efficacy, dominate most UK PLC boardrooms.

 

In appendix 3 below, further details are provided on this issue from our FY23 annual report.

 

 

Further progress

 

In the period Wetherspoon awarded £49.0 million of bonuses and free shares to employees, of which 96.5% was paid to staff below board level and 86.3% was paid to staff working in our pubs. Approximately 24,500 of our 42,300 employees are shareholders in the company.

 

The average length of service of a pub manager increased to 14.9 years, and of a kitchen manager is 10.9 years. There are 26 employees who have worked for the company for more than 30 years, 662 for more than 20 years, 4,056 for more than 10 years and 11,444 for more than five years.

 

Wetherspoon has been recognised by the Top Employers Institute as a Top Employer United Kingdom 2024. It is the 19th time that Wetherspoon has been certified by the Top Employers' Institute.

 

251 pubs feature in the 2025 Good Beer Guide, an increase of 15 compared to last year.

 

In November 2023, Wetherspoon was voted the Best Airport Retailer for Food & Beverages at the British Travel Awards.

 

In August 2024, our national distribution centre in Daventry, operated by DHL, had its 20th anniversary. 27 of the original colleagues from 2004 are still working there. In addition, we opened a secondary warehouse in Rugby which, as well as acting as a business continuity solution, will allow for further company volume growth.

 

The company has an extensive training programme for its employees, including 'kitchen of excellence' training, as well as cellar, dispense and coffee academy training.

 

Wetherspoon has recently been included in the Financial Times 'FT - Statista Leaders 2024' report, which highlights Europe's leading companies in diversity and inclusion.

 

The company's UK nominated charity is Young Lives vs. Cancer (previously CLIC Sargent). It supports children and young people with cancer. Since our partnership began in 2002, Wetherspoon has raised over £23.5 million for the charity, thanks to the generosity and efforts of our customers and employees.

 

677 of the company's washrooms have been awarded the highest platinum or diamond statuses by the National Loo of the Year awards. The awards are aimed at highlighting and improving standards of away-from home washrooms across the UK. The washrooms are judged against numerous criteria, including décor and maintenance, cleanliness, accessibility, hand-washing and drying equipment and overall management.

 

In January 2024, the company was awarded the highest rating by the Sustainable Restaurant

Association - the world's largest accreditation scheme for pubs and restaurants, see link to SRA article.

 

Wetherspoon came first in the 'Out to Lunch' league table, compiled by the Soil Association, when last awarded, in 2019 and 2021. Restaurants and pubs are judged and scored on a range of criteria: family friendliness, healthy options, food quality, value, sustainability and ingredients' provenance.

 

Wetherspoon is seeking to extend the appeal of its menu. For example, 39% of the dishes on the menu that is available in the majority of pubs are vegetarian, 11% are vegan and 24% are under 500 calories.

 

Cod and haddock are sourced from fisheries which have been certified to the MSC's (Marine Stewardship Council) standards for well-managed and sustainable fisheries.

 

Guinness have a 'Quality Accreditation Programme'. Independent assessors review 17 aspects of quality. 100% of pubs passed their Guinness accreditation.

 

Since 2008, Wetherspoon has invited brewers from overseas to feature their ales in its real-ale festivals. To date, these brewers have contributed 234 ales, from 147 breweries in 29 countries. In addition, the company works with over 250 UK brewers, mostly small or "micro" brewers.

 

Since 1999, Wetherspoon has worked with independent real-ale quality assessor Cask Marque to gauge the quality of ale being served in its pubs. Cask Marque carries out an 11-point audit covering stock rotation, beer line cleanliness, equipment maintenance, glass washing cleanliness and hygiene. A star rating is awarded from 1 to 5, with a target of 4 to 5 stars for all pubs. Cask Marque state that 66% of UK pubs achieve 4 or 5 stars. 98% of Wetherspoon pubs have achieved 4 or 5 stars.

 

 

Sustainability, recycling and the environment

 

Wherever possible, Wetherspoon separates waste into eight streams: glass; tins/cans; cooking oil; paper/cardboard; plastic; lightbulbs; food waste and general waste.

 

In partnership with Veolia, our waste service provider, 99.8% of general waste was diverted from landfill in FY24.

 

9,324 tonnes of recyclable waste were processed last year at our national recycling centre. In addition, food waste is sent for 'anaerobic digestion' and used cooking oil is converted to biodiesel for agricultural use.

 

Smart meters are installed in the majority of pubs (and are being installed into the rest of pubs) to facilitate energy consumption reporting.

 

According to ISTA, a leading company providing energy services, Wetherspoon has reduced greenhouse gas emissions by 66% over the last 10 years, after adjusting for sales growth. During that time, the company has also contributed £108.1m in climate change levies and carbon taxes.

 

 

Length of service

 

The table below provides details of the improved retention levels of pub and kitchen managers, key areas for any pub company, in the last decade.

 

Financial year

Average pub manager length of service

Average kitchen manager length of service

 

(Years)

(Years)

2014

10.0

6.1

2015

10.1

6.1

2016

11.0

7.1

2017

11.1

8.0

2018

12.0

8.1

2019

12.2

8.1

2020

12.9

9.1

2021

13.6

9.6

2022

13.9

10.4

2023

14.3

10.6

2024

14.9

10.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bonuses and free shares

 

As indicated above, Wetherspoon has, for many years (see table below), operated a bonus and share scheme for all employees. Before the pandemic, these awards increased, as earnings increased for shareholders.

 

Financial year

Bonus and free shares

Profit/(loss) after tax1

Bonus and free shares as % of profits

 

£m

£m

 

2007

19

47

41%

2008

16

36

45%

2009

21

45

45%

2010

23

51

44%

2011

23

52

43%

2012

24

57

42%

2013

29

65

44%

2014

29

59

50%

2015

31

57

53%

2016

33

57

58%

2017

44

77

57%

2018

43

84

51%

2019

46

80

58%

2020

33

(39)

-

2021

23

(146)

-

2022

30

(25)

-

2023

36

34

106%

2024

49

59

83%

Total2

466

860

54.2%

1(IFRS-16 was implemented in the year ending 26 July 2020 (FY20). From this period all profit numbers in the above table are on a Post-IFRS-16 basis. Prior to this date all profit numbers are on a Pre-IFRS-16 basis.

2 Excludes 2020, 2021 and 2022.

 

 

Food hygiene ratings

 

Wetherspoon has always emphasised the importance of hygiene standards.

 

We now have 735 pubs rated on the Food Standards Agency's website (see table below). The average score is 4.99, with 99.6% of the pubs achieving a top rating of five stars. We believe this to be the highest average rating for any substantial pub company.

 

In the separate Scottish scheme, which records either a 'pass' or a 'fail', all of our 56 pubs have passed.

 

Financial Year

Total pubs scored

Average rating

Pubs with highest rating %

2014

824

4.91

92.0

2015

858

4.93

94.1

2016

836

4.89

91.7

2017

818

4.89

91.8

2018

807

4.97

97.3

2019

799

4.97

97.4

2020

781

4.96

97.0

2021

787

4.97

98.4

2022

775

4.98

98.6

2023

753

4.99

99.2

2024

735

4.99

99.6

 

 

 

 

 

 

 

 

Property litigation

 

Some years ago, Wetherspoon took successful legal action for fraud against its own property advisors Van de Berg, who were found, by the court, to have diverted freehold properties to third parties, leaving Wetherspoon with an inferior leasehold interest.

 

Following the Van de Berg case, Wetherspoon instigated further legal actions against a number of individuals and companies who had freehold properties introduced to them by Van de Berg. Liability was denied by all. The cases were contested and settled out of court. Details can be found in appendix 4 below.

 

 

Press corrections

 

In the febrile atmosphere of the first UK lockdown, a number of harmful inaccuracies were published in the press. A large number of corrections and apologies were received, as a result of legal representations by Wetherspoon.

 

In order to try to set the record straight, a special edition of Wetherspoon News was published, which includes details of the apologies and corrections. It can be found on the company's website:

 

(https://www.jdwetherspoon.com/wp-content/uploads/2024/08/Does-Truth-Matter_.pdf).

 

 

Pubwatch

 

As Wetherspoon has previously highlighted, Pubwatch is a forum which has improved wider town and city environments, by bringing together pubs, local authorities and the police, in a concerted way, to encourage good behaviour and to reduce antisocial activity.

 

Wetherspoon pubs are members of 532 schemes country wide, with 4 new schemes and 10 less schemes due to disposals.

 

The company also helps to fund National Pubwatch, founded in 1997 by licensees Bill Stone and Raoul De Vaux, along with police superintendent Malcolm Eidmans. This is the umbrella organisation which helps to set up, co-ordinate and support local schemes.

 

It is our experience that in some towns and cities, where the authorities have struggled to control antisocial behaviour, the setting up of a Pubwatch has been instrumental in improving safety and security - of not only licensed premises, but also the town and city in general, as well as assisting the police in bringing down crime.

 

Conversely, we have found, in several towns, including some towns on the outskirts of London, that the absence of an effective Pubwatch scheme results in higher incidents of crime, disorder and antisocial behaviour.

 

In our view, Pubwatch is integral to making towns and cities a safe environment for everyone.

 

 

Current trading and outlook

 

As indicated above, sales continue to improve. In the last nine weeks, to 29 September 2024, like-for-like sales increased by 4.9%.

 

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 Dingwall, of Trent University, writing in the Telegraph, provide useful synopses of the WHO report:

 

(see pages 54-56 of Wetherspoon News

https://www.jdwetherspoon.com/wp-content/uploads/2024/04/Wetherspoon-News-autumn-2022.pdf)

 

The conclusion of Professor Balloux, broadly echoed by Professor Dingwall, based on an analysis by the World Health Organisation of the pandemic, is that Sweden (which did not lock down), had a Covid-19 fatality rate "of about half the UK's" and that "the worst performer, by some margin, is Peru, despite enforcing the harshest, longest lockdown."

 

Professor Balloux concludes that "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 current financial year, subject to our future sales performance.

 

 

 

 

 

APPENDIX 1 Extract from Wetherspoon FY23 Annual report, Chairman's Statement


Business rates transmogrified to a sales tax

 

Business rates are supposed to be based on the value of the building, rather than the level of trade of the tenant. This should mean that the rateable value per square foot is approximately the same for comparable pubs in similar locations. However, as a result of the valuation approach adopted by the government "Assessor" in Scotland, Wetherspoon often pays far higher rates per square foot than its competitors.

 

This is highlighted (in the tables below) by assessments for the Omni Centre, a modern leisure complex in central Edinburgh, where Wetherspoon has been assessed at more than double the rate per square foot of the average of its competitors, and for The Centre in Livingston (West Lothian), a modern shopping centre, where a similar anomaly applies.

 

As a result of applying valuation practice from another era, which assumed that pubs charged approximately the same prices, the raison d'être of the rating system - that rates are based on property values, not the tenant's trade - has been undermined.

 

Similar issues are evident in Galashiels, Arbroath, Anniesland - and, indeed, at most Wetherspoon pubs in Scotland. In effect, the application of the rating system in Scotland discriminates against businesses like Wetherspoon, which have lower prices, and encourages businesses to charge higher prices. As a result, consumers are likely to pay higher prices, which cannot be the intent of rating legislation.

 

Omni Centre, Edinburgh

 

The Centre, Livingston

Occupier Name

Rateable Value (RV)

Customer Area (ft²)

Rates per square foot

 

Occupier Name

Rateable Value (RV)

Customer Area (ft²)

Rates per square foot

Playfair (JDW)

£218,750

2,756

£79.37

 

The Newyearfield (JDW)

£165,750

4,090

£40.53

Unit 9 (vacant)

£48,900

1,053

£46.44


Paraffin Lamp

£52,200

2,077

£25.13

Unit 7 (vacant)

£81,800

2,283

£35.83


Wagamama

£67,600

2,096

£32.25

Frankie & Benny's

£119,500

2,731

£43.76


Nando's

£80,700

2,196

£36.75

Nando's

£122,750

2,804

£43.78


Chiquito

£68,500

2,221

£30.84

Slug & Lettuce

£108,750

3,197

£34.02


Ask Italian

£69,600

2,254

£30.88

The Filling Station

£147,750

3,375

£43.78


Pizza Express

£68,100

2,325

£29.29

Tony Macaroni

£125,000

3,427

£36.48


Prezzo

£70,600

2,413

£29.26

Unit 6 (vacant)

£141,750

3,956

£35.83


Harvester

£98,600

3,171

£31.09

Cosmo

£200,000

7,395

£27.05


Pizza Hut

£111,000

3,796

£29.24

Average (exc JDW)

£121,800

3,358

£38.55

 

Hot Flame

£136,500

4,661

£29.29

 

 

 

 

 

Average (exc JDW)

£82,340

2,721

£30.40

 

In summary, as a result of the approach taken in Scotland, business rates for pubs are de facto a sales tax, rather than a property tax, as the above examples clearly demonstrate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX 2 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

 

VAT equality

 

As we have previously stated, the government would generate more revenue and jobs if it were to create tax equality among supermarkets, pubs and restaurants.

Supermarkets pay virtually no VAT in respect of food sales, whereas pubs pay 20%. This has enabled supermarkets to subsidise the price of alcoholic drinks, widening the price gap, to the detriment of pubs and restaurants. Pubs also pay around 20 pence a pint in business rates, whereas supermarkets pay only about 2 pence, creating further inequality.

 

Pubs have lost 50% of their beer sales to supermarkets in the last 35 or so years. It makes no sense for supermarkets to be treated more leniently than pubs, since pubs generate far more jobs per pint or meal than do supermarkets, as well as far higher levels of tax. Pubs also make an important contribution to the social life of many communities and have better visibility and control of those who consume alcoholic drinks.

.

Tax equality is particularly important for residents of less affluent areas, since the tax differential is more important there - people can less afford to pay the difference in prices between the on and off trade.

 

As a result, in these less affluent areas, there are often fewer pubs, coffee shops and restaurants, with less employment and increased high-street dereliction. Tax equality would also be in line with the principle of fairness - the same taxes should apply to businesses which sell the same products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX 3 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

 

Corporate Governance

 

Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.

 

As a result of the 'nine-year rule', limiting the tenure of NEDs and the presumption in favour of 'independent', part-time chairmen, boards are often composed of short-term directors, with very little representation from those who understand the company best - people who work for it full time, or have worked for it full time.

 

Wetherspoon's review of the boards of major banks and pub companies, which teetered on the edge of failure in the 2008-10 recession, highlighted the short "tenure", on average, of directors.

 

In contrast, Wetherspoon noted the relative success, during this fraught financial period, of pub companies Fuller's and Young's, the boards of which were dominated by experienced executives, or former executives.

 

As a result, Wetherspoon increased the level of experience on the Wetherspoon board by appointing four "worker directors".

 

All four worker directors started on the 'shop floor' and eventually became successful pub managers. Three have been promoted to regional management roles. They have worked for the company for an average of 24 years.

 

Board composition cannot guarantee future success, but it makes sensible decisions, based on experience at the coalface of the business, more likely.

 

The UK Corporate Governance Code 2018 (the 'Code') is a vast improvement on previous codes, emphasising the importance of employees, customers and other stakeholders in commercial success. It also emphasises the importance of its comply-or-explain ethos, and the consequent need for shareholders to engage with companies in order to understand their explanations.

 

A major impediment to the effective implementation of comply or explain seems to be the undermanning of the corporate governance departments of major shareholders.

 

For example, Wetherspoon has met a compliance officer from one major institution who is responsible for around 400 companies - an impossible task.

 

As a result, it appears that compliance officers and governance advisors, in practice, often rely on a "tick-box" approach, which is, itself, in breach of the Code.

 

A further issue is that many major investors, in their own companies, for sensible reasons, do not observe the nine-year rule, and other rules, themselves. An approach of "do what I say, not what I do" is clearly unsustainable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX 4 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

 

 

Property Litigation

 

In 2013, Wetherspoon agreed an out-of-court settlement of approximately £1.25 million with developer Anthony Lyons, formerly of property leisure agent Davis Coffer Lyons, relating to claims that Mr Lyons had been an accessory to frauds committed by Wetherspoon's former retained agent Van de Berg and its directors Christian Braun, George Aldridge and Richard Harvey in respect of properties in Leytonstone (which currently trades as the Walnut Tree), Newbury (which was leased to Café Rouge) and Portsmouth (which currently trades as The Isambard Kingdom Brunel).

 

Of these three properties, only Portsmouth was pleaded by Wetherspoon in its 2008/9 case against Van de Berg. Mr Lyons denied the claim and the litigation was contested.

 

In the Van de Berg litigation, Mr Justice Peter Smith ruled that Van de Berg, but not Mr Lyons (who was not a party to the case), fraudulently diverted the freehold of Portsmouth from Wetherspoon to Moorstown Properties Limited, a company owned by Simon Conway, which leased the property to Wetherspoon.

 

As part of a series of cases, Wetherspoon also agreed out-of-court settlements with:

 

1) Paul Ferrari of London estate agent Ferrari Dewe & Co, in respect of properties referred to as the 'Ferrari Five' by Mr Justice Peter Smith in the Van de Berg case, and

 

2) Property investor Jason Harris, formerly of First London and now of First Urban Group who paid £400,000 to Wetherspoon to settle a claim in which it was alleged that Harris was an accessory to frauds committed by Van de Berg. Harris contested the claim and did not admit liability.

 

Messrs Ferrari and Harris both contested the claims and did not admit liability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME STATEMENT for the 52 weeks ended 28 July 2024

 

 

 

 

1 Separately disclosed items is a measure not required by accounting standards. Post separately disclosed items is a GAAP measure.

 



52 weeks

 

52 weeks

 

52 weeks

 

52 weeks

52 weeks

52 weeks


Notes

ended

 

ended

 

ended

 

ended

ended

ended



28 July

 

28 July

 

28 July

 

30 July

30 July

30 July



2024

 

2024

 

2024

 

2023

2023

2023



before

 

separately

 

after

 

before

separately

after



separately

 

disclosed

 

separately

 

separately

disclosed

separately



disclosed

 

Items1

 

disclosed

 

disclosed

items1

disclosed



items1

 

 

 

items1

 

items1


items1



£000

 

£000

 

£000


£000

£000

£000

Revenue

1

2,035,500

 

-

 

2,035,500

 

1,925,044

-

1,925,044

Other operating income/(costs)

4

-

 

4,153

 

4,153

 

-

(1,022)

(1,022)

Operating costs


(1,896,009)

 

(1,059)

 

(1,897,068)

 

(1,817,982)

-

(1,817,982)

Operating profit


139,491

 

3,094

 

142,585


107,062

(1,022)

106,040

Property gains/(losses)

3

11

 

(32,480)

 

(32,469)

 

2,231

(47,712)

(45,481)

Finance income

6

2,032

 

16,131

 

18,163

 

1,351

97,724

99,075

Finance costs

6

(67,659)

 

-

 

(67,659)

 

(68,085)

(1,038)

(69,123)

Profit/(loss) before tax


73,875

 

(13,255)

 

60,620


42,559

47,952

90,511

Income tax (charge)/credit

7

(15,361)

 

3,526

 

(11,835)

 

(8,734)

(22,190)

(30,924)

Profit/(loss) for the period


58,514

 

(9,729)

 

48,785


33,825

25,762

59,587



 

 

 

 

 

 




Profit/(loss) per ordinary share (p)

 

 

 

 

 

 

 




 - Basic

8

48.6

 

(8.1)

 

40.5

 

27.0

20.5

47.5

 - Diluted

8

46.8

 

(7.8)

 

39.0


26.4

20.1

46.5

 

STATEMENT OF COMPREHENSIVE INCOME for the 52 weeks ended 28 July 2024


Notes


52 weeks

52 weeks




ended

ended




28 July

30 July




2024

2023




£000

£000

Items which will be reclassified subsequently to profit or loss:





Interest-rate swaps: gain taken to other comprehensive income



38

37,529

Interest-rate swaps: loss reclassification to the income statement



(18,025)

(13,310)

Tax on items taken directly to other comprehensive income

7


-

(6,055)

Currency translation differences



(1,294)

1,633

Net (loss)/gain recognised directly in other comprehensive income

(19,281)

19,797

Profit for the period



48,785

59,587

Total comprehensive profit for the period



29,504

79,384


CASH FLOW STATEMENT for the 52 weeks ended 28 July 2024

 

 



 

 

Free cash

 

Free cash



 

 

flow1

 

flow1



52 weeks

 

52 weeks

52 weeks

52 weeks


Note

ended

 

ended

ended

ended



28 July

 

28 July

30 July

30 July



2024

 

2024

2023

2023



£000

 

£000

£000

£000

Cash flows from operating activities

 






Cash generated from operations

9

232,907

 

232,907

270,686

270,686

Interest received

6

1,765

 

1,765

1,011

1,011

Interest paid

6

(52,482)

 

(52,482)

(50,545)

(50,545)

Cash proceeds on termination of interest-rate swaps


14,783

 

14,783

169,413

169,413

Corporation tax paid


(9,940)

 

(9,940)

(12,200)

(12,200)

Lease interest


(14,471)

 

(14,471)

(15,954)

(15,954)

Net cash flow from operating activities

 

172,562

 

172,562

362,411

362,411



 

 

 

 


Cash flows from investing activities

 

 

 

 

 


Reinvestment in pubs


(76,389)

 

(76,389)

(41,646)

(41,646)

Reinvestment in business and IT projects


(6,243)

 

(6,243)

(5,315)

(5,315)

Investment in new pubs and pub extensions


(11,933)

 

-

(20,361)

-

Freehold reversions and investment properties


(21,944)

 

-

(11,202)

-

Proceeds of sale of property, plant and equipment


17,872

 

-

11,349

-

Net cash flow from investing activities

 

(98,637)

 

(82,632)

(67,175)

(46,961)



 

 

 

 


Cash flows from financing activities

 

 

 

 

 


Purchase of own shares for cancellation


(39,505)

 

-

-

-

Purchase of own shares for share-based payments


(12,738)

 

(12,738)

(12,332)

(12,332)

Loan issue cost


(4,948)

 

(4,948)

-

-

Repayments under bank loans


(4,000)

 

-

(200,033)

-

Other loan receivables


778

 

-

889

-

Lease principal payments


(39,207)

 

(39,207)

(32,023)

(32,023)

Asset-financing principal payments


(4,245)

 

-

(4,911)

-

Net cash flow from financing activities

 

(103,865)

 

(56,893)

(248,410)

(44,355)



 

 

 

 


Net change in cash and cash equivalents

(29,940)

 

 

46,826


Opening cash and cash equivalents


87,173

 

 

40,347


Closing cash and cash equivalents


57,233

 

 

87,173


Free cash flow1


 

 

33,037


271,095

1 Free cash flow is a measure not required by accounting standards.

 

 

 

 

 

 

 

BALANCE SHEET as at 28 July 2024

J D Wetherspoon plc, company number: 1709784

Notes

 

Restated1



28 July

30 July



2024

2023



£000

£000

Assets

 



Non-current assets

 



Property, plant and equipment

13

1,374,617

1,377,816

Intangible assets

12

5,933

6,505

Investment property

14

18,290

18,740

Right-of-use assets1


373,338

395,353

Other loan receivable


1,194

1,986

Derivative financial instruments


-

11,944

Lease assets


8,860

8,450

Total non-current assets

 

1,782,232

1,820,794

Current assets

 

 


Lease assets

 

1,358

1,361

Assets held for sale

 

2,488

400

Inventories


28,404

34,558

Receivables


26,576

27,267

Current income tax receivables


6,079

8,351

Cash and cash equivalents


57,233

87,173

Total current assets


122,138

159,110

Total assets

 

1,904,370

1,979,904

Current liabilities

 

 


Borrowings

 

-

(4,200)

Derivative financial instruments

 

(701)

(78)

Trade and other payables


(298,059)

(329,098)

Provisions


(3,047)

(2,395)

Lease liabilities


(49,582)

(51,486)

Total current liabilities

 

(351,389)

(387,257)

Non-current liabilities

 

 


Borrowings

 

(719,134)

(727,643)

Derivative financial instruments

 

(4,073)

-

Deferred tax liabilities1

(59,487)

(60,152)

Lease liabilities


(368,660)

(391,794)

Total non-current liabilities

 

(1,151,354)

(1,179,589)

Total liabilities

 

(1,502,743)

(1,566,846)

Net assets

 

401,627

413,058

Shareholders' equity

 

 


Share capital

 

2,472

2,575

Share premium account

 

143,170

143,170

Capital redemption reserve

 

2,440

2,337

Other reserves

 

195,074

234,579

Hedging reserve


13,794

31,781

Currency translation reserve


106

2,148

Retained earnings1


44,571

(3,532)

Total shareholders' equity

 

401,627

413,058

 

 1Restated 30 July 2023.

 

 

 

 

 

 

 

 

 

STATEMENT OF CHANGES IN EQUITY

 


Notes

Share

Share premium

Capital

Other


Currency

Restated1

 

 


capital

account

redemption

Reserves

Hedging

translation

Retained

Total

 




reserve


reserve

reserve

earnings

 



£000

£000

£000

£000

£000

£000

£000

£000

As at 31 July 2022 as previously reported

 

2,575

143,294

2,337

234,579

13,617

(144)

(74,373)

321,885

Effect of restatements1


-

-

-

-

-

-

13,600

13,600

Restated1 as at 31 July 2022

 

2,575

143,294

2,337

234,579

13,617

(144)

(60,773)

335,485

Total comprehensive income


-

-

-

-

18,164

2,292

58,928

79,384

Profit for the period1


-

-

-

-

-

-

59,587

59,587

Interest-rate swaps: cash flow
hedges


-

-

-

-

37,529

-

-

37,529

Interest-rate swaps: amount
reclassified to the income statement


-

-

-

-

(13,310)

-

-

(13,310)

Tax on items taken directly to comprehensive income

7

-

-

-

-

(6,055)

-

-

(6,055)

Currency translation differences

-

-

-

-

-

2,292

(659)

1,633











Share capital expenses


-

(124)

-

-

-

-

-

(124)

Share-based payment charges


-

-

-

-

-

-

10,545

10,545

Tax on share-based payment

7

-

-

-

-

-

-

100

100

Purchase of own shares for share-based payments

-

-

-

-

-

-

(12,332)

(12,332)

As at 30 July 2023 as previously reported

 

2,575

143,170

2,337

234,579

31,781

2,148

(17,132)

399,458

Effect of restatements1








13,600

13,600

Restated1 as at 30 July 2023

 

2,575

143,170

2,337

234,579

31,781

2,148

(3,532)

413,058

Total comprehensive income


-

-

-

-

(17,987)

(2,042)

49,533

29,504

Profit for the period


-

-

-

-


-

48,785

48,785

Interest-rate swaps: cash flow hedges


-

-

-

-

38

-

-

38

Interest-rate swaps: amount reclassified to the income statement


-

-

-

-

(18,025)

-

-

(18,025)

Currency translation differences


-

-

-

-

-

(2,042)

748

(1,294)











Purchase of own shares and cancellation

(103)

-

103

(39,505)

-

-

-

(39,505)

Share-based payment charges

-

-

-

-

-

-

11,021

11,021

Tax on share-based payment

7

-

-

-

-

-

-

287

287

Purchase of own shares for share-based payments

-

-

-

-

-

-

(12,738)

(12,738)

As at 28 July 2024

 

2,472

143,170

2,440

195,074

13,794

106

44,571

401,627

 

1Restated 30 July 2023.

 

The share premium account represents those proceeds received in excess of the nominal value of new shares issued.

 

The capital redemption reserve represents the nominal amount of share capital repurchased and cancelled in previous periods.

 

Other reserves contain net proceeds received for share placements which took place in previous periods. During the year, £39.5 million was deducted from other reserves relating to share buybacks. Other reserves is used as this is determined to be distributable for the purposes of the Companies Act 2006.

 

The currency translation reserve contains the accumulated currency gains and losses on the long-term financing and balance sheet translation of the overseas branch. The currency translation difference reported in retained earnings is the retranslation of the opening reserves in the overseas branch at the current period end's currency exchange rate.

 

As at 28 July 2024, the company had distributable reserves of £253.5 million (Restated 2023: £265.0 million).

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

1.   Revenue


52 weeks

52 weeks


ended

ended


28 July

30 July


2024

2023


£000

£000

Bar

1,167,450

1,093,368

Food

773,002

742,067

Slot/fruit machines

66,886

62,579

Hotel

25,337

24,939

Other

2,825

2,091


2,035,500

1,925,044

 

2.   Operating profit/(loss) - analysis of costs by nature

 

This is stated after charging/(crediting):

52 weeks

52 weeks


Ended

ended


28 July

30 July


2024

2023


£000

£000

Variable concession rental payments

16,905

16,980

Short-term leases

593

504

Repairs and maintenance

114,544

94,011

Net rent receivable

(2,711)

(2,506)

Share-based payments (note 5)

11,021

10,545

Depreciation of property, plant and equipment (note 13)

63,496

70,173

Amortisation of intangible assets (note 12)

1,937

1,827

Depreciation of investment properties (note 14)

176

185

Amortisation of right-of-use assets

36,773

37,556

 

Analysis of continuing operations

52 weeks

52 weeks


Ended

ended


28 July

30 July


2024

2023


£000

£000

Revenue

2,035,500

1,925,044

Cost of sales1

(1,837,608)

(1,765,970)

Gross profit

197,892

159,074

Administration costs

(55,307)

(53,034)

Operating profit after separately disclosed items

142,585

106,040

1Included in cost of sales is £664.7 million (2023: £654.3 million) relating to the cost of inventory recognised as an expense.

 

 

Auditor's remuneration

52 weeks

52 weeks


Ended

ended


28 July

30 July


2024

2023


£000

£000

Fees payable for the audit of the financial statements

 


- Audit fees

610

560

- Additional audit work (for previous year audit)

122

50


 


Fees payable for other services

 


- Audit related services (interim audit procedures)

72

82

Total auditor's fee

804

692

 

 

3.   Property losses and gains


52 weeks

 

52 weeks

 

52 weeks

52 weeks

52 weeks

52 weeks


ended

 

ended

 

ended

ended

ended

ended


28 July 2024

 

28 July 2024

 

28 July 2024

30 July 2023

30 July 2023

30 July 2023


Before

 

Separately

 

After

Before

Separately

After


separately

 

disclosed

 

separately

separately

disclosed

separately


disclosed

 

items

 

disclosed

disclosed

items

disclosed


items

 

(note 4)

 

items

items

(note 4)

items


£000

 

£000

 

£000

£000

£000

£000

Disposals

 

 

 

 

 

 



Fixed assets

77

 

10,496

 

10,573

-

8,136

8,136

Leases

-

 

(1,519)

 

(1,519)

-

(1,404)

(1,404)

Additional costs of disposal

-

 

4,405

 

4,405

42

2,693

2,735


77

 

13,382

 

13,459

42

9,425

9,467

Impairments

 

 

 

 

 




Property, plant and equipment (note 13)

-

 

25,268

 

25,268

-

35,966

35,966

Reversal of property plant and equipment

  -

 

(7,582)

 

(7,582)

 -

(5,430)

(5,430)

Investment properties (note 14)

-

 

347

 

347

-

4,448

4,448

Reversal of investment properties

-

 

(73)

 

(73)

 -

 -

 -

Intangible assets

-

 

-

 

-

-

(74)

(74)

Right-of-use assets

-

 

2,161

 

2,161

-

3,377

3,377

Reversal of  right-of-use assets

-

 

(1,023)

 

(1,023)

 -


-

 

19,098

 

19,098

-

38,287

38,287

Other

 

 

 

 

 




Other property gains

(88)

 

-

 

(88)

(1,409)

-

(1,409)

Leases

-

 

-

 

-

(864)

 -

(864)


(88)

 

-

 

(88)

(2,273)

-

(2,273)


 

 

 

 

 




Total property (gains)/losses

(11)

 

32,480

 

32,469

(2,231)

47,712

45,481

 

 


 

4.   Separately disclosed items



52 weeks

52 weeks



ended

ended



28 July

30 July



2024

2023

 

 

£000

£000

Operating items

 



Local government support grants


(14)

(54)

Depreciation overcharge on impaired assets


(4,139)

-

Operating income

 

(4,153)

(54)



 

 

Other


1,059

1,076

Operating costs

 

1,059

1,076

Total operating (profit)/loss


(3,094)

1,022



 

 

Property losses

 

 

 

Loss on disposal of pubs


13,382

9,425



13,382

9,425

Other property losses

 

 

 

Impairment of assets under construction


5,334

-

Impairment of intangible assets


-

(74)

Impairment of property, plant and equipment


19,934

35,966

Reversal of property, plant and equipment impairment


(7,582)

(5,430)

Impairment of investment properties


347

4,448

Reversal of investment properties impairment


(73)

-

Impairment of right-of-use assets


2,161

3,377

Reversal of right-of-use asset Impairments


(1,023)

-



19,098

38,287



 

 

Total property losses


32,480

47,712



 

 

Other items

 

 

 

Finance costs


-

1,038

Finance income


(16,131)

(97,724)



(16,131)

(96,686)



 

 

Taxation

 

 

 

Tax effect on separately disclosed items


(3,526)

22,190



(3,526)

22,190



 

 

Total separately disclosed items


9,729

(25,762)

 

Other operating income

Included in other operating income is a reversal of overcharged depreciation in relation to previously impaired fixed assets

and right-of-use assets, totalling £4,139,000. The overcharge of depreciation occurred between the periods ended 26 July 2020

and 30 July 2023, and was not material in any one period to any line item. As such, the overcharge has been reversed in

the current year.

 

Local government support grants

The company has recognised £14,000 (2023: £54,000) of local government support grants in the UK and the Republic of Ireland, associated with the COVID-19 pandemic.

 

Other operating costs

Other operating costs relate to a contractual dispute with a large supplier which has now been resolved. Costs of £1,846,000 (2023: 1,076,000) have been recognised in relation to this dispute. Further costs of £684,000 (2023: nil) are in relation to an historic employment tax issue. Income of £1,471,000 has been recognised in the period relating to a settlement agreement (2023: nil).

 

Property losses

In the table on the previous page, those costs classified under the 'separately disclosed property losses' relate to the loss on disposal of sites sold during the year.

 

Other property losses

Property impairment relates to pubs which are deemed unlikely to generate sufficient cash flows in the future to support their carrying value. In the year, a total impairment charge of £19,934,000 (2023: £35,966,000) was incurred in respect of property, plant and equipment and £2,161,000 (2023: £3,377,000) in respect of right-of-use assets, as required under IAS 36. There were impairment reversals of £8,678,000 recognised in the year (2023: £5,430,000).

 

In the year, a total impairment charge of £347,000 (2023: £4,448,441) was incurred in respect of the impairment of our investment properties.

 

There was £5,334,000 impairment charge relating to assets under construction (2023: nil).

 

Separately disclosed finance costs

In the previous year, the company recognised covenant waiver fees of £1,038,000.

 

Separately disclosed finance income

The separately disclosed finance income of £16,131,000 (2023: £97,724,000) relates to interest-rate swaps. A charge of £1,894,000 (2023: income of £71,124,000) relates to the fair value movement on interest-rate swaps. Income of £18,025,000 (2023: £13,310,000) relates to the amortisation of the hedge reserve to the P&L relating to discontinued hedges. As a result of no hedge accounting being applied, there has been no hedge ineffectiveness recognised in the P&L (2023: £13,290,000).

 

Taxation

The tax effect on separately disclosed items is a credit of £3,526,000 (2023: £22,190,000 charge).

 

 

5.   Employee benefits expenses


52 weeks

52 weeks


ended

ended


28 July

30 July


2024

2023

 

£000

£000

Wages and salaries

717,558

668,397

Employee support grants

(289)

(768)

Social security costs

45,857

41,262

Other pension costs

11,983

10,675

Share-based payments

11,021

10,545


786,130

730,111


 



 

Restated1

Directors' emoluments

2024

2023

 

£000

£000

Aggregate emoluments

1,874

2,864

Aggregate amount receivable under share schemes

353

339

Company contributions to money purchase pension scheme

171

173


2,398

3,376

1Restated 30 July 2023.

 

Employee support grants disclosed above are amounts claimed by the company under the coronavirus job retention schemes in the UK and the Republic of Ireland.

 

 

 

 


2024

2023


Number

Number

Full-time equivalents

 

 

Head office

388

362

Pub managerial

4,542

4,549

Pub hourly paid staff

19,467

19,539


24,397

24,450


 

 


2024

2023


Number

Number

Total employees

 

 

Head office

397

379

Pub managerial

4,743

4,678

Pub hourly paid staff

36,937

37,151

 

42,077

42,208

 

The totals above relate to the monthly average number of employees during the year, not the total of employees at the end of the year.

 

 

 

Restated1

Share-based payments

52 weeks

52 weeks


ended

ended


28 July

30 July

 

2024

2023

Shares awarded during the year (shares)

3,937,892

3,813,792

Average price of shares awarded (pence)

701

526

Market value of shares vested during the year (£000)

7,377

1,464

Share awards not yet vested (£000)

21,617

16,632

1Restated 30 July 2023.

 

The shares awarded as part of the above schemes are based on the cash value of the bonuses at the date of the awards. These awards vest over three years, with their cost spread over their three-year life. The share-based payment charge above represents the annual cost of bonuses awarded over the past three years. All awards are settled in equity.

 

The company operates two share-based compensation plans. In both schemes, the fair values of the shares granted are determined by reference to the share price at the date of the award. The shares vest at a nil exercise price - and there are no market-based conditions to the shares which affect their ability to vest.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.   Finance income and costs


52 weeks

52 weeks


ended

ended


28 July

30 July


2024

2023

 

£000

£000

Finance costs

 

 

Interest payable on bank loans and overdrafts

48,262

43,469

Amortisation of bank loan issue costs (note 10)

439

1,246

Interest payable on swaps

866

1,894

Interest payable on asset-financing

70

205

Interest payable on private placement

3,284

4,977

Finance costs excluding lease interest

52,921

51,791


 

 

Interest payable on leases

14,738

16,294

Total finance costs

67,659

68,085


 

 

Bank interest receivable

(1,765)

(1,011)

Lease interest receivable

(267)

(340)

Total finance income

(2,032)

(1,351)


 

 

Net finance costs before separately disclosed items

65,627

66,734


 

 

Separately disclosed finance costs (note 4)

-

1,038

Separately disclosed finance income (note 4)

(16,131)

(97,724)


(16,131)

(96,686)


 

 

Net finance costs/(income) after separately disclosed items

49,496

(29,952)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.   Income tax expense

 

(a)  Tax on profit/(loss) on ordinary activities

 

The standard rate of corporation tax in the UK is 25%. The company's profits for the accounting period are taxed at a rate of 25% (2023: 21%).

 


52 weeks

 

52 weeks

 

52 weeks

52 weeks

52 weeks

52 weeks

 


ended

 

ended

 

ended

ended

ended

ended

 


28 July 2024

 

28 July 2024

 

28 July 2024

30 July 2023

30 July 2023

30 July 2023

 


Before

 

separately

 

After

Before

separately

After

 


separately

 

disclosed

 

separately

separately

disclosed

separately

 


disclosed

 

items

 

disclosed

disclosed

items

disclosed

 


items

 

(note 4)

 

items

items

(note 4)

Items

 


£000

 

£000

 

£000

£000

£000

£000

 

Taken through income statement

 

 

 

 

 

 



 

Current income tax:

 

 

 

 

 

 



 

Current income tax charge

2,901

 

12,406

 

15,307

-

5,552

5,552



Previous period adjustment

-

 

(3,043)

(3,043)

-

293

293

 


Total current income tax

2,901

 

9,363

 

12,264

-

5,845

5,845




 

 

 

 

 






Deferred tax:

 

 

 

 

 






Origination and reversal of temporary differences

12,460

 

(13,164)

 

(704)

13,602

16,345

29,947



Previous period deferred tax credit

-

275

275

(4,868)

-

(4,868)



Total deferred tax

12,460

 

(12,889)

 

(429)

8,734

16,345

25,079




 

 

 




 


Tax charge

15,361

 

(3,526)

 

11,835

8,734

22,190

30,924

 





 

 





 


52 weeks

 

52 weeks

 

52 weeks

52 weeks

52 weeks

52 weeks

 


ended

 

ended

 

ended

ended

ended

Ended

 


28 July 2024

 

28 July 2024

 

28 July 2024

30 July 2023

30 July 2023

30 July 2023

 


Before

 

separately

 

After

Before

separately

After

 


separately

 

disclosed

 

separately

separately

disclosed

separately

 


disclosed

 

items

 

disclosed

disclosed

items

disclosed

 


items

 

(note 4)

 

items

items

(note 4)

items

 


£000

 

£000

 

£000

£000

£000

£000

 

Taken through equity

 

 

 

 

 

 



 

Current tax

(52)

 

-

 

(52)

-

-

-

 

Deferred tax

(235)

 

-

 

(235)

(100)

-

(100)

 

Tax credit

(287)

 

-

 

(287)

(100)

-

(100)

 




 

 





 


52 weeks

 

52 weeks

 

52 weeks

52 weeks

52 weeks

52 weeks

 


Ended

 

ended

 

ended

ended

ended

ended

 


28 July 2024

 

28 July 2024

 

28 July 2024

30 July 2023

30 July 2023

30 July 2023

 


Before

 

Separately

 

After

Before

separately

After

 


Separately

 

disclosed

 

separately

separately

disclosed

separately

 


Disclosed

 

items

 

disclosed

disclosed

items

disclosed

 


Items

 

(note 4)

 

items

items

(note 4)

items

 


£000

 

£000

 

£000

£000

£000

£000

 

Taken through comprehensive income




 

 

 



 

Deferred tax charge on swaps

-

-

-

-

6,055

6,055

 

Tax charge

-

 

-

 

-

-

6,055

6,055

 

 

 

 

7.   Income tax expense (continued)

 

 

(b)  Reconciliation of the total tax charge

 

The taxation charge pre-separately disclosed items, for the 52 weeks ended 28 July 2024, is based on the profit before tax of £73.9m and the estimated effective tax rate for the 52 weeks ended 28 July 2024 of 20.8% (July 2023: 20.5%). This comprises of a current tax rate of 3.9% (July 2023: 0%) and a deferred tax charge of 16.9% (July 2023: 20.5% charge).

 

The UK standard weighted average tax rate for the period is 25% (2023: 21%). The current tax rate is lower than the UK standard weighted average tax rate owing to tax losses in the period.


52 weeks

 

52 weeks

52 weeks

52 weeks


ended

 

ended

ended

ended


28 July 2024

 

28 July 2024

30 July 2023

30 July 2023


Before

 

After

Before

After


separately

 

separately

separately

separately


disclosed

 

disclosed

disclosed

disclosed


items

 

items

items

items


£000

 

£000

£000

£000

Profit before income tax

73,875

 

60,620

42,559

90,511


 

 

 



Profit multiplied by the UK standard rate of

18,469

 

15,155

8,937

19,008

corporation tax of 25% (2023: 21%)

 

 

 



Abortive acquisition costs and disposals

490

 

490

427

427

Expenditure not allowable

643

 

1,120

711

711

Fair value movement on SWAP disregarded for tax

-

 

(4,504) 

(2,599)

484

Other allowable deductions

(18)

 

(18)

(13)

(13)

Non-qualifying depreciation and loss on disposal

(3,143)

 

(1,986)         

5,875

8,489

Capital gains - effect of deferred tax not recognised/(effect of relief)

-

 

2,271

1,175

1,175

Share options and SIPs

(1,382)

 

(1,382)

188

188

Deferred tax on balance-sheet-only items

(56)

 

(56)

(182)

(182)

Effect of different tax rates and unrecognised losses in overseas companies

358

 

3,513

2,871

2,871

Rate change adjustment

-

 

-

(3,788)

2,341

Previous year adjustment - current tax

-     

 

(3,043)

-

293

Previous year adjustment - deferred tax

-

 

275

(4,868)

(4,868)

Total tax expense reported in the income statement

15,361

 

11,835

8,734

30,924

 

 



 

7.   Income tax expense (continued)

 

(c)  Deferred tax

 

The main rate of corporation tax increased to 25% on 1 April 2023. Deferred tax balances have been recognised at the rate they are expected to reverse. The deferred tax in the balance sheet is as follows:

Deferred tax liabilities

Accelerated tax depreciation

Other temporary differences

Interest-rate swap

Total

 


£000

£000

£000

£000

 






 

As at 30 July 2023

50,048

6,838

27,032

83,918

 

Previous year movement posted to the income statement

(52)

(824)

4,149

3,273

 

Movement during year posted to the income statement

1,779

42

(20,619)

(18,798)

 

At 28 July 2024

51,775

6,056

10,562

68,393

 

Deferred tax assets

Share-based payments

Tax losses and interest capacity carried forward

 

 

 

 

Other temporary differences

Total



£000

£000

£000






As previously reported as at 30 July 2023

1,044

17,122

-

18,166

Effect of restatements1

-

-

5,600

5,600

Restated1 as at 30 July 2023

1,044

17,122

5,600

23,766

Previous year movement posted to the income statement

-     

2,999

-

2,999

Movement during year posted to the income statement

914

(19,061)

53

(18,094)

Movement during year posted to equity

235

-     

-

235

At 28 July 2024

2,193

1,060

5,653

8,906

 

The company has recognised deferred tax assets of £8.9 million (2023 restated: £23.8 million), which are expected to be offset against future profits. This includes a deferred tax asset of £1.1 million (2023: £17.1 million), in respect of UK tax losses. Included in other temporary differences is £5.7 million (2023 restated: £5.6 million) relating to capital losses capable of offset against rolled over gains.

 

Deferred tax assets and liabilities have been offset as follows:





2024

Restated1

2023





£000

£000

Deferred tax liabilities




68,393

83,918

Offset against deferred tax assets1




(8,906)

(23,766)

Deferred tax liabilities1




59,487

60,152





 


Deferred tax assets1




8,906

23,766

Offset against deferred tax liabilities1




(8,906)

(23,766)

Deferred tax asset1




-     

-     

1Restated 30 July 2023.

 

As at 28 July 2024, the company had a potential deferred tax asset of £5.4 million (2023: £4.1 million) relating to capital losses (gross tax losses £21.6 million (2023: £16.4 million)) and tax losses in the Republic of Ireland (gross tax losses £32.6 million (2023: £24.2 million)). Both types of loss do not expire and will be available to use in future periods indefinitely. A deferred tax asset has not been recognised, as there is insufficient certainty of recovery.

 

For periods commencing on or after 1 January 2024, additional reporting requirements will apply to ensure that the effective tax rate will be at least 15% in all countries, subject to various complex calculations. This is in line with the minimum taxation rules announced by the G7 and progressed by the OECD Inclusive Framework on Base Erosion and Profit Sharing. These rules have been implemented in the UK via the Multinational Top Up Tax legislation during the year and will first apply to the accounting period ending 27 July 2025.

 

Historically the company's effective tax rate has been above 15%. However, the company does operate in Ireland where the corporation tax rate is below 15%. The group has assessed the exposure to Multinational Top Up Taxes and any impact will be immaterial.

 

The company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.

 

 

 

 

8.   Earnings and free cash flow per share

 

Weighted average number of shares

 

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) after tax for the period by the weighted average number of ordinary shares in issue during the financial year of 125,291,770 (2023: 128,750,155) less the weighted average number of shares held in trust during the financial year of 4,956,072 (2023: 3,296,278). Shares held in trust are shares purchased by the company to satisfy employee share schemes which have not yet vested.

 

Diluted earnings/(loss) per share is calculated by dividing the profit/(loss) after tax for the period by the weighted average number of ordinary shares in issue during the financial year adjusted for both shares held in trust and the effects of potentially dilutive shares. In the event of making a loss during the year, the diluted loss per share is capped at the basic earnings per share as the impact of dilution cannot result in a reduction in the loss per share.

 

 

Weighted average number of shares

52 weeks

52 weeks


ended

ended


28 July

30 July


2024

2023

Shares in issue

125,291,770

128,750,155

Shares held in trust

(4,956,072)

(3,296,278)

Shares in issue - basic

120,335,698

125,453,877

Dilutive shares

4,693,614

2,810,231

Shares in issue - diluted

125,029,312

128,264,108

 

 

Earnings/(loss) per share

 

52 weeks ended 28 July 2024

Profit/(loss)

Basic EPS

Diluted EPS


£000

pence

pence

Earnings (profit after tax)

48,785

40.5

39.0

Exclude effect of separately disclosed items after tax

9,729

8.1

7.8

Earnings before separately disclosed items

58,514

48.6

46.8

Exclude effect of property gains/(losses)

(11)

-

-

Underlying earnings before separately disclosed items

58,503

48.6

46.8

 

 

52 weeks ended 30 July 2023

Profit/(loss)

Basic EPS

Diluted EPS


£000

pence

Pence

Earnings (profit after tax)

59,587

47.5

46.5

Exclude effect of separately disclosed items after tax

(25,762)

(20.5)

(20.1)

Earnings before separately disclosed items

33,825

27.0

26.4

Exclude effect of property gains/(losses)

(2,231)

(1.8)

(1.7)

Underlying earnings before separately disclosed items

31,594

25.2

24.7

 

 

Free cash flow per share

 

 

Free cash flow

Basic free cash flow per share

Diluted free cash flow per share


£000

pence

pence

52 weeks ended 28 July 2024

33,037

27.5

26.4

52 weeks ended 30 July 2023

271,095

216.1

211.4



 

9.   Cash used in/generated from operations

 

 


52 weeks

52 weeks


ended

ended


28 July

30 July


2024

2023

 

£000

£000

Profit for the period

48,785

59,587

Adjusted for:

 

-

Tax (note 7)

11,835

30,924

Share-based charges (note 5)

11,021

10,545

Loss on disposal of property, plant and equipment (note 3)

14,978

10,871

Disposal of capitalised leases and lease premiums (note 3)

(1,519)

(2,273)

Net impairment charge (note 3)

19,098

38,287

Interest receivable (note 6)

(1,765)

(1,011)

Interest payable (note 6)

52,482

50,234

Lease interest receivable (note 6)

(267)

(340)

Lease interest payable (note 6)

14,738

22,796

Separately disclosed Interest (note 6)

(16,131)

(96,686)

Amortisation of bank loan issue costs (note 6)

439

1,246

Depreciation of property, plant and equipment (note 13)

63,496

70,173

Amortisation of intangible assets (note 12)

1,937

1,827

Depreciation on investment properties (note 14)

176

185

Aborted properties costs

336

1,719

Foreign exchange movements

(1,294)

1,633

Amortisation of right-of-use assets

36,773

37,556


255,118

237,273

Change in inventories

6,154

(8,157)

Change in receivables

707

2,133

Change in payables

(29,072)

39,437

Cash generated from operations

232,907

270,686

 



 

 

10.  Analysis of change in net debt

 



30 July

Cash

Other

28 July

Analysis of changes in net debt for 52 weeks ended 28 July 2024


2023

flows

changes

2024

 








£000

£000

£000

£000

Borrowings

 




 

Cash and cash equivalents


87,173

(29,940)

-

57,233

Other loan receivable - due before one year


803

(87)

-

716

Asset-financing obligations - due before one year


(4,200)

4,245

(45)

-

Current net borrowings


83,776

(25,782)

(45)

57,949

 





 

Bank loans - due after one year


(629,783)

8,948

(394)

(621,229)

Asset-financing obligations - due after one year


-

-

-

-

Other loan receivable - due after one year


1,986

(691)

(101)

1,194

Private placement - due after one year


(97,860)

-

(45)

(97,905)

Non-current net borrowings


(725,657)

8,257

(540)

(717,940)

 





 

Net debt


(641,881)

(17,525)

(585)

(659,991)

 





 

Derivatives

 




 

Interest-rate swaps asset - due after one year


11,944

(14,783)

2,839

-

Interest rate swaps liability - due before one year


(78)

-

(623)

(701)

Interest-rate swaps liability - due after one year


-

-

(4,073)

(4,073)

Total derivatives


11,866

(14,783)

(1,857)

(4,774)

 





 

Net debt after derivatives


(630,015)

(32,308)

(2,442)

(664,765)

 





 

Leases

 




 

Lease assets - due before one year


1,361

(976)

973

1,358

Lease assets - due after one year


8,449

-

411

8,860

Lease obligations - due before one year


(51,486)

40,183

(38,279)

(49,582)

Lease obligations - due after one year


(391,794)

-

23,134

(368,660)

Net lease liabilities


(433,468)

39,207

(13,761)

(408,024)

 






Net debt after derivatives and lease liabilities


(1,063,483)

6,899

(16,203)

(1,072,790)

 

Lease obligations represent long-term payables, while lease assets represent long-term receivables - both are, therefore, disclosed in the table above.

 

The non-cash movement in bank loans and the private placement relate to the amortisation of loan issue costs. The amortisation charge for the year of £439,000 (2023: £1,246,000) is disclosed in note 6. These are arrangement fees paid in respect of new borrowings and charged to the income statement over the loans' expected life.

 

The movement in interest-rate swaps relates to the change in the 'mark to market' valuations for the year for swaps subject to hedge accounting.

 

Non-cash movement in net lease liabilities

28 July

 

2024


£000

Recognition of new leases

(8,617)

Recognition of new lease assets

1,900

Remeasurements of existing leases liabilities

(22,458)

Remeasurements of existing leases assets

(516)

Disposals and derecognised leases

2,081

Lease transfers to property, plant and equipment

14,179

Exchange differences

(330)

Non-cash movement in net lease liabilities

(13,761)

 

11. Dividends paid and proposed

 

The board proposes, subject to shareholders' consent, to pay a final dividend of 12.0p (2023: nil) per share, on 28 November 2024, to those shareholders on the register on 25 October 2024, giving a total dividend for the year of 12.0p per share.

 

12.  Intangible assets






 

 

 

 




 

 

Computer
software and
development
£000

Assets
under
construction
£000

Total
£000

Cost:

 







At 31 July 2022




35,602

433

36,035




1,169

1,689

2,858

Disposals





-

(9)

(9)

At 30 July 2023




36,771

2,113

38,884




2,505

101

2,606




2,114

(2,114)

-

Exchange differences




(4)

-

(4)

Disposals





(2,516)

-

(2,516)

At 28 July 2024

 

 

 

38,870

100

38,970













Accumulated amortisation

 





At 31 July 2022




(30,626)

-

(30,626)

Provided during the period



(1,827)

-

(1,827)

Reversal of impairment losses



74


74

At 30 July 2023




(32,379)

-

(32,379)

Provided during the period



(1,937)

-

(1,937)

Exchange differences




4

-

4

Disposals





1,275

-

1,275

At 28 July 2024

 

 

 

(33,037)

-

(33,037)

 








Net book amount at 28 July 2024

 

 

5,833

100

5,933

Net book amount at 30 July 2023




4,392

2,113

6,505

Net book amount at 31 July 2022




4,976

433

5,409

 

 

The majority of intangible assets relates to computer software and software development. Examples include the development costs of the Wetherspoon customer-facing app and other bespoke company applications.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.  Property, plant and equipment


Freehold and long leasehold property
£000

Short-leasehold property
£000

Equipment fixtures and fittings
£000

Assets under construction
£000

Total
£000

Cost






At 31 July 2022

1,477,334

280,330

731,115

75,451

2,564,230

Additions

19,315

5,983

32,148

10,323

67,769

Transfers from capitalised leases

(464)

-

-

-

(464)

Transfers

6,551

1,967

7,900

(16,418)

-

Exchange differences

1,289

57

214

253

1,813

Transfer to held for sale

(527)

-

(419)

-

(946)

Disposals

(16,448)

(8,750)

(7,574)

(4,719)

(37,491)

Reclassifications

7,003

(7,003)

-

-

-

At 30 July 2023

1,494,053

272,584

763,384

64,890

2,594,911

Additions

36,085

4,347

52,105

22,367

114,904

Transfers from capitalised leases

(1,753)

-

-

-

(1,753)

Transfers

21,880

1,225

6,414

(29,519)

-

Exchange differences

(917)

(43)

(168)

(183)

(1,311)

Transfer to held for sale

(7,335)

-

-

-

(7,335)

Disposals

(42,970)

(10,892)

(6,601)

-

(60,463)

Reclassifications

8,661

(8,661)

-

-

-

At 28 July 2024

1,507,704

258,560

815,134

57,555

2,638,953

Accumulated depreciation and impairment

At 31 July 2022

(374,533)

(171,516)

(589,104)

(2,215)

(1,137,368)

Provided during the period

(21,958)

(9,056)

(39,159)

-

(70,173)

Transfers from investment property

-

-

-

-

-

Exchange differences

(35)

(13)

(184)

-

(232)

Impairment loss

(30,478)

(5,488)

-

-

(35,966)

Reversal of impairment losses

700

3,440

1,290

-

5,430

Transfer to held for sale

206

-

341

-

547

Disposals

5,514

7,534

6,005

1,614

20,667

Reclassifications

(4,523)

4,523

-

-

-

At 30 July 2023

(425,107)

(170,576)

(620,811)

(601)

(1,217,095)

Provided during the period

(19,844)

(8,184)

(35,468)

-

(63,496)

Transfers to capitalised leases

211

-

-

-

211

Exchange differences

35

12

91

-

138

Impairment loss

(16,335)

(1,237)

(2,362)

(5,334)

(25,268)

Reversal of impairment losses

6,612

584

386

-

7,582

Transfer to held for sale

4,847

-

-

-

4,847

Disposals

13,379

7,202

4,171

3,993

28,745

Reclassifications

(5,725)

5,725

-

-

-

At 28 July 2024

(441,927)

(166,474)

(653,993)

(1,942)

(1,264,336)

 

 

 

 

 

 

Net book amount at 28 July 2024

1,065,777

92,086

161,141

55,613

1,374,617

Net book amount at 30 July 2023

1,068,946

102,008

142,573

64,289

1,377,816

Net book amount at 31 July 2022

1,102,801

108,814

142,011

73,236

1,426,862







 

During the period, an amount of £76,389,000 (2023: £41,646,000) was spent on the reinvestment of existing pubs. £21,944,000 (2023: £11,202,000) was spent on freehold reversions. £11,933,000 (2023: £20,361,000) was spent on investment in new pubs and pub extensions. This led to a total capital expenditure of £110,266,000 (2023: £73,209,000).

 

Reclassifications relate to assets transferred from short leasehold property to freehold and long leasehold property on a freehold reversion.

 

 

 

 

 

14. Investment property

 

The company owns six (2023: six) freehold properties with existing tenants - and these assets have been classified

as investment properties:

 

 




 

 

 

 

Total
£000

Cost:

 







At 31 July 2022






24,535

Additions







9

At 30 July 2023






24,544

At 28 July 2024

 

 

 

 

 

24,544

 
















Accumulated depreciation

 





At 31 July 2022






(1,171)

Provided during the period





(185)

Impairment loss







(4,448)

At 30 July 2023






(5,804)

Provided during the period





(176)

Impairment loss






(347)

Reversal of impairment loss







73

At 28 July 2024

 

 

 

 

 

(6,254)

 








Net book amount at 28 July 2024

 

 

 

 

18,290

Net book amount at 30 July 2023






18,740

Net book amount at 31 July 2022






23,364

 

Rental income received from investment properties in the period was £1,205,000 (2023: £1,197,000).

 

At the year end, the investment properties were independently valued at £18,290,000 giving rise to an impairment charge of £347,000 (2023: £4,448,000) and an impairment reversal of £73,000, to adjust their net book values

 

 

 

15. Events after the balance sheet date

 

There were no significant events after the balance sheet date.

 

 



 

16. Going Concern

 

The directors have made enquiries into the adequacy of the Company's financial resources, through a review of the Company's budget and medium-term financial plan, including capital expenditure plans and cash flow forecasts.

 

In line with accounting standards, the going concern assessment period is the 12-months from the date of approval of this report (approximately the end of quarter 1 of FY26).

 

The Company has modelled a 'base case' forecast in which recent momentum of sales, profit and cash flow growth is sustained. Within this forecast, the Company has anticipated continued high levels of inflation, particularly on wages, utility costs and repairs. The base case scenario indicates that the Company will have sufficient resources to continue to settle its liabilities as they fall due and operate within its leverage covenants for the going concern assessment period.  

 

A more cautious, yet plausible, scenario has been analysed, in which lower sales growth is realised. The Company has reviewed, and is satisfied with, the mitigating actions which it could take if such an outcome were to occur. Such actions could include reducing discretionary expenditure and/or implementing price increases. Under this scenario, the Company would still have sufficient resources to settle liabilities as they fall due and sensible headroom within its covenants through the duration of the going concern review period.  

 

The Company has also performed a 'reverse stress case' which shows that it could withstand a 13% reduction in like-for-like sales from those assessed in the 'base case' throughout the going concern period, as well as costs assumed to increase at a similar level to the downside scenario, before the covenant levels would be exceeded towards the end of the period. The directors consider this scenario to be remote as, other than when the business was closed during the pandemic, it has never seen sales decline at anywhere close to that rate. Furthermore, the Company could take additional mitigating actions, in such a scenario, to prevent any covenant breach.  

 

After due consideration of the matters set out above, the directors have satisfied themselves that the Company will continue in operational existence for the foreseeable future. For this reason, the Company continues to adopt the going-concern basis in preparing its financial statements.

 

17. Prior year restatements

 

During the year, it was identified and agreed that two previous year restatements should be recognised for the period ended 31 July 2022. The restatements are disclosed and described below:

 

Restatement of IFRS 16 right-of-use asset

Due to errors identified in the lease database, in the period ended 28 July 2024 the company migrated to a new lease accounting system to manage the estate. As a result, the right-of-use asset and reserves balance as at 31 July 2022 has been restated by £8 million. The position as at 30 July 2023 has also been restated.

 

Restatement of deferred tax asset

During the period, it was identified that there was certainty of recovery of historical capital losses against rolled over gains relating to the year ended 31 July 2022 and therefore, a deferred tax asset should have been recognised at this point totalling £5.6 million. As a result, the position as at 30 July 2023 has also been restated.

 

The disclosures impacted as a result of the above two misstatements have been identified throughout the financial statements. The effect on specific financial statement line items within the Statement of changes in equity and Balance Sheet are as follows:

SOCIE

Reported in 52 weeks ended

31 July 2022

£000

 

 

Restatement

£000

Restated 52 weeks ended 31 July 2022

£000

Retained earnings

(74,373)

13,600

(60,773)

Total shareholders equity

321,885

13,600

335,485

Balance Sheet




Right-of-use assets

419,416

8,000

427,416

Deferred tax liability

34,718

5,600

40,318

Retained earnings

(74,373)

13,600

(60,773)

 

 

 

 

 

SOCIE

Reported in 52

weeks ended

30 July 2023

£000

 

 

Restatement

£000

Restated 52 weeks ended 30 July 2023

£000

Retained earnings

(17,132)

13,600

(3,532)

Total shareholders equity

399,458

13,600

413,058

Balance Sheet




Right-of-use assets

387,353

8,000

395,353

Deferred tax liability

(65,752)

5,600

(60,152)

Retained earnings

(17,132)

13,600

(3,532)




 

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