Latest Wetherspoons results show return to more normal trading patterns

JD Wetherspoon has released its premliminary results for the 26 weeks ended 23 January 2022.

All comparisons are against FY20 - highlights include:
• Revenue £807.4m (2020: £933m), a fall of 13.5%
• Like-for-like sales decreased by 11.8%

Before exceptional items (post-IFRS 16):
• Loss before tax -£26.1m (2020: profit £51.6m)
• Operating profit £1.6m (2020: profit £80.8m)

After exceptional items (pre-IFRS 16):
• Loss before tax -£8.2m (2020: profit £42m)
• Operating profit £0.8m (2020: profit £76.6m)

After exceptional items (post-IFRS 16):
• Loss before tax -£13m (2020: profit £35.7m)
• Operating profit £1.9m (2020: profit £80.8m)

Chairman Tim Martin (pictured) said, “Following a traumatic two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks.

'As indicated above, trade for the last three weeks was 2.6% below the equivalent period in 2019, reflecting an improving trend.

“Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions.'

Martin went on, “Inflationary pressures in the economy have been widely publicised. As indicated above, nearly 70% of the company’s properties are freehold, with interest rates fixed for the next decade. Most of the company’s leasehold pubs have rent reviews which are fixed at levels below the current level of inflation.

'There is pressure on input costs from food, drink and energy suppliers, mitigated to an extent, by a number of long-term contracts. Overall, the company expects the increase in input prices to be slightly less than the level of inflation.'

Martin continued, “The government is reported to have spent over £400 billion on Covid measures, around nine times the annual defence budget. The expenditure has been financed by the creation of “new money” by the Bank of England, which has led to significant inflation and higher taxes.

“Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses. The company is confident of a strong future if restrictions are avoided.'

Martin ended, 'The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy.”