REG - Wetherspoon (JD) PLC - Interim Results
21/03/2025 07:15
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RNS Number : 5786B Wetherspoon (JD) PLC 21 March 2025
21 March 2025
J D WETHERSPOON PLC
INTERIM RESULTS
(For the 26 weeks ended 26 January 2025)
FINANCIAL HIGHLIGHTS Var %
Before separately disclosed items
Like-for-like sales (vs FY2024) +4.8%
Revenue £1,029.5m (2024: £991.0m) +3.9%
Profit before tax £32.9m (2024: £36.0m) -8.6%
Operating profit £64.8m (2024: £67.7m) -4.3%
Basic earnings per share 21.5p (2024: 20.3p) +5.9%
Free cash outflow per share (0.4p) (2024: outflow (4.8p)) +91.7%
Half year dividend 4.0p (2024: 0.0p) +100.0%
After separately disclosed items(1)
Profit before tax £41.3m (2024: £26.1m) +58.2%
Operating profit £63.0m (2024: £72.0m) -12.5%
Basic earnings per share 27.8p (2024: 15.2p) +82.9%
(1)Separately disclosed items as disclosed in account note 2.
Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc,
said:
"In the last seven weeks, to 16 March 2025, like-for-like sales increased by
5.0%.
"Increases in national insurance and labour rates will result in company cost
increases of approximately £60 million per annum, which amount to
approximately £1,500 per pub, per week.
"Since labour costs are around 35% of the pub industry's sales, compared to
around 11% for supermarkets, increases of this nature inevitably have a
disproportionate impact on pubs, exacerbating the already-wide price
differential for customers between the on and off-trade.
"The combination of much higher VAT rates for pubs than supermarkets, combined
with increased labour costs will weigh heavily on the pub industry.
"The company currently anticipates a reasonable outcome for the 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
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 27 July 2025 or 28 July 2024. The financial information for the
period ended 28 July 2024 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 2025 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 4 October 2024.
5. The current financial year comprises 52 trading
weeks to 27 July 2025.
6. The next trading update will be issued on 7 May
2025.
CHAIRMAN'S STATEMENT
Trading Summary
Total sales in the half year FY25 were £1,030 million, an increase of 3.9%
compared to FY24. The company opened two pubs in the period (the Grand
Assembly in Marlow and The Lion and The Unicorn in Waterloo Station, London)
and sold six, with 796 pubs open at the period end.
LFL sales increased by 4.8% - bar sales increased by 4.3%, food by 5.4% and
slot/fruit machines by 12.4%.
Operating profit, before separately disclosed items, was £64.8 million (2024:
£67.7 million). The operating margin, before separately disclosed items, was
6.30% (2024: 6.83%), mainly due to labour and utility costs which, in total,
were £30.6 million higher.
Profit, before tax and separately disclosed items, was £32.9 million (2024:
£36.0 million).
The pub disposals, referred to above, gave rise to a cash inflow of £3.9
million. There was an exceptional loss on disposal of £2.2 million,
recognised in the income statement, relating to these pubs.
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. The company expects to open a further five franchise pubs in the
second half of the current financial year - four of these will be at Haven
Holiday Parks.
Earnings
Earnings per share, before separately disclosed items, assisted by share
repurchases (please see "Dividends and return of capital", below), were 21.5p
(2024: 20.3p).
Capital Investment
Total capital investment was £64.6 million (2024: £57.2 million). £10.4
million was invested in new pubs and pub extensions (2024: £10.5 million),
£40.6 million in existing pubs and IT (2024: £34.6 million) and £13.6
million in freehold reversions of properties where Wetherspoon was the tenant
(2024: £12.1 million).
Separately disclosed items
Overall, there was a pre-tax 'separately disclosed profit' of £8.5 million
(2024: loss of £9.9 million), mainly as a result of a positive movement in
the value of interest rate swaps of £11.1 million, partially offset by a loss
on disposal of £2.2 million. Details are listed in note 2 of the accounts.
The tax effect on separately disclosed items is a debit of £1.1 million
(2024: credit of £3.7 million).
The net book value of the company's assets in the balance sheet at the half
year end were £1.40 billion, which is approximately seven times the company's
EBITDA (pre IFRS-16), in the last 12 months to January 2025, of £191 million.
Free cash flow
It is anticipated that free cash flow ("FCF"), which has often been higher
than profit before tax will, in future, approximately correspond to profit
after tax.
The main reasons for the reduction in the ratio of FCF to profit before tax
are:
- corporation tax has increased from 19 to 25 per cent between 2019 and today,
which will reduce FCF.
- capital reinvestment in existing pubs, which is deducted in calculating FCF,
averaged 3.1% of sales in the five years up to 2019. It is estimated that
reinvestment will increase to 3.7% of sales, as a result of an increase in
expenditure in areas such as IT, staff rooms, updated kitchen equipment and
heating and cooling systems.
- depreciation (which is deducted from profit before tax, but added back to
FCF) has decreased as a percentage of sales since some older leasehold pubs,
which are still in use, and some older assets, have been fully depreciated. In
addition, there are likely to be fewer new pubs, which have higher levels of
depreciation and higher levels of capital allowances. Depreciation in the five
years to 2019 averaged 4.4% of sales and it is estimated that it will average
3.5% in the future.
In the period under review, there was a free cash outflow of £0.5 million
mainly as a result of negative working capital of £7.6 million, higher
reinvestment of £41 million, higher-than-usual share purchases for employees
("SIPs") and a corporation tax payment in the period of £10.9 million, which
was higher than the tax charge in the income statement
Balance sheet
Debt, excluding IFRS-16 lease debt, was £703.5 million at the period end (28
July 2024: £664.8 million).
On an IFRS-16 basis, which includes notional debt from leases, debt increased
from £1.07 billion to £1.10 billion at the FY25 Interim review.
Dividends and return of capital
The board declared an interim dividend of 4.0p per share for the current
interim financial period ending 26 January 2025 (2024: nil). The interim
dividend will be paid on 30(th) May 2025 to those shareholders on the register
at 1(st) May 2025.
During the period, 1,840,000 shares (1.5% of the share capital) were purchased
by the company for cancellation, at a cost of £11.5 million, including stamp
duty and fees, representing an average cost per share of 621p.
Financing
The company has total available finance facilities of £938 million.
On 6 June 2024, the company signed a new four-year £840 million banking
agreement on attractive terms.
In the last six months, the company has agreed two additional interest rate
swaps, at rates of between 4.00% and 4.14%, excluding the banks' margin. The
details are shown below:
Swap Value Start Date End Date Weighted Average %
£200m 23-Aug-23 06-Feb-25 5.67%
£400m 06-Feb-25 06-Feb-28 4.23%
£200m 06-Feb-25 06-Feb-28 4.14%
£500m 07-Feb-28 06-Feb-30 4.00%
The total cost of the company's debt, in the period under review, including
the banks' margin was 6.59%.
Taxation
The total tax charge for the period was £8.0 million (although as indicated
in the section entitled "Free Cash Flow", above, the tax payment in the period
was £10.9 million) in respect of profits before separately disclosed items
(2024: £6.6 million).
The total tax charge comprises two parts. The first part is the actual current
tax (the 'cash' tax) which this year is £5.4 million (2024: £0.1 million).
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 £2.6 million
(2024: £11.1 million).
Important Information
Please note that the sections in italics below, which have been updated,
contain important information about the company, which is mostly a
reproduction from the chairman's statement in the 2024 annual report:
We're from the government and we're here to help you
At the risk of boring shareholders, we are repeating, in this section, some
comments made at the year-end regarding proposed changes to the licensing laws
and a tax system which inexplicably benefits supermarkets, since many
government ministers, over the decades, appear to have a hobby of introducing
daft regulations and taxes which are to the detriment of the pub industry.
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.
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 period ended 26 January 2025, the company generated taxes of £410.4
million.
The table below shows the £6.6 billion of tax revenue generated by the
company, its staff and customers in the last ten and a half years.
Each pub, on average, generated £7.6 million in tax during that period. The
tax generated by the company, during this period, equates to approximately
25.2 times the company's profits after tax.
Republic of Ireland pubs contributed €5.5 million of tax contributions
during the year, of which €2.6 million related to VAT, €1.5 million
alcohol duty and €1.1 million employment taxes.
2025 H1 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 TOTAL
2015 to 2025 H1
£m £m £m £m £m £m £m £m £m £m £m £m
VAT 199.2 394.7 372.3 287.7 93.8 244.3 357.9 332.8 323.4 311.7 294.4 3,212.2
Alcohol duty 81.7 163.7 166.1 158.6 70.6 124.2 174.4 175.9 167.2 164.4 161.4 1,608.2
PAYE and NIC 74.3 134.7 124.0 141.9 101.5 106.6 121.4 109.2 96.2 95.1 84.8 1,189.7
Business rates 21.5 41.3 49.9 50.3 1.5 39.5 57.3 55.6 53.0 50.2 48.7 468.8
Corporation tax 10.9 9.9 12.2 1.5 - 21.5 19.9 26.1 20.7 19.9 15.3 157.9
Corporation tax credit (historic capital allowances) - - - - - - - - - - -2 -2.0
Fruit/slot Machine duty 8.8 16.7 15.7 12.8 4.3 9.0 11.6 10.5 10.5 11.0 11.2 122.1
Climate change levies 8.6 10.2 11.1 9.7 7.9 10.0 9.6 9.2 9.7 8.7 6.4 101.1
Stamp duty 0.6 1.1 0.9 2.7 1.8 4.9 3.7 1.2 5.1 2.6 1.8 26.4
Sugar tax 1.3 2.6 3.1 2.7 1.3 2.0 2.9 0.8 - - - 16.7
Fuel duty 0.9 2.0 1.9 1.9 1.1 1.7 2.2 2.1 2.1 2.1 2.9 20.9
Apprenticeship levy 2.0 2.5 2.5 2.2 1.9 1.2 1.3 1.7 0.6 - - 15.9
Carbon tax - - - - - - 1.9 3.0 3.4 3.6 3.7 15.6
Premise licence and TV licences 0.3 0.5 0.5 0.5 0.5 1.1 0.8 0.7 0.8 0.8 1.6 8.1
Landfill tax - - - - - - - 1.7 2.5 2.2 2.2 8.6
Insurance tax 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 - 2.0
Furlough tax - - - -4.4 -213.0 -124.1 - - - - - -341.5
Eat out to help out - - - - -23.2 - - - - - - -23.2
Local government grants - - - -1.4 -11.1 - - - - - - -12.5
TOTAL TAX 410.4 780.2 760.4 666.9 39.1 442.1 765.1 730.7 695.3 672.4 632.4 6,595.0
TAX PER PUB (£m) 0.52 0.98 0.92 0.78 0.05 0.51 0.87 0.83 0.78 0.71 0.67 7.6
TAX AS % OF NET SALES 39.9% 38.3% 39.5% 38.3% 5.1% 35.0% 42.1% 43.1% 41.9% 41.8% 42.6% 37.1%
PROFIT/(LOSS) AFTER TAX 24.9 58.5 33.8 -24.9 -146.5 -38.5 79.6 83.6 76.9 56.9 57.5 261.8
Note - this table is prepared on a cash basis. 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 £20.4 million of bonuses and free shares to
employees, of which 97.9% was paid to staff below board level and 86.3% was
paid to staff working in our pubs.
The average length of service of a pub manager increased to 15.2 years, and of
a kitchen manager is 11.2 years.
Wetherspoon has been recognised by the Top Employers Institute as a Top
Employer United Kingdom 2025. It is the 20th 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 2025' 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 £24.4 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, handwashing 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
https://www.jdwetherspoon.com/wp-content/uploads/2025/03/pages-for-interim-report.pdf
(https://www.jdwetherspoon.com/wp-content/uploads/2025/03/pages-for-interim-report.pdf)
.
Wetherspoon came second in the 2024 'Out to Lunch' league table, compiled by
the Soil Association. 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, 41% of
the dishes on the menu that is available in the majority of pubs are
vegetarian, 14% are vegan and 27% are under 500 calories.
Cod and haddock are sourced from fisheries which have been certified as
well-managed and sustainable fisheries.
Wetherspoon uses 100% UK and Irish beef on its food menu, traceable from farm
to fork.
100% of the eggs served on the menu are free range. All shell eggs are
certified with the British Lion quality mark and are RSPCA assured, ensuring
the highest standards of animal welfare.
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 235
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, glasswashing 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. 98.1% of Wetherspoon pubs have
achieved 4 or 5 stars.
Sustainability, recycling and the environment
Wherever possible, Wetherspoon separates waste into nine streams: food waste;
glass; tins/cans; cooking oil; paper/cardboard; plastic; lightbulbs; waste
electrical and electronic equipment (WEEE); general waste and from December
2024 - Tetra Pak cartons
Wetherspoon's national distribution centre, at Daventry, also includes an
in-house 24-hour recycling centre, with a dedicated workforce and specialist
equipment. When making deliveries to pubs, lorries collect recycling, used
cooking oil and reusable items for return to the recycling centre - so
reducing the company's carbon footprint from reduced road miles.
4,562 tonnes of recyclable waste were processed in the first six months of
this 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.
Automated meter readers for electricity and gas, which provide half hourly
consumption data, are installed in the majority of pubs to facilitate energy
consumption reporting. We are now also commencing a rollout of 100 automated
meter readers for water in our highest consuming sites.
Technologies such as Voltage Optimisation and solar are being trialled.
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 tax(1) Bonus and free shares as % of profits
£m £m
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%
2025 H1 20 25 80%
Total(2) 467 838 55.7%
(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.
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
2025 H1 15.2 11.2
Food hygiene ratings
Wetherspoon has always emphasised the importance of hygiene standards.
We now have 734 pubs rated on the Food Standards Agency's website (see table
below). The average score is 4.99, with 99.2% of the pubs (all but 6)
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 55 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
2025 H1 734 4.99 99.2
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
(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 just two
licensees and a police office. 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.
World Health Organisation report
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
(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."
Current trading and outlook
In the last seven weeks, to 16 March 2025, like-for-like sales increased by
5.0%.
As previously indicated, increases in national insurance and labour rates will
result in company cost increases of approximately £60 million per annum,
which amount to approximately £1,500 per pub, per week.
Since labour costs are around 35% of the pub industry's sales, compared to
around 11% for supermarkets, increases of this nature inevitably have a
disproportionate impact on pubs, exacerbating the already-wide price
differential for customers between the on and off-trade.
The combination of much higher VAT rates for pubs than supermarkets, combined
with increased labour costs will weigh heavily on the pub industry.
The company currently anticipates a reasonable outcome for the 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
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
case 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 26 weeks ended 26 January 2025
J D Wetherspoon plc, company number: 1709784
Notes Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks
ended ended ended ended ended ended
26 January 26 January 26 January 28 January 28 January 28 January
2025 2025 2025 2024 2024 2024
before separately after before separately after
separately disclosed separately separately disclosed separately
disclosed items disclosed disclosed items disclosed
items items items items
£000 £000 £000 £000 £000 £000
Revenue 1 1,029,518 - 1,029,518 990,954 - 990,954
Other operating income 2 - - - - 4,356 4,356
Operating costs 2 (964,691) (1,806) (966,497) (923,272) - (923,272)
Operating profit 64,827 (1,806) 63,021 67,682 4,356 72,038
Property gains/(losses) 2 - (825) (825) 88 (15,179) (15,091)
Finance income 2 1,256 11,107 12,363 1,195 1,567 2,762
Finance costs 2 (33,214) - (33,214) (32,931) (636) (33,567)
Profit/(loss) before tax 32,869 8,476 41,345 36,034 (9,892) 26,142
Income tax charge 4 (7,988) (1,131) (9,119) (11,147) 3,653 (7,494)
Profit/(loss) for the period 24,881 7,345 32,226 24,887 (6,239) 18,648
Profit/(loss) per ordinary share (p)
- Basic 5 21.5 6.3 27.8 20.3 (5.1) 15.2
- Diluted 5 20.6 6.1 26.7 19.6 (4.9) 14.7
STATEMENT OF COMPREHENSIVE INCOME for the 26 weeks ended 26 January 2025
Unaudited Unaudited Audited
Notes 26 weeks 26 weeks 52 weeks
ended ended ended
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Items which will be reclassified subsequently to profit or loss:
Interest rate swaps: gain taken to other comprehensive income 10 - 38 38
Interest rate swaps: loss reclassification to the income statement 10 (6,986) (5,601) (18,025)
Tax on items taken directly to other comprehensive income - - -
Currency translation differences (596) (1,388) (1,294)
Net loss recognised directly in other comprehensive income (7,582) (6,951) (7,582)
Profit for the period 32,226 18,648 48,785
Total comprehensive profit for the period 24,644 11,697 29,504
CASH FLOW STATEMENT for the 26 weeks ended 26 January 2025
( )
J D Wetherspoon plc, company number: 1709784 Unaudited Unaudited Unaudited Unaudited Audited Audited
free cash free cash free cash
flow(1) flow(1) flow(1)
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
Note ended ended ended ended ended ended
26 January 26 January 28 January 28 January 28 July 28 July
2025 2025 2024 2024 2024 2024
£000 £000 £000 £000 £000 £000
Cash flows from operating activities
Cash generated from operations 6 115,230 115,230 78,719 78,719 232,907 232,907
Interest received 1,107 1,107 1,053 1,053 1,765 1,765
Interest paid (25,100) (25,100) (26,770) (26,770) (52,482) (52,482)
Cash proceeds on termination of interest rate swaps - - 14,783 14,783 14,783 14,783
Corporation tax paid (10,858) (10,858) (6,600) (6,600) (9,940) (9,940)
Lease interest 11 (7,254) (7,254) (7,321) (7,321) (14,471) (14,471)
Net cash flow from operating activities 73,125 73,125 53,864 53,864 172,562 172,562
Cash flows from investing activities
Reinvestment in pubs (34,664) (34,664) (33,612) (33,612) (76,389) (76,389)
Reinvestment in business and IT projects (5,988) (5,988) (975) (975) (6,243) (6,243)
Investment in new pubs and pub extensions (10,375) - (10,510) - (11,933) -
Freehold reversions and investment properties (13,580) - (12,122) - (21,944) -
Proceeds of sale of property, plant and equipment 5,686 - 10,688 - 17,872 -
Net cash flow used in investing activities (58,921) (40,652) (46,531) (34,587) (98,637) (82,632)
Cash flows from financing activities
Equity dividends paid (14,807) - - - - -
Purchase of own shares for cancellation (8,891) - (34,081) - (39,505) -
Purchase of own shares for share-based payments (11,763) (11,763) (6,630) (6,630) (12,738) (12,738)
Loan issue cost (294) (294) - - (4,948) (4,948)
Advances/(repayments) under bank loans 60,000 - 15,000 - (4,000) -
Other loan receivables 391 - 370 - 778 -
Lease principal payments 11 (20,915) (20,915) (18,729) (18,729) (39,207) (39,207)
Asset-financing principal payments - - (2,107) - (4,245) -
Net cash flow from (used in) financing activities 3,721 (32,972) (46,177) (25,359) (103,865) (56,893)
Net change in cash and cash equivalents 17,925 (38,844) (29,940)
Opening cash and cash equivalents 57,233 87,173 87,173
Closing cash and cash equivalents 75,158 48,329 57,233
Free cash flow(1) (499) (6,082) 33,037
( )
(1) Free cash flow is a measure not required by accounting standards; a
definition is provided in the accounting policies within the 2024 Annual
Report.
BALANCE SHEET as at 26 January 2025
J D Wetherspoon plc, company number: 1709784 Notes Unaudited Unaudited Audited
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Assets
Non-current assets
Property, plant and equipment 1,397,306 1,374,806 1,374,617
Intangible assets 6,902 6,489 5,933
Investment property 18,202 18,652 18,290
Right-of-use assets 11 367,864 364,072 373,338
Other loan receivable 803 1,523 1,194
Derivative financial instruments 10 314 - -
Lease assets 11 9,374 9,771 8,860
Total non-current assets 1,800,765 1,775,313 1,782,232
Current assets
Lease assets 11 1,066 1,617 1,358
Assets held for sale 8 1,500 1,750 2,488
Inventories 31,460 29,374 28,404
Receivables 27,276 27,543 26,576
Current income tax receivables 4,837 6,301 6,079
Cash and cash equivalents 75,158 48,329 57,233
Total current assets 141,297 114,914 122,138
Total assets 1,942,062 1,890,227 1,904,370
Current liabilities
Borrowings 9 - (2,093) -
Derivative financial instruments 10 (78) - (701)
Trade and other payables (300,364) (281,294) (298,059)
Provisions (1,382) (2,817) (3,047)
Lease liabilities 11 (47,629) (48,413) (49,582)
Total current liabilities (349,453) (334,617) (351,389)
Non-current liabilities
Borrowings 9 (779,540) (742,879) (719,134)
Derivative financial instruments 10 (889) (9,116) (4,073)
Deferred tax liabilities (56,660) (64,359) (59,487)
Lease liabilities 11 (363,183) (369,938) (368,660)
Total non-current liabilities (1,200,272) (1,186,292) (1,151,354)
Total liabilities (1,549,725) (1,520,909) (1,502,743)
Net assets 392,337 369,318 401,627
Shareholders' equity
Share capital 2,435 2,485 2,472
Share premium account 143,170 143,170 143,170
Capital redemption reserve 2,477 2,337 2,440
Other reserves 168,764 234,669 195,074
Hedging reserve 6,808 26,218 13,794
Currency translation reserve (378) 578 106
Retained earnings 69,061 (40,139) 44,571
Total shareholders' equity 392,337 369,318 401,627
( )
STATEMENT OF CHANGES IN EQUITY
J D Wetherspoon plc, company number: 1709784
Notes Share Share premium Capital Other Currency
capital account redemption Reserves Hedging translation Retained Total
reserve reserve reserve earnings
£000 £000 £000 £000 £000 £000 £000 £000
As at 28 January 2024 as previously reported 2,485 143,170 2,337 234,669 26,218 578 (40,139) 369,318
Effect of restatements(1) - - - - - - 13,600 13,600
Restated(1) as at 28 January 2024 2,485 143,170 2,337 234,669 26,218 578 (26,539) 382,918
Total comprehensive income - - - - (12,424) (472) 30,703 17,807
Profit for the period - - - - - 30,137 30,137
Interest rate swaps: amount reclassified to the income statement - - - - (12,424) - - (12,424)
Currency translation differences - - - - - (472) 566 94
Purchase of own shares and cancellation (13) - 103 (39,595) - - 39,458 (47)
Share-based payment charges - - - - - - 7,008 7,008
Tax on share-based payment 4 - - - - - - 49 49
Purchase of own shares for share-based payments - - - - - - (6,108) (6,108)
As at 28 July 2024 2,472 143,170 2,440 195,074 13,794 106 44,571 401,627
Total comprehensive income - - - - (6,986) (484) 32,114 24,644
Profit for the period - - - - - 32,226 32,226
Interest rate swaps: amount reclassified to the income statement - - - - (6,986) - - (6,986)
Currency translation differences - - - - - (484) (112) (596)
Purchase of own shares and cancellation (37) - 37 (11,503) - - - (11,503)
Share-based payment charges - - - - - - 4,295 4,295
Tax on share-based payment 4 - - - - - - (156) (156)
Purchase of own shares for share-based payments - - - - - - (11,763) (11,763)
Dividends - - - (14,807) - - - (14,807)
As at 26 January 2025 2,435 143,170 2,477 168,764 6,808 (378) 69,061 392,337
(1)Restated 30 July 2023. See accounting policies in Annual Report 2024.
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. The other reserve is determined to be distributable
for the purposes of the Companies Act 2006.
During the year, 1,840,000 shares were repurchased by the company and
cancelled at a cost of £11.5 million (£2.6 million of which was paid after
26 January 2025 and has been treated as a current liability in the balance
sheet), including fees, representing an average cost per share of 621p.
See note 10 for details on the hedging reserve.
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 26 January 2025, the company had distributable reserves of £244.3
million (2024: restated £234.9 million).
NOTES TO THE FINANCIAL STATEMENTS
( )
1. Revenue
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Bar 588,626 570,810 1,167,450
Food 392,490 374,714 773,002
Slot/fruit machines 35,490 32,232 66,886
Hotel 11,202 12,131 25,337
Other 1,710 1,067 2,825
1,029,518 990,954 2,035,500
2. Separately disclosed items
Unaudited Unaudited
26 weeks 26 weeks
ended ended
26 January 28 January
2025 2024
£000 £000
Operating items
Government grants - 14
Depreciation adjustment on impaired assets (968) 4,139
Other (838) 203
Total operating (loss)/profit (1,806) 4,356
Property losses
Disposal programme
Loss on disposal of pubs (2,160) (5,913)
(2,160) (5,913)
Other property (gains)/losses
Impairment of assets under construction - (4,583)
Impairment of property, plant and equipment (2,489) (5,848)
Reversal of property, plant and equipment impairment 3,914 358
Impairment of right-of-use assets (413) -
Reversal of right-of-use assets impairment 323 807
1,335 (9,266)
Total property losses (825) (15,179)
Other items
Finance costs - (636)
Finance income 11,107 1,567
11,107 931
Taxation
Tax effect on separately disclosed items (1,131) 3,653
(1,131) 3,653
Total separately disclosed items 7,345 (6,239)
2. Separately disclosed items (continued)
Operating items
Local government support grants
The company has not received any government grants in the period (2024:
£14,000 associated with the COVID-19 pandemic).
Depreciation adjustment on impaired assets
An adjustment of £968,000 for previously under charged depreciation on
impaired fixed assets has been recognised this period. In 2024, income of
£4,139,000 was recognised due to an overcharge of depreciation relating to
previously impaired fixed assets and right-of-use assets.
Other
Costs of £838,000 (2024: income of £203,000) have been recognised in the
period, relating to:
· £568,000 (2024: nil) of employee settlement agreements.
· £139,000 (2024: nil) due to a historic VAT correction.
· £72,000 (2024: £517,000) relating to a contractual dispute with a
large supplier which is now resolved.
· £59,000 (2024: nil) relating to property expenditure the company
deems to be outside the usual course of business and therefore classified as
separately disclosed items.
· In the prior period, other income of £1,402,000 was recognised
relating to a settlement agreement offset by costs of £682,000 in relation to
a historic employment tax issue and costs of £517,000, as mentioned above.
Property losses
Costs classified under the 'loss on disposal of pubs' relate to sites sold or
surrendered during the period.
Other property (gains)/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
period, the company recognised a total impairment reversal of £1,335,000
(2024: charge of £9,266,000).
Separately disclosed finance costs and income
The separately disclosed finance costs in the prior period of £636,000 relate
to interest rate swaps.
A credit of £4,120,000 (2024: charge of £6,237,000) relates to the fair
value movement on interest rate swaps. Income of £6,987,000 (2024: income of
£176,000) relates to the amortisation of the hedge reserve to the P&L
relating to discontinued hedges. No hedge ineffectiveness has been recognised
in the period (2024: income of £5,425,000).
Included within separately disclosed finance income during the 26 weeks ended
28 January 2024 is the reversal of overcharged
interest relating to IFRS-16 leases, of £1,567,000.
Taxation
The tax effect on separately disclosed items is a cost of £1,131,000 (2024:
income of £3,653,000).
3. Employee benefits expenses
Unaudited Unaudited
26 weeks 26 weeks
ended ended
26 January 28 January
2025 2024
£000 £000
Wages and salaries 371,229 345,684
Employee support grants - (289)
Social security costs 23,307 21,506
Other pension costs 6,396 5,682
Share-based payments 4,295 4,013
405,227 376,596
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.
Unaudited Unaudited
2025 2024
Number Number
Full-time equivalents
Head office 399 382
Pub managerial 4,686 4,490
Pub hourly paid staff 19,208 19,593
24,293 24,465
2025 2024
Number Number
Total employees
Head office 405 382
Pub managerial 5,005 4,744
Pub hourly paid staff 36,599 36,628
42,009 41,754
The totals above relate to the monthly average number of employees during the
period, not the total of employees at the end of the period.
Share-based payments Unaudited Unaudited
26 weeks 26 weeks
ended ended
26 January 28 January
2025 2024
Shares awarded during the year (shares) 2,085,491 1,548,446
Average price of shares awarded (pence) 723 658
Market value of shares vested during the year (£000) 6,116 4,835
Share awards not yet vested (£000) 20,662 15,116
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.
4. Income tax expense
The taxation charge for the 26 weeks ended 26 January 2025 is based on the
pre-separately disclosed items profit before tax of £32.9 million and the
estimated effective tax rate before separately disclosed items for the 26
weeks ended 26 January 2025 of 24.3% (28 July 2024: 20.5%). This comprises a
pre-separately disclosed current tax rate of 16.5% (28 July 2024: 3.9%) and a
pre-separately disclosed deferred tax charge of 7.8% (28 July 2024: 20.5%
charge).
The UK standard weighted average tax rate for the period is 25% (2024: 25%).
The exceptional current tax charge relates entirely to the tax on profit
crystallised when terminating interest rate SWAP contracts. For tax purposes
the profits are spread over the remaining life of the underlying hedged item
which results in the high exceptional ETR in the current period. A deferred
tax liability is recognised in respect of this item.
Unaudited Unaudited Unaudited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended Ended
26 January 2025 26 January 2025 28 January 2024 28 January 2024 28 July 2024 28 July 2024
before after before after before after
separately separately separately separately separately separately
disclosed disclosed disclosed Disclosed disclosed disclosed
items items items Items Items Items
£000 £000 £000 £000 £000 £000
Taken through income statement
Current income tax:
Current income tax charge 5,410 12,178 75 8,895 2,901 15,307
Previous period adjustment - - - (245) - (3,043)
Total current income tax 5,410 12,178 75 8,650 2,901 12,264
Deferred tax:
Origination and reversal of temporary differences 2,578 (2,518) 11,072 (1,156) 12,460 (704)
Prior year deferred tax credit - (541) - - - 275
Total deferred tax 2,578 (3,059) 11,072 (1,156) 12,460 (429)
Tax charge 7,988 9,119 11,147 7,494 15,361 11,835
Taken through equity
Current tax (78) (78) (52) (52) (52) (52)
Deferred tax 234 234 (186) (186) (235) (235)
Tax credit 156 156 (238) (238) (287) (287)
Taken through comprehensive income
Deferred tax charge on swaps - - - - - -
Tax (credit)/charge - - - - - -
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.
5. Earnings 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 122,316,552 (2024: 127,671,463) less the
weighted average number of shares held in trust during the financial year of
1,541,173 (2024: 4,618,943). Shares held in trust are shares purchased by the
company to satisfy employee share schemes that 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. For the company, the dilutive shares
are those that relate to employee share schemes that have not been purchased
in advance and have not yet vested. 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.
Unaudited Unaudited Audited
Weighted average number of shares 26 weeks 26 weeks 52 weeks
ended ended ended
26 January 28 January 28 July
2025 2024 2024
Shares in issue 122,316,552 127,671,463 125,291,770
Shares held in trust (6,467,650) (4,618,943) (4,956,072)
Shares in issue - Basic 115,848,902 123,052,520 120,335,698
Dilutive shares(1) 5,007,628 3,466,567 4,693,614
Shares in issue - Diluted 120,856,530 126,519,087 125,029,312
Earnings / (loss) per share
26 weeks ended 26 January 2025 unaudited Profit/(loss) Basic EPS Diluted EPS
£000 pence pence
Earnings (profit after tax) 32,226 27.8 26.7
Exclude effect of separately disclosed items after tax (7,345) (6.3) (6.1)
Earnings before separately disclosed items 24,881 21.5 20.6
Underlying earnings before separately disclosed 24,881 21.5 20.6
26 weeks ended 28 January 2024 unaudited Profit/(loss) Basic EPS Diluted EPS
£000 pence pence(1)
Earnings (profit after tax) 18,648 15.2 14.7
Exclude effect of separately disclosed items after tax 6,239 5.1 4.9
Earnings before separately disclosed items 24,887 20.3 19.6
Exclude effect of property gains/(losses) (88) (0.1) (0.1)
Underlying earnings before separately disclosed 24,799 20.2 19.5
Free cash flow per share Free cash Basic free Diluted free
flow cash flow cash flow
per share per share
£000 pence pence
26 weeks ended 26 January 2025 unaudited (499) -0.4 -0.4
26 weeks ended 28 January 2024 unaudited (6,082) -4.9 -4.8
52 weeks ended 28 July 2024 33,037 27.5 26.4
6. Cash used in/generated from operations
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Profit for the period 32,226 18,648 48,785
Adjusted for:
Tax (note 4) 9,119 7,494 11,835
Share-based charges (note 3) 4,295 4,013 11,021
Loss on disposal of property, plant and equipment 2,652 5,964 14,978
Disposal of capitalised leases & Lease premiums (491) (1,619) (1,519)
Net impairment (reversal)/charge (note 2) (1,335) 9,266 19,098
Interest payable & receivable 24,010 25,718 50,717
Lease interest (note 11) 7,254 5,782 14,471
Separately disclosed Interest (note 2) (11,107) 636 (16,131)
Amortisation of bank loan issue costs 699 236 439
Depreciation and amortisation 56,044 49,675 102,382
Aborted properties costs 12 397 336
Foreign exchange movements (596) (1,388) (1,294)
122,782 124,822 255,118
Change in inventories (3,056) 5,184 6,154
Change in receivables (711) (312) 707
Change in payables (3,785) (50,975) (29,072)
Cash generated from operations 115,230 78,719 232,907
7. Analysis of change in net debt
Unaudited Audited Unaudited
28 January Cash Other 28 July Cash Other 26 January
2024 flows changes 2024 flows changes 2025
£000 £000 £000 £000 £000 £000 £000
Borrowings
Cash and cash equivalents 48,329 8,904 - 57,233 17,925 - 75,158
Other loan receivable - before one year 797 (81) - 716 - - 716
Asset-financing obligations - before one year (2,093) 2,138 (45) - - - -
Current net borrowings 47,033 10,961 (45) 57,949 17,925 - 75,874
Bank loans - due after one year (644,996) 23,948 (181) (621,229) (59,706) (677) (681,612)
Asset-financing obligations - after one year - - - - - - -
Other loan receivable - after one year 1,607 (312) (101) 1,194 (391) - 803
Private placement - after one year (97,883) - (22) (97,905) - (23) (97,928)
Non-current net borrowings (741,272) 23,636 (304) (717,940) (60,097) (700) (778,737)
Net debt (694,239) 34,597 (349) (659,991) (42,172) (700) (702,863)
Derivatives
Interest rate swaps asset - after one year - (14,783) 14,783 - - 314 314
Interest rate swaps liability - within one year - - (701) (701) - 623 (78)
Interest rate swaps liability - after one year (9,116) - 5,043 (4,073) - 3,184 (889)
Total derivatives (9,116) (14,783) 19,125 (4,774) - 4,121 (653)
Net debt after derivatives (703,355) 19,814 18,776 (664,765) (42,172) 3,421 (703,516)
Leases
Lease assets - before one year 1,617 (549) 290 1,358 (582) 290 1,066
Lease assets - after one year 9,771 - (911) 8,860 - 514 9,374
Lease obligations - before one year (48,413) 21,027 (22,196) (49,582) 21,497 (19,544) (47,629)
Lease obligations - after one year (369,938) - 1,278 (368,660) 5,477 (363,183)
Net lease liabilities (406,963) 20,478 (21,539) (408,024) 20,915 (13,263) (400,372)
Net debt after derivatives and lease liabilities (1,110,318) 40,292 (2,763) (1,072,789) (21,257) (9,842) (1,103,888)
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. These are arrangement fees paid in respect
of new borrowings and are charged to the income statement over the expected
life of the loans.
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.
8. Assets held for sale
These relate to situations in which the company had exchanged contracts to
sell a property, but the transaction is not yet complete. As at 26 January
2025, one site was classified as held for sale (28 July 2024: four sites)
Unaudited Unaudited Audited
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Property, plant and equipment 1,500 1,750 2,488
9. Borrowings
Unaudited Unaudited Audited
26 January 28 January 28 July
2025 2024 2024
£000 £000 £000
Current (due within one year)
Other
Lease liabilities 47,629 48,413 49,582
Asset-financing obligations - 2,093 -
Total current borrowings (including lease liabilities) 47,629 50,506 49,582
Non-current (due after one year)
Bank loans
Variable-rate facility 686,000 645,000 626,000
Unamortised bank loan issue costs (4,388) (4) (4,771)
681,612 644,996 621,229
Private placement
Fixed-rate facility 98,000 98,000 98,000
Unamortised private placement issue costs (72) (117) (95)
97,928 97,883 97,905
Other
Lease liabilities 363,183 369,938 368,660
Asset-financing - - -
363,183 369,938 368,660
Total non-current borrowings (including lease liabilities) 1,142,723 1,112,817 1,087,794
Total borrowings (including lease liabilities) 1,190,352 1,163,323 1,137,376
Lease liabilities
The carrying amounts of lease liabilities and the movements during the period
are outlined in note 11.
Asset-financing obligations
Asset-financing obligations relate to asset finance leases of equipment in
pubs.
Variable-rate facility
The company refinanced during 2024 and now has a combined revolving credit
facility of £529 million and term loan of £311 million (28 July 2024:
combined revolving credit facility of £529 million and term loan of £311
million). There was no cash flow impact on refinancing, given that the new
agreement was a continuation of the previous facility. As at 26 January 2025,
£686 million was drawn down (28 July 2024: £626 million). There are 13
participating lenders. The current facility of £840 million matures in June
2028. The company has hedged its interest rate liabilities to its banks by
swapping the floating-rate debt into fixed-rate debt, see note 10.
Unamortised bank loan issue costs
Unamortised bank loan issue costs primarily relate to refinancing, securing
and extending the variable-rate facility.
Private placement
The fixed-rate facility relates to senior secured notes of £98 million. The
notes mature in 2026.
The company has an overdraft facility of £10 million, which is undrawn as at
26 January 2025.
10. Financial instruments
The below table outlines the movements in fair value among the hedging
reserve, comprehensive income and the income statement during the year.
Unaudited Audited
26 January 28 July
2025 2024
Interest rate swaps £000 £000
Carrying value of derivative financial instruments - Non-current and current (967) (4,774)
liability
Carrying value of derivative financial instruments - Non-current asset 314 -
Change in fair value of continuing derivatives 4,120 4,774
Change in fair value of discontinued derivatives - 11,866
Hedge (gain)/loss recognised in comprehensive income in respect of continuing - (38)
hedges
Losses/(gains) recognised in P&L in respect of hedges held at fair value (4,120) 1,894
through the profit or loss
Transaction proceeds received in respect of terminated hedges (net of - 14,783
termination fees)
Amortisation to P&L of cashflow hedge reserve relating to discontinued (6,986) (18,025)
hedge relationship
Hedging reserve balance in respect of discontinued hedges (6,808) (13,794)
Hedging Reserve
Opening (13,794) (31,781)
Hedging (gains)/losses recognised in comprehensive income - (38)
Hedge ineffectiveness reclassified from the reserves to the P&L in respect - -
of terminated swaps
Amortisation to P&L of cashflow hedge reserve relating to discontinued 6,986 18,025
hedge relationships
Deferred tax posted to comprehensive income - -
Closing (6,808) (13,794)
At the beginning of the reporting period, the company had two interest rate
swaps in place. No hedge accounting was
applied to these interest rate swaps. During the 26 weeks ended 26 January
2025, seven further interest rate swaps were taken out, designated as two
relationships.
The hedge reserve of £6.8 million is made up of fair value relating to hedges
which have previously been derecognised/discontinued (28 July 2024: £13.8
million).
11. Leases
The following amounts, relating to lease cash flows, were debited/credited to
the income statement during the period.
Rent Cash flow Analysis Unaudited Audited
26 January 28 July
2025 2024
£000 £000
Cash outflows relating to capitalised leases 28,913 54,921
Expense relating to short term leases 422 593
Expense relating to variable element of concessions 7,847 16,905
Total rent cash outflows for period 37,182 72,419
Cash inflows relating to capitalised leases (743) (1,243)
Income relating to lessor sites (2,077) (2,711)
Total rent cash Inflows for period (2,820) (3,954)
The balance sheet shows the following amounts relating to leases. These have
been reconciled in sections (a) to (d) below:
Unaudited Audited
26 January 28 July
2025 2024
£000 £000
Right-of-use asset(1) (a) 367,864 373,338
Non-current lease asset 9,374 8,860
Current lease assets 1,066 1,358
Total lease assets(2) (b) (d) 10,440 10,218
Current lease liability (47,629) (49,582)
Non-current lease liability (363,183) (368,660)
Total lease liability(1) (c) (d) (410,812) (418,242)
(1)Right-of-use assets and lease liabilities relate to leasehold properties
occupied by J D Wetherspoon.
(2)Lease assets relate to leasehold properties sublet by J D Wetherspoon.
11. Leases (continued)
(a) Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the period:
£000
Net book amount as at 28 July 2024 373,338
Adjustments within the period:
Additions 9,547
Disposals due to new subleases (1,276)
Remeasurement 11,725
Freehold reversions transferred to property, plant and equipment (6,195)
Disposals and derecognised leases -
Impact of lease adjustments 13,801
Amortisation and Impairment
Provided during the period (19,192)
Exchange differences 8
Impairment loss (415)
Reversal of impairment losses 324
Amortisation and Impairment (19,275)
Net book amount at 26 January 2025 367,864
During the period, additions related to five new signed lease contracts and
one new signed sublease contract. 12 were remeasured as a result of changes in
the agreed payments under the lease contracts and changes in the lease terms.
Exchange differences occur as a result of translating the capitalised leases
in the Republic of Ireland. Five freehold reversions took place in the year,
while there was one disposal. As at the time of this interim report, lease
additions totalled £9,547,000 and depreciation £19,192,000.
(b) Sublet lease assets
Unaudited Audited
26 January 28 July
2025 2024
£000 £000
Lease asset as at commencement of period 10,219 9,811
Additions 1,399 1,900
Remeasurements of leases (596) (516)
Interest due in period 161 267
Total cash Inflow for leases in period (743) (1,243)
At 26 January 2025 10,440 10,219
The incremental borrowing rate applied to lease liabilities and assets was
1.94 - 5.75% depending on the lease's length.
Set out below are the carrying amounts of the lease assets recognised and the
movement during the period. The company sublets several of its leases, with
lease assets being the capitalised future rent receivable from sublet sites.
11. Leases (continued)
(c) Lease liability
Unaudited Audited
26 January 28 July
2025 2024
£000 £000
Lease liability as at commencement of period (418,242) (443,280)
Additions (9,404) (8,617)
Freehold reversions transferred to property, plant and equipment 6,764 6,764
Remeasurements of leases (11,437) (22,458)
Disposals and derecognised leases - 2,081
Exchange differences 10 (330)
Lease liabilities before payments (432,309) (458,425)
Interest payable in period:
Interest expense within period (discounting element) (7,415) (14,738)
Total cash outflow for leases in period:
Lease payment commitments for period 28,912 54,921
Net principal payments 21,497 40,183
Lease liability as at closing of period (410,812) (418,242)
Future rent payments could change as a result of open-market rent reviews or
options being exercised to terminate a lease early. Any changes in the minimum
unavoidable lease payments will be included as a remeasurement of the lease
liability. The accounting policies within the 2024 Annual Report further
describe the policy in relation to the termination of leases.
(d) Lease maturity profile
Set out below are the remaining maturities (period between the balance sheet
date and the end of the lease) of the lease liabilities and lease assets,
which are undiscounted:
Lease liabilities Lease assets
26 January 28 July 26 January 28 July
2025 2024 2025 2024
£000 £000 £000 £000
Within one year 47,629 49,582 (1,066) (1,358)
Between one and five years 169,341 171,644 (5,715) (5,130)
After five years 337,793 335,859 (5,245) (5,270)
Lease commitments payable / receivable 554,763 557,085 (12,026) (11,758)
Discounting (143,951) (138,843) 1,586 1,540
Lease liability / lease asset 410,812 418,242 (10,440) (10,218)
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