JD Wetherspoon Secures £840m Banking Agreement
JD Wetherspoon has announced a 5.8% rise in like-for-like sales for the ten weeks ending 7 July 2024 compared to the same period last year. Year-to-date, like-for-like sales have surged by 7.7%. In a recent trading update, the company revealed it has secured a new four-year £840 million banking agreement “on attractive terms,” with net debt projected to be around £670 million by the financial year-end.
Throughout the year, JD Wetherspoon has opened two new pubs while selling or surrendering 26 others to landlords. Most of these disposals involved smaller, older pubs, or those with another Wetherspoon pub nearby. The company reported a net cash inflow of £8.7 million from these disposals. Currently, ten trading pubs are either on the market or under offer, leaving the company with an estate of 801 pubs.
Chairman Sir Tim Martin commented on the financial recovery post-pandemic, noting that total sales have reached record levels despite operating fewer pubs. Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped mitigate significant cost increases. Compared to the 2019 financial year, labour costs have risen by about £164 million, energy by £28 million, repairs by £38 million (also impacted by labour costs), and interest (excluding IFRS 16 interest) by £16 million.
Despite these financial pressures, Wetherspoon continues to invest in enhancing its operations, including beer gardens, staff rooms, above-bar glass racks, and improved beer dispense systems. Staff retention is at an all-time high, with 11,066 employees, an average of 14 per pub, having worked for the company for five years or more. Of these, 3,895 have been with the company for ten years, and 632 for twenty years.
The company is also planning new openings, with upcoming pubs in Waterloo and Fulham Broadway stations in London, and in Marlow, Buckinghamshire. Over the past ten years, the average Wetherspoon pub has generated £7 million in various taxes, in addition to creating significant employment and social benefits.
Sir Tim Martin also addressed the issue of tax inequality between pubs and supermarkets, which he believes has led to pub closures and underinvestment. He expressed hope that the current chancellor, given his background with the Bank of England, will address this disparity.
JD Wetherspoon remains confident that its profits for the current financial year will align with market expectations.
