JD Wetherspoon rules out rights issue
JD Wetherspoon boss John Hutson has scotched speculation in the City that the managed pub group might launch a rights issue in the near future to raise cash.
Speaking as Wetherspoons announced like-for-like sales up 1.2 per cent in the 10 weeks to January 3, 2010, against a 0.3 per cent rise in the same period a year before, Hutson said a rights issue was the "least preferred option".
"We've said all along that we preferred the route of replacing debt with debt. Talks with our banks regarding the refinancing of our £435m facility, which is due in December this year, are going well and a rights issue comes a long way down the list of options."
There were signs that the banks were lending again, Hutson added, and that both the City "and ourselves" were less anxious about the financial position of the company than was the case this time last year.
Hutson said total sales for 10 week period rose 5.3 per cent, compared to 4.5 per cent in the first quarter. In the first 12 weeks of the second quarter - to January 17, 2010 -like for like sales dipped by 0.3 per cent, and total sales rose by 3.7 per cent due to the recent bad weather, the group said. In the year to date like-for-like sales rose 0.1 per cent and total company sales, including recently opened pubs, increased by 4.1 per cent.
Hutson said the group expected operating margins for the half year ending January 24, 2010, "to be in line with the same period last year, with the benefit from lower energy costs being off-set by a higher level of repairs expenditure".
Wetherspoons' 'January sale', which ends today, had helped drive footfall into the group's pubs, Hutson said, but stressed the Wetherspoons offer was not just about price.
"Price is important to every operator but there's more to us than that. We have an exciting new range of products, we had record coffee sales in the second week of December and our recent real ale festival saw 3.5 million pints sold."
Hutson said the group anticipated opening around 50 new pubs in this financial year.
