TIDMJDW
RNS Number : 9541S
Wetherspoon (JD) PLC
15 March 2019
15 March 2019
J D WETHERSPOON PLC
PRELIMINARY RESULTS
(For the 26 weeks ended 27 January 2019)
FINANCIAL HIGHLIGHTS
Before exceptional items
Revenue GBP889.6m (2018: GBP830.4m) +7.1%
Like-for-like sales +6.3%
Profit before tax GBP50.3m (2018: GBP62.0m) -18.9%
Operating profit GBP63.5m (2018: GBP74.0m) -14.2%
Earnings per share (including shares held in trust) 37.4p -18.2%
(2018: 45.7p)
Free cash flow per share 67.9p (2018: 34.8p) +95.1%
Interim dividend 4.0p (2018: 4.0p) Maintained
After exceptional items*
Profit before tax GBP48.6m (2018: GBP54.3m) -10.5%
Operating profit GBP63.5m (2018: GBP74.0m) -14.2%
Earnings per share (including shares held in trust) -8.2%
36.0p (2018: 39.2p)
*Exceptional items as disclosed in note 7 to the Interim Report
2019.
Commenting on the results, Tim Martin, the Chairman of J D
Wetherspoon plc, said:
"The vexed debate about Brexit has continued since the
referendum, nearly three years ago. Although the public voted to
leave, the majority of 'the establishment', including most MPs,
most universities, the Bank of England, the CBI and media
organisations such as The Times, the Financial Times and The
Economist favoured 'Remain'.
"The result has been a barrage of negative economic forecasts
from those quarters, predicting that the UK will go to hell in a
handcart without a 'deal' with the EU - which will effectively tie
the country into EU membership and taxation, yet without
representation.
"The doomsters ignore the most powerful nexus in economics,
between democracy and prosperity - and the fact that the EU is
becoming progressively less democratic, as it pursues an
'ever-closer union', for which there is no public consensus.
"Previous referendum results on major constitutional issues have
always been respected in the UK, but if parliament votes either for
Theresa May's 'deal' (which keeps us in the EU by the back door) or
to remain in the EU, the referendum result will not have been
respected. This may well have significantly adverse economic
consequences, as the country turns in on itself to endure months,
or years, of stifling constitutional argument.
"In appendix 1 below can be found an excellent article on these
issues from The Spectator magazine, by former Australian prime
minister Tony Abbott. In appendix 2, there is a less good article
by me, from the latest edition of Wetherspoon News.
"In the six weeks to 10 March 2019, like-for-like sales
increased by 9.6%, helped by excellent weather this year and snow
last year, and total sales increased by 10.9%.
"As previously indicated, costs in the second half of the year
will be higher than those of the same period last year. The company
anticipates an unchanged trading outcome for the current financial
year."
Enquiries:
John Hutson Chief Executive Officer 01923 477777
Ben Whitley Finance Director 01923 477777
Eddie Gershon Company spokesman 07956 392234
Photographs are available at: newscast.co.uk
Notes to editors
1. J D Wetherspoon owns and operates pubs throughout the UK and
Ireland. 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. 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 2018 has been
published on the Company's website on 14 September 2018.
5. The current financial year comprises 52 trading weeks to 28 July 2019.
6. The next trading update will be issued on 8 May 2019.
CHAIRMAN'S STATEMENT AND OPERATING REVIEW
In the 26 weeks ended 27 January 2019, like-for-like sales
increased by 6.3%,
with total sales increasing by 7.1% to GBP889.6m (2018:
GBP830.4m).
Like-for-like bar sales increased by 5.9% (2018: 5.7%), food by
7.1% (2018: 6.9%) and fruit/slot machines by 5.7% (2018: 4.6%).
Like-for-like hotel room sales increased by 0.3% (2018: 3.1%). Bar
sales were 60.5% of total sales, food 35.9%, fruit/slot machines
2.5% and rooms 1.1%.
Operating profit decreased by 14.2% to GBP63.5m (2018:
GBP74.0m). The operating margin was 7.1% (2018: 8.9%). Profit
before tax and exceptional items decreased by 18.9% to GBP50.3m
(2018: GBP62.0m). Lower profit in the period was due to cost
increases in areas including labour (+GBP33.0m), repairs
(+GBP3.7m), utilities (+GBP2.5m), interest (+GBP3.3m) and
depreciation (+GBP2.4m).
Earnings per share, including shares held in trust by the
employee share scheme, and before exceptional items, decreased by
18.2% to 37.4p (2018: 45.7p).
As illustrated in the table in the tax section below, the
company paid taxes of GBP375.6m in the period under review (2018:
GBP356.1m), which is 27.4% higher than five years ago.
Net interest was covered 4.0 times by profit before interest,
tax and exceptional items (2018: 5.5 times), as a result of higher
interest charges and lower profits. Total capital investment was
GBP95.5m in the period (2018: GBP61.4m). GBP55.7m was spent on
freehold reversions of properties where Wetherspoon was the tenant
(2018: GBP7.5m), GBP24.9m on existing pubs (2018: GBP35.1m) and
GBP14.8m on new pub openings and extensions (2018: GBP18.8m).
Exceptional items totalled GBP1.6m (2018: GBP6.8m). Two pubs
were sold or closed in the period, as part of the disposal
programme. There was a GBP0.3m (2018: GBP5.9m) loss on disposal and
an impairment charge of GBP0.8m (2018: GBP1.1m). The cash effect of
the exceptional charges was an outflow of GBP0.7m.
Free cash flow, after capital investment of GBP26.1m in existing
pubs (2018: GBP35.0m), GBP9.0m for share purchases for employees
(2018: GBP7.9m) and payments of tax and interest, was GBP71.7m
(2018: GBP36.8m). Free cash flow per share increased by 95.1% to
67.9p (2018: 34.8p). The increase was due mainly to the timing of
supplier payments, expected to reverse by the year end, and to
lower investment in existing pubs.
Dividends
The board declared an interim dividend of 4.0p per share for the
current interim financial period ending 27 January 2019 (2018: 4.0p
per share). The interim dividend will be paid on 30 May 2019 to
those shareholders on the register at 3 May 2019.
Corporation tax
We expect the overall corporation tax charge for the financial
year, including current and deferred taxation, to be approximately
21.4% before exceptional items (2018: 22.0%). This reduction is due
primarily to decreases in the amounts of non-qualifying
depreciation and expenditure not allowable for tax purposes.
As in previous years, the company's tax rate is higher than the
standard UK tax rate, owing mainly to depreciation which is not
eligible for tax relief.
Share buybacks
During the half year, no shares were repurchased by the company
for cancellation (2018: GBP51.6m).
Financing
As at 27 January 2019, the company's net debt, including bank
borrowings and finance leases, but excluding derivatives, was
GBP724.0m, a decrease of GBP2.2m, compared with that of the
previous year end (2018: GBP726.2m).
The net-debt-to-EBITDA ratio was 3.47 times at the period end
(29 July 2018: 3.39 times).
On 22 January, the company entered into a new five-year banking
agreement which extends its total facilities, excluding finance
leases, from GBP860m to GBP895m.
As previously stated, it is intended that the company's
net-debt-to-EBITDA ratio will be around 3.5 times for the
foreseeable future. The ratio might rise for a temporary period, if
there were, for example, a sudden deterioration in trading, in
which instance the company would seek to reduce the level in a
timely manner. Insofar as it is possible to generalise, the board
believes that debt levels of between 0 and 2 times EBITDA are a
sensible long - term benchmark. A higher level of debt may be
justifiable - at times when interest rates are low and other
factors
are favourable.
Property
During the period, we opened two new pubs and closed six,
bringing the number open at the period end to 879. Following a
review of our estate, in recent years, we placed around 100 pubs on
the market, most of which have now been sold.
10 years ago our freehold/leasehold split was 41.7/58.3%. At the
half year end it was 60.2/39.8%.
UK taxes and regulation
Pubs and restaurants pay proportionally far higher levels of UK
tax than do supermarkets. The main disparity relates to VAT (value
added tax), since supermarkets pay no VAT in respect of their food
sales, whereas pubs pay 20%, enabling supermarkets to subsidise
their alcoholic drinks prices. Pubs also pay approximately 18p per
pint in respect of business rates, while supermarkets pay less than
2p per pint.
In addition, the government has, in recent years, introduced
both a 'late-night levy' and additional fruit/slot machine taxes,
further reducing the competitive position of pubs in relation to
supermarkets.
The tax disparity with supermarkets is unfair. Pubs create
significantly more jobs and more taxes per pint or per meal than do
supermarkets and it does not make social or economic sense for the
UK tax régime to favour supermarkets. We acknowledge the need for
companies to pay a reasonable level of tax, but hope that
legislators will make prompt progress in creating a level playing
field for all businesses which sell similar products.
The taxes paid by Wetherspoon in the period under review were as
follows:
First half 2019 2018
(estimate - UK only) GBPm GBPm
VAT 175.5 162.5
Alcohol duty 86.2 85.4
PAYE and NIC 59.0 54.1
Business rates 28.7 27.5
Corporation tax 8.5 12.2
Fruit/slot machine
duty 5.5 5.2
Climate change levy 5.2 4.5
Stamp duty 2.6 0.3
Sugar tax 1.5 -
Carbon tax 1.4 1.7
Fuel duty 1.1 1.0
Premises licences and
TV licences 0.4 0.4
Landfill tax - 1.3
TOTAL TAX 375.6 356.1
Tax per pub (GBP000) 427.3 402.0
Tax as % of sales 42.2% 42.9%
Pre-exceptional profit
after tax 39.5 48.2
Profit after tax as
% of sales 4.4% 5.8%
Further progress
As previously highlighted, the company's philosophy is to try
continuously to upgrade as many areas of the business as
possible.
The Food Standards Agency, in association with local
authorities, regularly inspects licensed and other food businesses
in the UK and awards marks from zero to five, according to the
standards it finds.
Currently, 97.6% of our pubs have obtained the maximum five
rating (2018: 92.0%), under the FSA scheme, with 99.5% of pubs
receiving a rating of four or above (2018: 98.0%). This record
reflects extremely hard work by our central catering, audit and
operations team, as well as by the excellent teams in our pubs.
We have again been recognised, for the 16th year in a row, as a
'Top Employer UK' by the Top Employers Institute, in association
with the Guardian newspaper.
A pub company is only as good as its employees - and Wetherspoon
recognises this through its bonus and training schemes. Of our pub
employees, 91% received a bonus in the period under review, which
totalled GBP21m, equal to 53% of our net profits, and hundreds of
employees underwent training at our various 'academies' for pub,
kitchen and shift managers, as well as for other grades of
employee.
In addition, the company runs a government-approved
apprenticeship scheme and participates in a professional
management diploma and degree course, in conjunction with Leeds Beckett University.
Corporate governance
As Warren Buffet has said, it is easy to criticise corporate
governance rules, but more difficult to say what should replace
them.
However, it is obvious that the current rules are ineffective,
in many respects, since the catastrophes and abuses which they were
designed to prevent have continued in recent decades.
For example, some of the major banks in the UK effectively
became insolvent in the global financial crisis, in spite of the
compliance of their boardrooms with the major tenets of corporate
governance guidance.
In the pub world, the compliance, in the past, of the major
pubcos may have increased their susceptibility to the groupthink
for which the City is notorious - leading to excessive borrowings
under the guise of 'efficient balance sheets'.
Paradoxically, non-compliant family brewers, historically
sceptical of governance rules, were more sensible, eschewing the
debt fashion which laid low their bigger rivals.
In summary, Wetherspoon's critique of corporate governance rules
has been:
n The nine-year rule for non-executives is absurd, since it
'institutionalises' inexperience. It is doubtful whether there is a
non-executive director on a major bank board today, for example,
who was there during the last financial crisis.
n The obsession with targets for bonuses is often
counterproductive. EPS targets tend to incentivise the short term
at the expense of the long term. For example, the world of pubs is
plagued by underspending on areas such as labour and repairs, often
disguised as 'good cost control', which eventually undermines the
fabric of any business.
n The 'comply or explain' ethos is not observed, in reality, by
many organisations which advise institutions on corporate
governance. Wetherspoon has regularly explained its reasons for
non-compliance - which have not been contradicted. However,
compliance organisations have consistently ignored the explanations
and advised clients to vote against my own job as chairman, or to
abstain. A similar approach has been taken to non-executives who
have been directors for more than nine years.
n The prohibition which relates to chief executives becoming
chairman is often counterproductive.
If a chief executive has run a business very well for many
years, it can be advantageous to retain that experience. Warren
Buffet's retention of Tony Nicely as the chair of GEICO, America's
second-largest insurer, is an interesting case in point (see
appendix 3).
In summary, the above points have been made to many shareholders
over the years. We will make the case again to our major
shareholders in the near future.
Current trading and outlook
The vexed debate about Brexit has continued since the
referendum, nearly three years ago. Although the public voted to
leave, the majority of 'the establishment', including most MPs,
most universities, the Bank of England, the CBI and media
organisations such as The Times, the Financial Times and The
Economist favoured 'Remain'.
The result has been a barrage of negative economic forecasts
from those quarters, predicting that the
UK will go to hell in a handcart without a 'deal' with the EU -
which will effectively tie the country into EU membership and
taxation, yet without representation.
The doomsters ignore the most powerful nexus in economics,
between democracy and prosperity - and the fact that the EU is
becoming progressively less democratic, as it pursues an
'ever-closer union', for which there is no public consensus.
Previous referendum results on major constitutional issues have
always been respected in the UK, but if parliament votes either for
Theresa May's 'deal' (which keeps us in the EU by the back door) or
to remain in the EU, the referendum result will not have been
respected. This may well have significantly adverse economic
consequences, as the country turns in on itself to endure months,
or years, of stifling constitutional argument.
In appendix 1 below can be found an excellent article on these
issues from The Spectator magazine, by former Australian prime
minister Tony Abbott. In appendix 2, there is a less good article
by me, from the latest edition of
Wetherspoon News.
In the six weeks to 10 March 2019, like-for-like sales increased
by 9.6%, helped by excellent weather this year and snow last year,
and total sales increased by 10.9%.
As previously indicated, costs in the second half of the year
will be higher than those of the same period last year. The company
anticipates an unchanged trading outcome for the current financial
year.
Tim Martin
Chairman
14 March 2019
Appendix 1 - Tony Abbott, 2 March 2019, The Spectator
"No deal? No problem
Britain must - and can - hold its nerve
Britain, we're led to be believe, is heading for the worst
catastrophe in its history. Officialdom is warning that a no-deal
Brexit would mean trucks backed up for miles at Dover, chaos at
airports, a special poverty fund to cope with the fallout and -
horror! - a shortage of Guinness. So apparently the country that
saw off Hitler, the Kaiser, Napoleon and the Spanish Armada is now
paralysed with fear at the very thought of leaving the EU.
Here in Australia, this story just doesn't fit with the Britain
that we know. A disorderly Brexit would mean, at most, a few months
of inconvenience. Perhaps some modest transition costs. But these
difficulties would quickly pass. By far the more serious threat
comes from Britain caving in and agreeing to a bad deal that
imposes most of the burdens of EU membership but with few of the
benefits. Or, almost as bad, a Brexit delay that would keep the UK
as a tethered goat - while the EU shows how it will humiliate any
country with the temerity to leave. For Britain to lose its nerve
now would represent failure on an epic scale.
Theresa May was quite correct two years ago when she said that
no deal was better than a bad deal. What she should have known,
even then, was that a bad deal was all that Britain was ever going
to get from an EU with a vested interest in ensuring that no
country ever leaves. The error all along has been not explaining
the terms on which Britain wanted to leave. And not preparing to
implement those terms unilaterally, given the near certainty that
no satisfactory deal would be negotiated in advance.
As a former prime minister of a country that has a perfectly
satisfactory 'no deal' relationship with the EU, let me assure you:
no deal would be no problem. Or at least no problem that Britain
couldn't quickly take in its stride. Especially if Britain is ready
to keep tariff- and quota-free entry of European goods, and
recognise their standards. That's what you need for easy trade and
Britain has the power to do this unilaterally. You don't need
Michel Barnier's permission.
Might there be queues at Calais? Perhaps, if a vengeful EU
imposed one-sided tariff and regulatory burdens on Britain. But
there need be no queues at Dover. If there were, it would be the EU
and not the United Kingdom that would be responsible for any hard
border, including one with Ireland. (Which, of course, would never
be erected: it's a bluff.) If Britain did its best - and even if
the EU did its worst - the problems would be on the EU side of the
border. In the longer run, the EU would clearly be the loser from
spitefully jacking up the cost of the British goods and British
services that its citizens currently enjoy. Just in time for the EU
elections.
A no-deal relationship with the EU has not stopped Australia
doing about US$70 billion worth of trade with the EU in goods and
services. This is about 15 per cent of our total trade, and it
makes the EU our second biggest overall trade partner. Of this,
about $20 billion is with Britain - on your own, you are our fifth
biggest trade partner. And this is without any special trade deal,
just bonds of history and affection. It must baffle the pundits,
but Australia trades with the EU (and with Britain) without being
part of any customs union.
Yes, our exports to the EU do face tariffs. But the World Trade
Organisation rules impose strict caps on these tariffs: the same
rules that would protect Britain. Under these terms, Australian
trade with the EU has grown by about 1.4 per cent a year over the
past decade.
Hard borders are an inconvenience, but they're hardly
insurmountable. Think of Oakridge Chardonnay or Hill of Grace
Shiraz, shipped to you half way around the globe for a better price
(and taste) than rivals from France. How? Why? It's the miracle of
trade. People overcome barriers.
If Britain unilaterally declared that post-Brexit trade with the
EU would be tariff-free and quota-free - and that there would be
full mutual recognition of standards and credentials - there's
every chance that the EU would swiftly do likewise. Because that's
exactly what happens now; it would involve no damage or disruption
to anyone. Throw in provisions for routine movement of people for
well-paid work, not welfare, and you'd have a good clean Brexit.
Britain would still be economically integrated with the countries
of Europe, but also entirely free to chart its own course in its
dealings with the wider world.
All along, the real difficulty has not been negotiating Brexit.
It has been the neurotic anxiety of the official political class
about leaving the European project, which they see somehow as a
civilising force. The Brexit vote was possibly the greatest ever
vote of confidence in the project of the United Kingdom. It was a
reminder of the global leadership that Britain has historically
provided. The risk you face now isn't no-deal Brexit, but rather
the official class losing its nerve and proving incapable of
quickly resolving this muddle. If that happens, it would be hard to
take Britain seriously again."
Appendix 2 - Tim Martin, spring 2019, Wetherspoon News
"The Oxbridge orthodoxy, led by Theresa May, is undermining
democracy in the UK - even though a small minority of its peers are
democracy's best advocates.
During the debate about whether the UK should join the euro,
about 20 years ago, I said that most advocates of the experimental
currency were older Oxbridge males, for whom Europeanism,
disdainful of democracy, was a type of religion: Heseltine, Howe,
Mandelson, Clarke, Blair and many others - plus their counterparts
in the CBI, the Financial Times, the media generally and in
boardrooms.
The religious aspect was evident from their promotion of the
euro - despite the failure of its predecessor, the disastrous
exchange rate mechanism (ERM).
The ERM had tried to join European currencies together in a
tight band, by adjusting interest rates.
To keep up with the German Deutsche Mark, UK interest rates rose
all the way to 15% by September 1992, at which point the ERM fell
apart, but, in the meantime, the cost of mortgages and business
loans had doubled, causing economic mayhem, recession, negative
equity, unemployment and widespread bankruptcies.
Democratic
Surely, no one could be daft enough to want to join the euro,
the successor to the failed ERM, losing democratic control of
interest rates and government budgets in the process?
Oh yes they could! It was at that point that many people
understood that Europeanism involved a type of religious
conviction, rather than pragmatic politics or economics.
Luckily for the UK, the public, following a long and bitter
debate, rejected the euro out of hand - and the UK economy has
subsequently greatly outperformed the eurozone, which has been
beset by high unemployment, low growth rates and, consequently,
radicalised politics.
I thought of the history of the ERM and the euro when I appeared
on BBC Politics Live, in December 2018, with Vicky Ford, the
Conservative MP for Chelmsford, Rushanara Ali, the Labour MP for
Bethnal Green and Bow and Sonia Sodha, chief leader writer at the
Observer.
In response to a question from Jo Coburn, the interviewer, I
said that the EU was a protectionist system which charged import
taxes (tariffs) on over 12,000 goods, including rice, oranges,
coffee, New World wine and children's clothes.
I added that MPs have the power to end these tariffs, reducing
prices for constituents, without loss to the government, since
tariff income is today remitted to Brussels - provided that
parliament's rights are not signed away in a 'deal'.
The interviewer said: "Everyone [in the studio] is saying that's
not true. Sonia Sodha, a disciple of Brussels religiosity, said:
"It's just wrong to say the EU is protectionist... the EU is not
protectionist. It's ridiculous to argue that [it is]."
The MPs, Ms Ford and Ms Ali strongly supported this view.
Yet the undisguised protectionist nature of the EU is crystal
clear and it is not possible to articulate a coherent view as to
our future trading relationship with the EU, unless the existing
system, which keeps shop prices artificially high, is
understood.
How could a senior journalist, and MPs representing their
parties on national television, not understand basic facts about
the customs union?
The answer, I'm afraid, is the same as it was 20 years ago.
For many people, and all three panellists are graduates of
Oxford University, Europeanism is a secular religion which blinds
adherents to reality.
Protective
Just as the failure of the ERM was not seen by Blair and others
as a reason to avoid its successor, the euro, for these panellists
today, the existence of a vast number of protective tariffs doesn't
mean the EU is protectionist.
The worry is that pro-Remain ideologues are in charge of our
proposed exit from the EU - and they don't believe in it and fully
intend to thwart it.
Just look at Theresa May's closest team. Chief of Staff Gavin
Barwell, Chief Brexit Negotiator Olly Robbins, 'deputy prime
minister' David Lidington, Attorney General Geoffrey Cox,
Chancellor Philip Hammond and so on - all Remainers... and all
Oxbridge.
Trade
Personally, I was baffled in October last when the President of
the European Council, Donald Tusk, said that he had, from the
beginning, offered a free-trade deal - a 'Canada plus plus plus' -
to the UK.
Surely, this was a solution in the best interests of all
parties?
So, why had Theresa May turned it down and tried, instead, to
railroad through her wretched Chequers deal, which would keep us
indefinitely in the customs union - and, therefore, in effect, in
the EU?
The answer, my friends, was blowing in the wind, but only became
clear to me when I read a great article by Charles Moore of The
Daily Telegraph (2 February 2019).
As Moore says, Mrs May and her main advisers simply don't want
to leave the EU.
And her chosen tactic is to keep us indefinitely in the customs
union and as near as dammit in the EU, by using the Irish backstop
as superglue.
This may have been obvious to some, but when Mrs May promised to
implement the referendum result, many of us mistakenly took her at
her word.
Some may say that I'm exaggerating the Oxbridge influence, since
many of the most articulate advocates for independence from the EU
attended those universities.
That is true, up to a point, but Oxbridge Brexiteers are a
nonconformist minority, as rare among their peers as rocking horse
manure.
Threat
In my opinion, Europeanism has become a Moonie-like cult at
those universities, oblivious to increasing democratic shortfalls
in the EU and consequently the greatest threat to our democracy
today.
So, the battle, as the revered Dan Maskell used to say, is well
and truly joined (two all, Wimbledon final,
McEnroe v Borg).
On one side, we have Theresa May, her Oxbridge acolytes and
two-thirds of parliament; on the other, one-third of parliament and
the people.
Who will win? In the end, it has to be the people.
For the EU is heading in the wrong direction, since, without
greater democracy, in the world, as well as in the UK, the future
of humanity is surely in doubt."
Tim Martin
Appendix 3 - Warren Buffet, 23 February 2019
Extract from Berkshire Hathaway Inc. shareholder letter
"GEICO and Tony Nicely
That title says it all: The company and the man are
inseparable.
Tony joined GEICO in 1961 at the age of 18; I met him in the
mid-1970s. At that time, GEICO, after a four-decade record of both
rapid growth and outstanding underwriting results, suddenly found
itself near bankruptcy.
A recently-installed management had grossly underestimated
GEICO's loss costs and consequently underpriced its product. It
would take many months until those loss-generating policies on
GEICO's books - there were no less than 2.3 million of them - would
expire and could then be repriced. The company's net worth in the
meantime was rapidly approaching zero.
In 1976, Jack Byrne was brought in as CEO to rescue GEICO. Soon
after his arrival, I met him, concluded that he was the perfect man
for the job, and began to aggressively buy GEICO shares. Within a
few months, Berkshire bought about 1/3 of the company, a portion
that later grew to roughly 1/2 without our spending a dime. That
stunning accretion occurred because GEICO, after recovering its
health, consistently repurchased its shares. All told, this half-
interest in GEICO cost Berkshire $47 million, about what you might
pay today for a trophy apartment in New York.
Let's now fast-forward 17 years to 1993, when Tony Nicely was
promoted to CEO. At that point, GEICO's reputation and
profitability had been restored - but not its growth. Indeed, at
yearend 1992 the company had only 1.9 million auto policies on its
books, far less than its pre-crisis high. In sales volume among
U.S. auto insurers, GEICO then ranked an undistinguished
seventh.
Late in 1995, after Tony had re-energized GEICO, Berkshire made
an offer to buy the remaining 50% of the company for $2.3 billion,
about 50 times what we had paid for the first half (and people say
I never pay up!). Our offer was successful and brought Berkshire a
wonderful, but underdeveloped, company and an equally wonderful
CEO, who would move GEICO forward beyond my dreams.
GEICO is now America's Number Two auto insurer, with sales
1,200% greater than it recorded in 1995. Underwriting profits have
totaled $15.5 billion (pre-tax) since our purchase, and float
available for investment has grown from $2.5 billion to $22.1
billion.
By my estimate, Tony's management of GEICO has increased
Berkshire's intrinsic value by more than $50 billion. On top of
that, he is a model for everything a manager should be, helping his
40,000 associates to identify and polish abilities they didn't
realize they possessed.
Last year, Tony decided to retire as CEO, and on June 30th he
turned that position over to Bill Roberts, his long-time partner.
I've known and watched Bill operate for several decades, and once
again Tony made the right move. Tony remains Chairman and will be
helpful to GEICO for the rest of his life. He's incapable of doing
less.
All Berkshire shareholders owe Tony their thanks. I head the
list."
INCOME STATEMENT FOR THE 26 WEEKSED 27 January 2019
J D Wetherspoon plc, company number:
1709784
Notes Unaudited Unaudited Unaudited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
27 January 27 January 28 January 28 January 29 July 29 July
2019 2019 2018 2018 2018 2018
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Revenue 4 889,606 889,606 830,392 830,392 1,693,818 1,693,818
Operating costs (826,135) (826,135) (756,405) (756,405) (1,561,527) (1,561,527)
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Operating profit 63,471 63,471 73,987 73,987 132,291 132,291
Property gains 6 3,772 3,772 1,653 1,653 2,900 2,900
Property losses -
exceptional 7 (1,651) (7,656) (18,251)
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Profit before interest
and tax 67,243 65,592 75,640 67,984 135,191 116,940
Finance income 26 26 27 27 48 48
Finance costs (16,993) (16,993) (13,666) (13,666) (27,990) (27,990)
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Profit before tax 50,276 48,625 62,001 54,345 107,249 88,998
Income tax expense 8 (10,776) (10,776) (13,785) (13,785) (23,567) (23,567)
Income tax expense
- exceptional 8 99 881 1,278
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Profit for the period 39,500 37,948 48,216 41,441 83,682 66,709
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
Earnings per ordinary share
(p)
- Basic[1] 9 38.3 36.8 46.7 40.1 81.1 64.6
- Diluted[2] 9 37.4 36.0 45.7 39.2 79.2 63.2
--------------------------- ----- ------------ ------------ ------------ ------------ ------------ ------------
STATEMENT OF COMPREHENSIVE INCOME FOR THE 26 WEEKSED 27 January
2019
Notes Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
--------------------------------------------------- ----- ---------- ---------- --------
Items which will be reclassified subsequently
to profit or loss:
Interest-rate swaps: gain taken to other
comprehensive income 16 64 12,101 14,787
Tax on items taken directly to other comprehensive
income (11) (2,056) (2,513)
Currency translation differences (1,122) (762) (320)
--------------------------------------------------- ----- ---------- ---------- --------
Net (loss)/gain recognised directly in
other comprehensive income (1,069) 9,283 11,954
Profit for the period 37,948 41,441 66,709
--------------------------------------------------- ----- ---------- ---------- --------
Total comprehensive income for the period 36,879 50,724 78,663
--------------------------------------------------- ----- ---------- ---------- --------
[1] Calculated excluding shares held in trust.
[2] Calculated using issued share capital which includes shares
held in trust.
CASH FLOW STATEMENT FOR THE 26 WEEKSED 27 January 2019
J D Wetherspoon plc, company
number: 1709784
Notes Unaudited Unaudited Unaudited Unaudited Audited Audited
cash free cash free cash free
flow cash flow cash flow cash
Flow[1] flow[1] flow[1]
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
27 27 28 January 28 January 29 July 29 July
January January
2019 2019 2018 2018 2018 2018
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------ ---------
Cash flows from operating
activities
Cash generated from operations 10 133,232 133,232 104,066 104,066 228,300 228,300
Interest received 20 20 15 15 36 36
Interest paid (17,556) (17,556) (12,236) (12,236) (25,824) (25,824)
Corporation tax paid (8,539) (8,539) (12,163) (12,163) (26,113) (26,113)
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------
Net cash inflow from operating
activities 107,157 107,157 79,682 79,682 176,399 176,399
---------------------------------------- ---------- ---------- ----------- ----------- ------------ ---------
Cash flows from investing
activities
Purchase of property, plant
and equipment (22,672) (22,672) (32,513) (32,513) (63,753) (63,753)
Purchase of intangible
assets (3,413) (3,413) (2,468) (2,468) (5,166) (5,166)
Investment in new pubs and
pub extensions (15,214) (27,620) (46,386)
Freehold reversions (51,902) (11,288) (16,278)
Lease premiums paid (93) - -
Proceeds of sale of property,
plant and equipment 5,818 2,726 4,742
---------------------------------------- ---------- ---------- ----------- ----------- ------------ ---------
Net cash outflow from investing
activities (87,476) (26,085) (71,163) (34,981) (126,841) (68,919)
---------------------------------------- ---------- ---------- ----------- ----------- ------------ ---------
Cash flows from financing
activities
Equity dividends paid 17 (8,435) (8,437) (12,655)
Purchase of own shares for
cancellation - (51,647) (51,647)
Purchase of own shares for
share-based payments (8,960) (8,960) (7,938) (7,938) (13,605) (13,605)
Loan advances 15 (26,863) 72,595 41,314
Loan issue cost (462) (462) - - (518) (518)
Finance lease principal
payments (698)
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------ ---------
Net cash (outflow) from financing
activities (45,418) (9,422) 4,573 (7,938) (37,111) (14,123)
---------------------------------------- ---------- ---------- ----------- ----------- ------------ ---------
Net change in cash and
cash equivalents 15 (25,737) 13,092 12,447
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------ ---------
Opening cash and cash
equivalents 63,091 50,644 50,644
Closing cash and cash
equivalents 37,354 63,736 63,091
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------ ---------
Free cash flow 9 71,650 36,763 93,357
-------------------------------- ------ ---------- ---------- ----------- ----------- ------------ ---------
Free cash flow per ordinary
share 9 67.9p 34.8p 88.4p
[1] Free cash flow is a measure not required by accounting
standards; a definition is provided in our accounting policies.
BALANCE SHEET AS AT 27 January 2019
J D Wetherspoon plc, company number: 1709784
Unaudited Unaudited Audited
Notes Restated[1]
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
--------------------------------------------- ----- ---------- ----------- -------------------
Assets
Non-current assets
Property, plant and equipment 11 1,356,259 1,300,358 1,306,073
Intangible assets 12 23,313 28,219 24,779
Investment property 13 7,467 7,522 7,494
Other non-current assets 14 7,849 8,102 7,925
Derivative financial instruments 15 11,420 16,204 14,976
Deferred tax assets 4,088 4,556 4,099
--------------------------------------------- ----- ---------- ----------- -------------------
Total non-current assets 1,410,396 1,364,961 1,365,346
--------------------------------------------- ----- ---------- ----------- -------------------
Assets held for sale 3,383 276 1,455
Current assets
Inventories 22,769 20,531 23,300
Receivables 24,335 24,827 23,122
Cash and cash equivalents 15 37,354 63,736 63,091
--------------------------------------------- ----- ---------- ----------- -------------------
Total current assets 84,458 109,094 109,513
--------------------------------------------- ----- ---------- ----------- -------------------
Total assets 1,498,237 1,474,331 1,476,314
--------------------------------------------- ----- ---------- ----------- -------------------
Liabilities
Current liabilities
Borrowings 15 (3,207) (113) (8,864)
Derivative financial instruments 15 - (3,728) (160)
Trade and other payables (320,501) (278,283) (290,602)
Current income tax liabilities (11,164) (13,096) (8,950)
Provisions (5,499) (4,408) (8,052)
--------------------------------------------- ----- ---------- ----------- -------------------
Total current liabilities (340,371) (299,628) (316,628)
--------------------------------------------- ----- ---------- ----------- -------------------
Non-current liabilities
Borrowings 15 (758,112) (819,991) (780,420)
Derivative financial instruments 15 (35,465) (39,271) (38,925)
Deferred tax liabilities (38,506) (39,394) (38,980)
Provisions (2,453) (1,890) (2,453)
Other liabilities (11,235) (11,583) (12,346)
--------------------------------------------- ----- ---------- ----------- -------------------
Total non-current liabilities (845,771) (912,129) (873,124)
--------------------------------------------- ----- ---------- ----------- -------------------
Net assets 312,095 262,574 286,562
--------------------------------------------- ----- ---------- ----------- -------------------
Shareholders' equity
Share capital 18 2,110 2,110 2,110
Share premium account 143,294 143,294 143,294
Capital redemption reserve 2,321 2,321 2,321
Hedging reserve (19,957) (22,239) (20,010)
Currency translation reserve 3,697 4,133 4,767
Retained earnings 180,630 132,955 154,080
--------------------------------------------- ----- ---------- ----------- -------------------
Total shareholders' equity 312,095 262,574 286,562
--------------------------------------------- ----- ---------- ----------- -------------------
John Hutson Ben Whitley
Director Director
[1] Deferred tax liabilities and retained earnings have been
restated. See note 7 in our 2018 financial statements for further
details.
STATEMENT OF CHANGES IN EQUITY
J D Wetherspoon plc, company number:
1709784
Share Share Capital Hedging Currency Retained Total
capital premium redemption reserve translation earnings
account reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- ------- ------- ---------- -------- ----------- -------- --------
At 30 July 2017[1] 2,180 143,294 2,251 (32,284) 4,899 138,092 258,432
Total comprehensive income 10,045 (766) 41,445 50,724
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Profit for the period 41,441 41,441
Interest-rate swaps: cash flow
hedges 12,101 12,101
Tax on items taken directly to comprehensive
income (2,056) (2,056)
Currency translation differences (766) 4 (762)
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Purchase of own shares for
cancellation (70) 70 (36,205) (36,205)
Share-based payment charges 5,464 5,464
Tax on share-based payment 534 534
Purchase of own shares for share-based
payments (7,938) (7,938)
Dividends (8,437) (8,437)
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
At 28 January 2018[1] 2,110 143,294 2,321 (22,239) 4,133 132,955 262,574
Total comprehensive income 2,229 634 25,076 27,939
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Profit for the period 25,268 25,268
Interest-rate swaps: cash flow
hedges 2,686 2,686
Tax on items taken directly to comprehensive
income (457) (457)
Currency translation differences 634 (192) 442
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Share-based payment charges 5,941 5,941
Tax on share-based payment (7) (7)
Purchase of own shares for share-based
payments (5,667) (5,667)
Dividends (4,218) (4,218)
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
At 29 July 2018 2,110 143,294 2,321 (20,010) 4,767 154,080 286,562
Total comprehensive income 53 (1,070) 37,896 36,879
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Profit for the period 37,948 37,948
Interest-rate swaps: cash flow
hedges 64 64
Tax on items taken directly to comprehensive
income (11) (11)
Currency translation differences (1,070) (52) (1,122)
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
Share-based payment charges 5,651 5,651
Tax on share-based payment 398 398
Purchase of own shares for share-based
payments (8,960) (8,960)
Dividends (8,435) (8,435)
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
At 27 January 2019 2,110 143,294 2,321 (19,957) 3,697 180,630 312,095
----------------------------------- ------- ------- ---------- -------- ----------- -------- --------
[1] Deferred tax liabilities and retained earnings have been
restated. See note 7 in our 2018 financial statements for further
details.
NOTES TO THE FINANCIAL STATEMENTS
1. General information
J D Wetherspoon plc is a public limited company, incorporated
and domiciled in England and Wales.
Its registered office address is: Wetherspoon House, Central
Park, Reeds Crescent, Watford, WD24 4QL.
The company is listed on the London Stock Exchange.
This condensed half-yearly financial information was approved
for issue by the board on 14 March 2019.
This interim report does not comprise statutory accounts within
the meaning of Sections 434 and 435 of the Companies Act 2006.
Statutory accounts for the year ended 29 July 2018 were approved by
the board of directors on 13 September 2018 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis-of-matter
paragraph or any statement under Sections 498 to 502 of the
Companies Act 2006.
There are no changes to the principal risks and uncertainties as
set out in the financial statements for the 52 weeks ended 29 July
2018, which may affect the company's performance in the next six
months. The most significant risks and uncertainties relate to the
taxation on, and regulation of, the sale of alcohol, cost increases
and UK disposable consumer incomes. For a detailed discussion of
the risks and uncertainties facing the company, refer to the annual
report for 2018,
pages 36 and 37.
2. Basis of preparation
This condensed half-yearly financial information of J D
Wetherspoon plc (the 'Company'), which is abridged and unaudited,
has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with
International Accounting Standards (IAS) 34, Interim Financial
Reporting, as adopted by the European Union. This interim report
should be read in conjunction with the annual financial statements
for the 52 weeks ended 29 July 2018 which were prepared in
accordance with IFRSs, as adopted by the European Union.
The directors have made enquiries into the adequacy of the
Company's financial resources, through a review of
the Company's budget and medium-term financial plan, including
capital expenditure plans and cash flow forecasts; they have
satisfied themselves that the Company will continue in operational
existence for the foreseeable future. For this reason, they
continue to adopt the going-concern basis in preparing the
Company's financial statements.
The financial information for the 52 weeks ended 29 July 2018 is
extracted from the statutory accounts of the Company for that
year.
The interim results for the 26 weeks ended 27 January 2019 and
the comparatives for 28 January 2018 are unaudited, yet have been
reviewed by the independent auditors. A copy of the review report
is included
at the end of this report.
3. Accounting policies
With the exception of tax, the accounting policies adopted in
the preparation of the interim report are consistent with those
applied in the preparation of the Company's annual report for the
year ended 29 July 2018 - and the same methods of computation and
presentation are used.
Income tax
Taxes on income in the interim periods are accrued using the tax
rate which would be applicable to expected total
annual earnings.
Changes in standards
At the date of authorisation of these financial statements,
certain new standards and amendments to existing standards have
been published which are not yet effective and have not been
adopted early by the Company. Information on those expected to be
relevant to the financial statements is provided below:
IFRS 16 Leases is effective for accounting periods starting on
or after 1 January 2019, replacing IAS 17 Leases. The accounting
standard will become effective for the Company from the start of
next financial year, starting on 29 July 2019.
When the new standard becomes effective, the Company will
recognise, on the balance sheet, a right-of-use asset and a lease
liability for future lease payments in respect of all leases,
excluding those with terms less than 12 months and those for
low-value assets. Within the income statement, the rental expense
will be replaced with a depreciation charge on the right-of-use
assets and an interest expense on the lease liability. Over the
term of a lease, the expense charged to the income statement for
depreciation and interest under IFRS 16 will be exactly equal to
the rental charge under the current accounting rules. IFRS 16 will
change the timing of the expense charged to the income statement,
with higher costs charged in the early years of a lease and lower
costs charged in the latter years. There will be no impact on cash
flows as a result of this accounting change. Although the new
standard will change the presentation of the leases within the
accounts, the Company does not believe that the new standard will
change the underlying economics of the business.
The terms of leases taken by the Company vary, but typically, at
inception, a property lease will be for a period of up to 30 years,
with a break at 15 years. As disclosed in note 25, in our 2018
annual report, we had operating lease commitments totalling
GBP728m; therefore, IFRS 16 will have a material impact on our
accounts.
We have made draft calculations of the impact of IFRS 16 and are
in the process of validating our lease data. There are several
policies and procedures to be introduced to support the new
accounting standard. Until we have finalised this work, we do not
think it practicable to provide a reasonable estimate on the
financial reporting effect of IFRS 16.
On 28 May 2014, the International Accounting Standards Board
issued IFRS 15 - 'Revenue from Contracts with Customers' which is
effective for periods starting on or after 1 January 2018. The
impact of this accounting standard on the Company's accounts is
considered immaterial.
On 24 July 2014, the International Accounting Standards Board
issued IFRS 9 - 'Financial Instruments: Recognition and
Measurement' which was effective for periods starting on or after 1
January 2018. IFRS 9 addresses the classification, measurement and
derecognition of financial assets and financial liabilities and
introduces new rules for hedge accounting and a new impairment
model for financial assets.
Debt instruments previously classified as held to maturity and
measured at amortised cost have met the conditions for
classification at amortised cost under IFRS 9.
The Company's hedge relationships qualified as continuing
hedges, on the adoption of IFRS 9.
Other standards which are not expected to have a material impact
are shown below:
n Amendments to IAS 40: Transfers of Investment Property
n Amendments to IFRS 2: Classification and Measurement of
Share-Based Payment Transactions
n IFRIC Interpretation 22: Foreign Currency Transactions and
Advance Considerations
n IFRIC Interpretation 23: Uncertainty over Income Tax
Treatments
4. Revenue
Revenue disclosed in the income statement is analysed
as follows:
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
------------------------------------------- ----------- ---------- ---------
Sales of food, beverages, hotel rooms
and machine income 889,606 830,392 1,693,818
-------------------------------------------- ----------- ---------- ---------
5. Operating profit - analysis of costs by nature
This is stated after charging/(crediting):
Notes Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
---------------------------------------------- ----- ---------- ---------- --------
Concession rental payments 14,737 11,474 25,075
Minimum operating lease payments 20,271 22,430 42,754
Repairs and maintenance 35,937 32,182 71,261
Net rent receivable (678) (679) (1,407)
Share-based payments 5,651 5,464 11,405
Depreciation of property, plant and equipment 11 36,825 34,270 70,918
Amortisation of intangible assets 12 3,847 3,992 7,984
Depreciation of investment properties 13 27 28 56
Amortisation of other non-current assets 14 169 170 347
---------------------------------------------- ----- ---------- ---------- --------
6. Property (gains)/losses
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
-------------------------------------------- ---------- ---------- --------
Non-exceptional property (gains)/losses
Loss/(gain) on disposal of fixed assets (3,634) (988) (1,865)
Additional costs of disposal 196 15 117
Other property gains (334) (680) (1,152)
--------------------------------------------- ---------- ---------- --------
(3,772) (1,653) (2,900)
Exceptional property losses
Loss on disposal of fixed assets - disposal
programme 16 3,580 5,076
Additional costs of disposal 306 2,330 3,625
Impairment of property, plant and equipment 806 1,131 3,588
Onerous lease provision 523 615 5,962
--------------------------------------------- ---------- ---------- --------
1,651 7,656 18,251
Total property (gains)/ losses (2,121) 6,003 15,351
--------------------------------------------- ---------- ---------- --------
7. Exceptional items
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
-------------------------------------------- ---------- ---------- --------
Exceptional property losses
Disposal programme
Loss on disposal of pubs 322 5,910 8,701
Impairment of property plant and equipment 806 1,131 -
Impairment of other non-current assets - - -
Onerous lease reversal (322) - (173)
Onerous lease provision 480 242 4,693
--------------------------------------------- ---------- ---------- --------
1,286 7,283 13,221
Other property losses
Impairment of property, plant and equipment - - 3,588
Impairment of intangible assets - - -
Onerous lease reversal (154) (110) -
Onerous lease provision 519 483 1,442
--------------------------------------------- ---------- ---------- --------
365 373 5,030
Total exceptional property losses 1,651 7,656 18,251
--------------------------------------------- ---------- ---------- --------
Exceptional tax
Tax effect on exceptional items (99) (881) (1,278)
--------------------------------------------- ---------- ---------- --------
(99) (881) (1,278)
Total exceptional items 1,552 6,775 16,973
--------------------------------------------- ---------- ---------- --------
Disposal programme
The Company has offered several of its sites for sale. During
the half year end, two pubs had been sold and two were
classified as held for sale. In the table above, those costs
classified as loss on disposal are the loss on sold sites and
associated costs to sale.
The costs classified above as impairment of assets of GBP806,000
relate to the write-down of assets on two sites where the Company
has committed to exiting.
Other property losses
The onerous lease provision relates to pubs for which future
trading profits, or income from subleases, are not expected to
cover the rent. The provision takes several factors into account,
including the expected future profitability of the pub and also
the amount estimated as payable on surrender of the lease, where
this is a likely outcome. In the period, GBP365,000 was
charged net in respect of onerous leases.
8. Income tax expense
The taxation charge for the 26 weeks ended 27 January 2019 is
based on the pre-exceptional profit before tax of GBP50.3m and the
estimated effective tax rate before exceptional items for the 26
weeks ended 27 January 2019 of 21.4% (July 2018: 22.0%). This
comprises a pre-exceptional current tax rate of 22.6% (July 2018:
22.1%) and a pre-exceptional deferred tax credit of
1.2% (July 2018: 0.1%).
The UK standard weighted average tax rate for the period is 19%
(2018: 19%). The current tax rate is higher than the UK standard
weighted average tax rate, owing mainly to depreciation which is
not eligible for tax relief.
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
-------------------------------------------- ---------- ---------- --------
Income tax before exceptional items
Current income tax:
Current tax 11,802 13,645 24,466
Prior year adjustment (415) (6) (765)
--------------------------------------------- ---------- ---------- --------
Total current income tax 11,387 13,639 23,701
Deferred tax:
Origination and reversal of temporary
differences (452) (58) (70)
Adjustment in respect of prior period (159) 204 (64)
--------------------------------------------- ---------- ---------- --------
Total deferred tax (611) 146 (134)
Total income tax expense before exceptional
items 10,776 13,785 23,567
--------------------------------------------- ---------- ---------- --------
Exceptional income tax
Exceptional current income tax:
Current tax on exceptional items (99) (221) (325)
--------------------------------------------- ---------- ---------- --------
Total exceptional current income tax (99) (221) (325)
Exceptional deferred tax:
Deferred tax on exceptional items - (660) (953)
--------------------------------------------- ---------- ---------- --------
Total exceptional deferred tax - (660) (953)
Total exceptional income tax credit on
exceptional items (99) (881) (1,278)
--------------------------------------------- ---------- ---------- --------
Tax charge in the income statement 10,677 12,904 22,289
--------------------------------------------- ---------- ---------- --------
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
-------------------------------------------- ---------- ---------- --------
Taken through equity
Current tax on share-based payment (536) (320) (472)
Deferred tax on share-based payment 138 (214) (55)
--------------------------------------------- ---------- ---------- --------
Tax charge credit (398) (534) (527)
--------------------------------------------- ---------- ---------- --------
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
-------------------------------------------- ---------- ---------- --------
Taken through comprehensive income
Deferred tax charge on swaps 11 2,299 2,513
Impact of change in UK tax rate - (243) -
--------------------------------------------- ---------- ---------- --------
Tax charge 11 2,056 2,513
--------------------------------------------- ---------- ---------- --------
9. Earnings and free cash flow per share
(a) Weighted average number of shares
Earnings per share are based on the weighted average number of
shares in issue of 105,501,035 (2018: 105,605,135),
including those held in trust in respect of employee share
schemes. Earnings per share, calculated on this basis, are usually
referred to as 'diluted', since all of the shares in issue are
included.
Accounting standards refer to 'basic earnings' per share - these
exclude those shares held in trust in respect of
employee share schemes.
Unaudited Unaudited Audited
Weighted average number of shares 26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
------------------------------------------ ----------- ----------- -----------
Shares in issue (used for diluted EPS) 105,501,035 105,605,135 105,605,135
Shares held in trust (2,248,342) (2,366,388) (2,402,603)
------------------------------------------- ----------- ----------- -----------
Shares in issue less shares held in trust 103,252,693 103,238,747 103,202,532
------------------------------------------- ----------- ----------- -----------
The weighted average number of shares held in trust for employee
share schemes has been adjusted to exclude those shares which have
vested, but which remain in trust.
(b) Earning per share
26 weeks ended 27 January 2019 unaudited Profit Basic EPS Diluted EPS
GBP000 pence pence
------------------------------------------ ------- --------- -----------
Earnings (profit after tax) 37,948 36.8 36.0
Exclude effect of exceptional items
after tax 1,552 1.5 1.4
------------------------------------------- ------- --------- -----------
Earnings before exceptional items 39,500 38.3 37.4
Exclude effect of property gains/(losses) (3,772) (3.7) (3.5)
------------------------------------------- ------- --------- -----------
Underlying earnings before exceptional
items 35,728 34.6 33.9
------------------------------------------- ------- --------- -----------
26 weeks ended 28 January 2018 unaudited Profit Basic EPS Diluted EPS
GBP000 pence pence
------------------------------------------ ------- --------- -----------
Earnings (profit after tax) 41,441 40.1 39.2
Exclude effect of exceptional items
after tax 6,775 6.6 6.5
------------------------------------------- ------- --------- -----------
Earnings before exceptional items 48,216 46.7 45.7
Exclude effect of property gains/(losses) (1,653) (1.6) (1.6)
------------------------------------------- ------- --------- -----------
Underlying earnings before exceptional
items 46,563 45.1 44.1
------------------------------------------- ------- --------- -----------
52 weeks ended 29 July 2018 audited Profit Basic EPS Diluted EPS
GBP000 pence pence
------------------------------------------ ------- --------- -----------
Earnings (profit after tax) 66,709 64.6 63.2
Exclude effect of exceptional items
after tax 16,973 16.5 16.0
------------------------------------------- ------- --------- -----------
Earnings before exceptional items 83,682 81.1 79.2
Exclude effect of property gains/(losses) (2,900) (2.8) (2.7)
------------------------------------------- ------- --------- -----------
Underlying earnings before exceptional
items 80,782 78.3 76.5
------------------------------------------- ------- --------- -----------
9. Earnings and free cash flow per share (continued)
(c) Owners' earnings per share
Owners' earnings measure the earning attributable to
shareholders from current activities adjusted for significant
non-cash and one-off items. Owners' earnings are calculated as
profit before tax, exceptional items, depreciation and amortisation
and property gains and losses less reinvestment in current
properties and cash tax. Cash tax is defined as the current year
current tax charge.
26 weeks ended 27 January 2019 Owners' Basic Diluted
Earnings Owners' Owners'
EPS EPS
GBP000 pence pence
-------------------------------------------- -------- ------- -------
Profit before tax and exceptional items
(income statement) 50,276 48.7 47.7
Exclude depreciation and amortisation (note
5) 40,868 39.6 38.7
Less reinvestment in current properties (24,919) (24.1) (23.6)
Exclude property gains and losses (note
6) (3,772) (3.7) (3.6)
Less cash tax (note 8) (11,802) (11.4) (11.2)
--------------------------------------------- -------- ------- -------
Owners' earnings 50,651 49.1 48.0
--------------------------------------------- -------- ------- -------
26 weeks ended 28 January 2018 Owners' Basic Diluted
Earnings Owners' Owners'
EPS EPS
GBP000 pence pence
-------------------------------------------- -------- ------- -------
Profit before tax and exceptional items
(income statement) 62,001 60.1 58.7
Exclude depreciation and amortisation (note
5) 38,460 37.3 36.4
Less reinvestment in current properties (35,091) (34.0) (33.2)
Exclude property gains and losses (note
6) (1,653) (1.7) (1.6)
Less cash tax (note 8) (13,645) (13.2) (12.9)
--------------------------------------------- -------- ------- -------
Owners' earnings 50,072 48.5 47.4
--------------------------------------------- -------- ------- -------
52 weeks ended 29 July 2018 Owners' Basic Diluted
Earnings Owners' Owners'
EPS EPS
GBP000 pence pence
--------------------------------------------- -------- ------- -------
Profit before tax and exceptional items
(income statement) 107,249 103.9 101.6
Exclude depreciation and amortisation (note
5) 79,305 76.8 75.1
Less cash reinvestment in current properties (64,665) (62.7) (61.2)
Exclude property gains and losses (note
6) (2,900) (2.8) (2.7)
Less cash tax (note 8) (24,466) (23.6) (23.3)
---------------------------------------------- -------- ------- -------
Owners' earnings 94,523 91.6 89.5
---------------------------------------------- -------- ------- -------
The diluted owners' earnings per share increased by 1.3% (year
end 2018: increased by 14.5%).
Analysis of additions by type Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
------------------------------------------ ---------- ---------- --------
Reinvestment in existing pubs 24,919 35,091 64,665
Investment in new pubs and pub extensions 14,841 18,803 35,863
Lease premiums 93 - -
Freehold reversions 55,653 7,520 9,555
------------------------------------------- ---------- ---------- --------
95,506 61,414 110,083
------------------------------------------ ---------- ---------- --------
9. Earnings and free cash flow per share (continued)
Analysis of additions by category Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
---------------------------------------- ---------- ---------- --------
Property, plant and equipment (note 11) 93,032 58,894 107,011
Intangible assets (note 12) 2,381 2,520 3,072
Other non-current assets (note 14) 93 - -
----------------------------------------- ---------- ---------- --------
95,506 61,414 110,083
---------------------------------------- ---------- ---------- --------
(d) Free cash flow per share
Free cash Basic Diluted
free free
flow cash flow cash flow
per share per share
GBP000 pence pence
------------------------------- --------- --------- ---------
26 weeks ended 27 January 2019 71,650 69.4 67.9
26 weeks ended 28 January 2018 36,763 35.6 34.8
52 weeks ended 29 July 2018 93,357 90.5 88.4
-------------------------------- --------- --------- ---------
The calculation of free cash flow per share is based on the net
cash generated by business activities and available for investment
in new pub developments and extensions to current pubs, after
funding interest, corporation tax, loan issue costs,
all other reinvestment in pubs open at the start of the period
and the purchase of own shares under the employee share-based
schemes ('free cash flow'). It is calculated before taking account
of proceeds from property disposals, inflows and outflows of
financing from outside sources and dividend payments and is based
on the weighted average number of shares in issue, including those
held in trust in respect of the employee share schemes.
10. Cash generated from operations
Notes Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
---------------------------------------------- ----- ---------- ---------- --------
Profit for the period 37,948 41,441 66,709
Adjusted for:
Tax 8 10,677 12,904 22,289
Share-based charges 5 5,651 5,464 11,405
(Profit)/Loss on disposal of property, plant
and equipment 6 (3,618) 2,592 3,211
Net onerous lease provision 6 523 615 5,962
Net impairment charge 7 806 1,131 3,588
Interest receivable (26) (27) (48)
Interest payable 16,935 13,105 26,450
Depreciation of property, plant and equipment 11 36,825 34,270 70,918
Amortisation of intangible assets 12 3,847 3,992 7,984
Depreciation on investment properties 13 27 28 56
Amortisation of other non-current assets 14 169 170 347
Amortisation of bank loan issue costs 15 58 561 1,540
Aborted properties costs 407 262 541
Net exceptional finance income - - -
---------------------------------------------- ----- ---------- ---------- --------
110,229 116,508 220,952
Change in inventories 531 1,044 (1,725)
Change in receivables (1,206) (2,788) (1,225)
Change in payables 23,678 (10,698) 10,298
---------------------------------------------- ----- ---------- ---------- --------
Cash flow from operating activities 133,232 104,066 228,300
---------------------------------------------- ----- ---------- ---------- --------
11. Property, plant and equipment
Freehold Short- Equipment, Assets Total
and
long-leasehold leasehold fixtures under
property property and fittings construction
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------- -------------- --------- ------------ ------------ ---------
Cost:
At 30 July 2017 1,066,936 361,609 561,801 67,834 2,058,180
Additions 10,932 1,238 25,961 20,763 58,894
Transfers 16,799 981 4,211 (21,991) -
Exchange differences (280) (52) (102) (242) (676)
Transfer to held for
sale (1,506) (529) (951) - (2,986)
Disposals (6,798) (4,742) (4,401) - (15,941)
Reclassification 5,341 (5,341) - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 28 January 2018 1,091,424 353,164 586,519 66,364 2,097,471
--------------------------- -------------- --------- ------------ ------------ ---------
Additions 17,116 5,596 30,689 (5,284) 48,117
Transfers 3,876 510 2,703 (7,089) -
Exchange differences 193 36 71 211 511
Transfer to held for
sale (3) 529 604 - 1,130
Disposals (2,504) (2,902) (2,786) - (8,192)
Reclassification 773 (773) - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 29 July 2018 1,110,875 356,160 617,800 54,202 2,139,037
--------------------------- -------------- --------- ------------ ------------ ---------
Additions 40,278 1,602 14,438 36,714 93,032
Transfers 18,461 1,034 5,107 (24,602) -
Exchange differences (367) (68) (137) (595) (1,167)
Transfer to held for
sale (5,450) - (600) - (6,050)
Disposals (2,122) (1,975) (1,754) - (5,851)
Reclassification 17,641 (17,641) - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 27 January 2019 1,179,316 339,112 634,854 65,719 2,219,001
--------------------------- -------------- --------- ------------ ------------ ---------
Accumulated depreciation
and impairment:
At 30 July 2017 (205,374) (179,793) (390,380) - (775,547)
Provided during the
period (8,185) (6,237) (19,848) - (34,270)
Exchange differences - (3) (21) - (24)
Impairment loss (826) (149) (156) - (1,131)
Transfer to held for
sale 1,261 529 920 - 2,710
Disposals 2,586 4,520 4,043 - 11,149
Reclassification (2,309) 2,309 - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 28 January 2018 (212,847) (178,824) (405,442) - (797,113)
--------------------------- -------------- --------- ------------ ------------ ---------
Provided during the
period (8,243) (6,729) (21,676) - (36,648)
Exchange differences (36) (11) (88) - (135)
Impairment loss (127) (1,367) (963) - (2,457)
Transfer to held for
sale (1,132) (529) (648) - (2,309)
Disposals 489 2,744 2,465 - 5,698
Reclassification (141) 141 - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 29 July 2018 (222,037) (184,575) (426,352) - (832,964)
--------------------------- -------------- --------- ------------ ------------ ---------
Provided during the
period (9,058) (6,019) (21,748) - (36,825)
Exchange differences 39 - 41 - 80
Impairment loss - (545) (261) - (806)
Transfer to held for
sale 2,067 - 600 - 2,667
Disposals 1,459 2,000 1,647 - 5,106
Reclassification (10,308) 10,308 - - -
--------------------------- -------------- --------- ------------ ------------ ---------
At 27 January 2019 (237,838) (178,831) (446,073) - (862,742)
--------------------------- -------------- --------- ------------ ------------ ---------
Net book amount at
27 January 2019 941,478 160,281 188,781 65,719 1,356,259
--------------------------- -------------- --------- ------------ ------------ ---------
Net book amount at
29 July 2018 888,838 171,585 191,448 54,202 1,306,073
--------------------------- -------------- --------- ------------ ------------ ---------
Net book amount at
28 January 2018 878,577 174,340 181,077 66,364 1,300,358
--------------------------- -------------- --------- ------------ ------------ ---------
Net book amount at
30 July 2017 861,562 181,816 171,421 67,834 1,282,633
--------------------------- -------------- --------- ------------ ------------ ---------
12. Intangible assets
GBP000
----------------------------- --------
Cost:
At 30 July 2017 65,674
Additions 2,520
Disposals (2)
----------------------------------- --------
At 28 January 2018 68,192
----------------------------------- --------
Additions 552
Disposals (1)
----------------------------------- --------
At 29 July 2018 68,743
----------------------------------- --------
Additions 2,381
----------------------------------- --------
At 27 January 2019 71,124
----------------------------------- --------
Accumulated depreciation and
impairment:
At 30 July 2017 (35,983)
Provided during the period (3,992)
Disposals 2
----------------------------------- --------
At 28 January 2018 (39,973)
----------------------------------- --------
Provided during the period (3,992)
Disposals 1
----------------------------------- --------
At 29 July 2018 (43,964)
----------------------------------- --------
Provided during the period (3,847)
----------------------------------- --------
At 27 January 2019 (47,811)
----------------------------------- --------
Net book amount at 27
January 2019 23,313
----------------------------------- --------
Net book amount at 29
July 2018 24,779
----------------------------------- --------
Net book amount at 28
January 2018 28,219
----------------------------------- --------
Net book amount at 30
July 2017 29,691
----------------------------------- --------
The intangible assets relates to computer software and
development.
13. Investment property
GBP000
------------------------------ ------
Cost:
At 30 July 2017 7,751
------------------------------------ ------
At 28 January 2018 7,751
------------------------------------ ------
At 29 July 2018 7,751
------------------------------------ ------
At 27 January 2019 7,751
------------------------------------ ------
Accumulated depreciation
and impairment:
At 30 July 2017 (201)
Provided during the period (28)
------------------------------------ ------
At 28 January 2018 (229)
------------------------------------ ------
Provided during the period (28)
------------------------------------ ------
At 29 July 2018 (257)
------------------------------------ ------
Provided during the period (27)
------------------------------------ ------
At 27 January 2019 (284)
------------------------------------ ------
Net book amount at 27 January
2019 7,467
------------------------------------ ------
Net book amount at 29 July
2018 7,494
------------------------------------ ------
Net book amount at 28 January
2018 7,522
------------------------------------ ------
Net book amount at 30 July
2017 7,550
------------------------------------ ------
Rental income received in the period from investment properties
was GBP157,000 (2018: GBP157,000). Operating costs, excluding
depreciation, incurred in relation to these properties amounted to
GBP59,000 (2018: GBP10,000).
In the opinion of the directors, the cost as stated above is
equivalent to the fair value of properties.
14. Other non-current assets
Lease
premiums
GBP000
------------------------------ ---------
Cost:
At 30 July 2017 12,727
------------------------------------ ---------
At 28 January 2018 12,727
------------------------------------ ---------
At 29 July 2018 12,727
Additions 93
------------------------------------ ---------
At 27 January 2019 12,820
------------------------------------ ---------
Accumulated depreciation and
impairment:
At 30 July 2017 (4,455)
Provided during the period (170)
------------------------------------ ---------
At 28 January 2018 (4,625)
------------------------------------ ---------
Provided during the period (177)
------------------------------------ ---------
At 29 July 2018 (4,802)
------------------------------------ ---------
Provided during the period (169)
------------------------------------ ---------
At 27 January 2019 (4,971)
------------------------------------ ---------
Net book amount at 27 January
2019 7,849
------------------------------------ ---------
Net book amount at 29 July
2018 7,925
------------------------------------ ---------
Net book amount at 28 January
2018 8,102
------------------------------------ ---------
Net book amount at 30 July
2017 8,272
------------------------------------ ---------
15. Analysis of change in net debt
29 July Cash Non-cash 27 January
2018 flows movement 2019
GBP000 GBP000 GBP000 GBP000
------------------------------------------- --------- -------- -------- ----------
Cash and cash equivalents
Cash in hand 63,091 (25,737) - 37,354
---------------------------------------------- --------- -------- -------- ----------
Total cash and cash equivalents 63,091 (25,737) - 37,354
---------------------------------------------- --------- -------- -------- ----------
Borrowings
Bank loans - due before one
year (8,804) 8,804 - -
Finance lease creditor - due before one
year - (3,207) - (3,207)
Other loans (60) 60 - -
---------------------------------------------- --------- -------- -------- ----------
Current net borrowings (8,864) 5,657 - (3,207)
Bank loans - due after
one year (779,999) 29,999 - (750,000)
Finance lease creditor - due after one
year - (8,095) - (8,095)
Other loans (421) 462 (58) (17)
---------------------------------------------- --------- -------- -------- ----------
Non-current net borrowings (780,420) 22,366 (58) (758,112)
Total borrowings (789,284) 28,023 (58) (761,319)
---------------------------------------------- --------- -------- -------- ----------
Net debt (726,193) 2,286 (58) (723,965)
---------------------------------------------- --------- -------- -------- ----------
Derivatives
Interest-rate swaps asset - due after one
year 14,976 - (3,556) 11,420
Interest-rate swaps liability - due before
one year (160) - 160 -
Interest-rate swap liability - due after
one year (38,925) - 3,460 (35,465)
---------------------------------------------- --------- -------- -------- ----------
Total derivatives (24,109) - 64 (24,045)
---------------------------------------------- --------- -------- -------- ----------
Net debt after derivatives (750,302) 2,286 6 (748,010)
---------------------------------------------- --------- -------- -------- ----------
16. Fair values
The table below highlights any differences between the book
value and the fair value of financial instruments.
Unaudited Unaudited Unaudited Unaudited Audited Audited
27 January 27 January 28 January 28 January 29 July 29 July
2019 2019 2018 2018 2018 2018
Book value Fair value Book value Fair value Book value Fair value
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Financial assets at amortised
cost
Cash and cash equivalents 37,354 37,354 63,736 63,736 63,091 63,091
Receivables 6,528 6,528 6,514 6,514 3,969 3,969
------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
43,882 43,882 70,250 70,250 67,060 67,060
Financial liabilities at
amortised cost
Trade and other payables (267,235) (267,235) (219,061) (219,061) (231,783) (231,783)
Borrowings (761,319) (760,750) (820,104) (820,165) (789,284) (788,923)
------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
(1,028,554) (1,027,985) (1,039,165) (1,039,226) (1,021,067) (1,020,706)
Derivatives - cash flow hedges
Non-current interest-rate
swap assets 11,420 11,420 16,204 16,204 14,976 14,976
Current interest-rate swap
liabilities - - (3,728) (3,728) (160) (160)
Non-current interest-rate
swap liabilities (35,465) (35,465) (39,271) (39,271) (38,925) (38,925)
------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
(24,045) (24,045) (26,795) (26,795) (24,109) (24,109)
------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
The fair value of derivatives has been calculated by discounting
all future cash flows by the market yield curve at the balance
sheet date. The fair value of borrowings has been calculated by
discounting the expected future cash flows at the half year end's
prevailing interest rates.
16. Fair values (continued)
Interest-rate swaps
At 27 January 2019, the Company had fixed-rate swaps designated
as hedges of floating-rate borrowings. The floating-rate borrowings
are interest-bearing borrowings at rates based on LIBOR, fixed for
periods of one month.
Change Deferred Total
in
fair value tax
Changes in valuation of swaps GBP000 GBP000 GBP000
------------------------------------------- ---------- -------- -------
Fair value at 28 January
2018 (unaudited) 26,795 (4,556) 22,239
Gain taken directly to other comprehensive
income (2,686) 457 (2,229)
--------------------------------------------- ---------- -------- -------
Fair value at 29 July 2018
(audited) 24,109 (4,099) 20,010
Gain taken directly to other comprehensive
income (64) 11 (53)
--------------------------------------------- ---------- -------- -------
Fair value at 27 January 2019 (unaudited) 24,045 (4,088) 19,957
-------------------------------------------- ---------- -------- -------
Fair value of financial assets and liabilities
IFRS 7 requires disclosure of fair value measurements by level,
using the following fair value measurement hierarchy:
n Quoted prices in active markets for identical assets or
liabilities (level 1)
n Inputs other than quoted prices included in level 1 which are
observable for the asset or liability, either directly or
indirectly (level 2)
n Inputs for the asset or liability which are not based on
observable market data (level 3)
The fair value of the interest-rate swaps of GBP24.0m is
considered to be level 2. All other financial assets and
liabilities are measured in the balance sheet at amortised cost,
and their valuation is also considered to be level 2.
17. Dividends paid and proposed
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2019 2018 2018
GBP000 GBP000 GBP000
----------------------------------- ---------- ---------- --------
Paid in the period
2017 final dividend - 8,437 8,437
2018 interim dividend - - 4,218
2018 final dividend 8,435 - -
----------------------------------- ---------- ---------- --------
8,435 8,437 12,655
----------------------------------- ---------- ---------- --------
Dividends in respect of the period
Interim dividend 4,215 4,215 4,215
Final dividend - - 8,428
----------------------------------- ---------- ---------- --------
4,215 4,215 12,643
----------------------------------- ---------- ---------- --------
Dividend per share 4p 4p 12p
Dividend cover 4.5 4.9 5.3
----------------------------------- ---------- ---------- --------
Dividend cover is calculated as profit after tax and exceptional
items over dividend paid.
18. Share capital
Number Share
of
shares capital
000s GBP000
----------------------------------------------- ------- -------
Balance at 30 July 2017 (audited) 108,999 2,180
Repurchase of shares (3,498) (70)
------------------------------------------------- ------- -------
Closing balance at 28 January 2018 (unaudited) 105,501 2,110
------------------------------------------------- ------- -------
Balance at 29 July 2018 (audited) 105,501 2,110
------------------------------------------------- ------- -------
Closing balance at 27 January 2019 (unaudited) 105,501 2,110
------------------------------------------------- ------- -------
All issued shares are fully paid.
19. Related-party disclosure
There were no material changes to related-party transactions
described in the last annual financial statements. There have been
no related-party transactions having a material effect on the
Company's financial position or performance in the first half of
the current financial year.
20. Capital commitments
The Company had GBP27.5m of capital commitments for which no
provision had been made, in respect of property, plant and
equipment, at 27 January 2019 (2018: GBP28.1m).
The Company has some sites in the property pipeline; however,
any legal commitment is contingent on planning and licensing.
Therefore, there are no commitments at the balance sheet date,
in respect of these sites.
21. Events after the balance sheet date
There were no significant events after the balance sheet
date.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that this condensed interim financial
information has been prepared in accordance with IAS 34,
as adopted by the European Union, and that the interim
management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events which have occurred during
the first 26 weeks and their impact on the
condensed set of financial statements, plus a description of the
changes in principal risks and uncertainties
for the remaining 26 weeks of the financial year.
-- material related-party transactions in the first 26 weeks and
any material changes in the related-party transactions described in
the last annual report.
The directors of J D Wetherspoon plc are listed in the J D
Wetherspoon annual report for 29 July 2018. A list of current
directors is maintained on the J D Wetherspoon plc website:
jdwetherspoon.com
By order of the board
John Hutson Ben Whitley
Director Director
14 March 2019 14 March 2019
INDEPENT REVIEW REPORT TO J D WETHERSPOON PLC
Introduction
We have reviewed the condensed set of financial statements in
the half-yearly financial report of J D Wetherspoon plc (the
'Company') for the 26 weeks ended 27th January 2019 which comprises
the Income Statement, the Statement of Comprehensive Income, Cash
Flow Statement, Balance Sheet, Statement of Changes in Equity and
the related notes. We have read the other information contained in
the half yearly financial report which comprises the Financial
Highlights, Chairman's Statement and Operating Review and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion to the company on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 26 weeks ended 27
January 2019 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Use of our report
This report is made solely to the company, as a body, in
accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review
work has been undertaken so that we might state to the company
those matters we are required to state to them in an independent
review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company as a body, for our review work, for
this report, or for the conclusion we have formed.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
14 March 2019
PUBS OPENED SINCE 30 JULY 2018
Name Address Town Postcode Country
Palladium Electric 110 High Street BA3 2DA England
Midsomer Norton,
Roadstock
The Barrel Vault Unit 23 St Pancras London N1C 4QP England
International
Station, Pancras
Road
PUBS CLOSED SINCE 30 JULY 2018
Name Address Town Postcode Country
Stick or Twist The Podium Site, Merrion Leeds LS2 8PD England
Way
The Grapes 198 High Street Sutton SM1 1NR England
The Gold Balance 6-10 Newtown Gardens Kirkby L32 8RR England
The White Lion 223 London Road Mitcham CR4 2JD England
of Mortimer
The Moon Under 194 Balham High Road Balham SW12 9BP England
Water
The Green Ayre 63 North Road Lancaster LA1 1LU England
(Lloyds)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR DBGDXSBBBGCS
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