J D Wetherspoon’s like-for-like (LfL) sales grew by 5.1% in the first 25 weeks of the current financial year. Bar, food and slot machine revenues were in positive territory, more than offsetting a 6.5% decline in hotel room sales.
LfL sales growth slowed in the second quarter to 4.6%, despite a 6.1% increase over the festive period.
Pub numbers have reduced slightly since the year end to 796 units. 9 openings are planned this year as well as four new franchised pubs at Haven Holiday parks.
Net debt before lease liabilities is anticipated to rise from £660mn to between £680-700mn.
Annual labour cost increases are expected to increase by £60mn from 1 April this year, which the group said made forecasting more challenging. However, it remains confident of a ‘reasonable’ outcome for the year. Consensus forecasts suggest a 5% increase in underlying operating profit to £146.5mn.
The shares were flat in early trading.
Our view
HL view to follow.
J D Wetherspoon key facts
All ratios are sourced from Refinitiv, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is not advice or a recommendation to buy, sell or hold any investment.No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.Non - independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place(including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.Please see our full non - independent research disclosure for more information.