TIDMJDW
RNS Number : 7790K
Wetherspoon (JD) PLC
12 July 2017
12 July 2017
J D WETHERSPOON PLC
PRE-CLOSE TRADING STATEMENT
J D Wetherspoon plc presents below its pre-close trading
statement for the financial year to 30 July 2017. The preliminary
results are due to be announced on 15 September 2017.
Current trading
For the 11 weeks to 9 July 2017 like-for-like sales increased by
5.3% and total sales increased by 3.6%. In the year to date (50
weeks to 9 July 2017) like-for-like sales increased by 3.9% and
total sales increased by 1.9%.
The full-year operating margin before exceptional items and
before a GBP1.6m gain on property is expected to be between 7.6%
and 7.8% for the 53-week period, compared to 6.9% last year.
Property
The Company has opened 9 new pubs since the start of the
financial year and has sold or closed 38. We expect to open one
more pub before the financial year end. There are expected to be
around GBP24m of exceptional, non-cash losses in this financial
year, which are mainly associated with pub disposals and
closures.
As previously announced, the company has increased capital
expenditure in older pubs, which will be about GBP65m in the
current year. Areas of expenditure include staff rooms, kitchen and
garden upgrades, and IT improvements. We anticipate expenditure
continuing at this, or a slightly higher, rate for the next few
years.
As previously announced, the company has bought the freeholds of
a number of properties of which it was previously the tenant. We
have spent GBP89.5 million on 44 of these freeholds in the year to
date, and have spent GBP190.9 million on 102 freeholds since
2011.
Financial position
The Company remains in a sound financial position. Net debt at
the end of this financial year is currently expected to be around
GBP715m.
The company has bought back 3.4m shares, at a total cost of
GBP31m, since the start of the financial year.
Outlook
The chairman of Wetherspoon, Tim Martin, said:
"Sales have been good in the last 11 weeks, probably helped by
unusually good weather.
"As previously stated, the Company anticipates that
like-for-like sales of about 3 to 4% will be required to maintain
profits at this year's levels in our next financial year.
"As is the case for most public companies, shareholders and the
media are interested in our views on the Brexit process. I have
outlined my views in a few paragraphs on some of the issues, which
can be found at the end of this statement. In general, it is my
view that requests to the government, like the one last week from
the FCA, for "clarity" and to "hammer out a post-Brexit
transitional arrangement this year" are unrealistic and increase
pressure to agree unfavourable terms. It also makes the FCA and
similar organisations seem rather weak. Everyone knows that these
sorts of deals aren't within the government's gift - and the City
and businesses are supposed to be able to deal with
uncertainty."
Trading statement ends.
Comments by Tim on Brexit negotiations:
DON'T TIE THE GOVERNMENT'S HANDS
"We'll do well with or without a free trade deal, so stop tying
the hands of our negotiators" says Tim Martin
"Don't believe the media furore - an unprecedented political
consensus has emerged on the main aspects of leaving the EU.
However, it is not one most politicians or the media care to
acknowledge. A consensus, especially between Labour and
Conservatives, is just too embarrassing for our adversarial system
- and is also barely newsworthy.
"The last parliament voted overwhelmingly to trigger Article 50,
and the main manifestos, the basis for the election of about 85% of
MPs, backed the referendum decision.
"Since Theresa May and Jeremy Corbyn each won more votes for
their parties than many thought possible, helped by their upholding
of the referendum result, thoughtful MPs and commentators realise
that the UK star is irrevocably hitched to the Brexit caravan.
"This surreal unity of political purpose, disguised by
handbags-at-dawn polemics, is reinforced by almost complete
unanimity in favour of a free trade deal with the EU.
"The government has stated that it wants "a bold and ambitious
free trade agreement" and shadow Brexit Secretary Keir Starmer
agrees, saying in March that it was critical to hold the government
to account on this pledge. The DUP, the SNP, Sinn Fein and Plaid
Cymru all sing from a similar hymn-sheet.
"The media too seems united in this objective. The Times, the
Guardian, the Financial Times, the Mail and Mirror, for example,
are all free-traders now.
"Yet the cherished goal is at risk from the phoney war being
waged in parliament and the media.
"As any buyer of a house or car knows, if you want something too
badly, you will pay a very high price - especially if your desire
is obvious to the counterparty. The basic principle of obtaining a
good deal is that you need an alternative plan - necessity never
makes a good bargain, as Benjamin Franklin said. So a viable
alternative has be the cornerstone of the government's
position.
"Yet the unelected EU presidents, Jean Claude Juncker and Donald
Tusk, have unfortunately become convinced of our desperation for a
free trade deal, and are determined to extract a high price. Hence
the early suggestions of a contribution to the EU of EUR50bn, or
even EUR100bn, combined with a petulant and antagonistic
negotiating stance.
"The UK's viable alternative, the basis on which we and the EU
trade with America, China, India and most of the world, is World
Trade Organisation rules. EU tariffs, themselves subject to WTO
rules, are relatively small, averaging about 3%, as many
commentators have noted - and the EU, according to the rules,
cannot impose higher tariffs on the UK than are charged to other
non-EU countries.
"Since the majority of the UK's trade is currently conducted on
the basis of these rules, it is absurd to talk of cliff edges and
an apocalypse if EU trade reverts to them in the future.
"The think tank Open Europe, neutral during the referendum
campaign, estimates a likely difference to our 2030 GDP of less
than 1%, plus or minus, from leaving the EU, depending on the deals
that are struck and the policies that are pursued.
"Many dyed-in-the-wool remainers, especially economists, are
currently engaged in a rerun of project fear, forecasting dire
outcomes in the absence of a deal.
"However, the public can see that the recession, combined with
increased unemployment and interest rates, predicted by many of the
same economists for the immediate aftermath of a leave vote, did
not materialise. They are deeply sceptical of apocalyptic warnings
now from the same quarter.
"The majority of the public instinctively understands the
government's bargaining dilemma. Yet the supposedly sophisticated
CBI, the Financial Times, the Times and the other usual suspects
are vociferous in their forecasts of trouble in the absence of a
free trade deal. As a result, they are loading the dice hugely in
favour of EU negotiators.
"The public's message to Carolyn "We're all doomed" Fairbairn,
head of the CBI, and other gloomsters is: put a sock in it. We'll
do well with or without a free trade deal, so stop tying the hands
of our negotiators, who are doing their best to achieve a
respectable outcome."
Ends.
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: www.jdwetherspoon.com
3. This announcement has been prepared solely to provide
additional information to the shareholders of J D Wetherspoon, to
meet the requirements of the FCA's Disclosure and Transparency
Rules. It should not be relied on by any other party, for any other
purposes. Forward-looking statements have been made by the
directors in good faith, using information available up until the
date on which they approved this statement. Forward-looking
statements should be regarded with caution, because of the inherent
uncertainties in economic trends and business risks.
4. This announcement contains inside information on JD Wetherspoon plc.
5. The current financial year comprises 53 trading weeks to 30 July 2017.
6. The next trading update is expected to be the Company's final
results announcement on 15 September 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTKMGMNNMGGNZM
(END) Dow Jones Newswires
July 12, 2017 02:00 ET (06:00 GMT)
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