JD Wetherspoon anticipates ‘break-even' outcome for profits
Pub group JD Wetherspoon is anticipating breaking even this financial year as sales slowed and cost increases hit the business.
For the 13 weeks to 24 April 2022, sales decreased by 4%, in comparison with the same period in the 2019 financial year. Year-to-date like-for-like sales decreased by 6.2%.
The company operates 47 pubs under its Lloyds brand, for which like-for-like sales in the quarter increased 3.4%. The company also operates 57 hotels and like-for-like room sales during the quarter increased by 5%.
In the financial year to date, the company disposed of six pubs, with a further five surrendered to landlords, following lease expiries. In addition, three leasehold pubs were closed in anticipation of lease expiries.
Net debt at the end of the quarter was £906m and liquidity was £173m. Debt was expected to be around £870m at the end of the financial year.
Chairman of JD Wetherspoon, Tim Martin, said: "Since Covid restrictions ended, sales have improved, as previously reported. As many hospitality companies have indicated, there is considerable pressure on costs, especially in respect of labour, food and energy. Repairs are also running at a higher rate than before the pandemic.
"The company anticipates a continuing slow improvement in sales, in the absence of further restrictions, and anticipates a ‘break-even' outcome for profits in the current financial year.
"Since 13 March, the company has returned to profitability and to a positive cash flow, and is cautiously optimistic about the prospect of a return to relative normality in FY23."
The company also announced the retirement of director Su Cacioppo and the appointment of James Ullman as her replacement.
"The company is extremely grateful for Su's exceptional efforts in the last 31 years and wishes her every success in the future," the update said.
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