JDW reports 11% fall in H1 pre-tax profits
JD Wetherspoon (JDW), the managed pub operator founded by Tim Martin, has reported an 11% decline in first half pre-tax profit to £32.2m, which it said was due to increased interest charges, following the renewal of its bank facilities in March 2010.
Total sales in the 26 weeks to 23 January 2011 increased by 7.6% to £525.4m, whilst first-half like-for-like sales climbed by 2.3%. The company also reported a 1.4% rise in operating profit to £49.6 million.
However, JDW said that its operating margin was 0.6% lower than the same period last year at 9.4%, as a result of "increased costs in a number of areas, including taxes, labour, utilities and bar & food supplies - pressures which are likely to continue into the next financial year".
Trading across the group in the six weeks to 6th March 2011 continued on a similar trend to the first half of the current financial year, with like-for-like sales up 2.8% and total sales increasing by 7.9%.
Rising costs
Tim Martin, chairman, said: "In common with most businesses in Britain, the company is faced with rising costs for a wide range of goods and services, combined with a reduction in disposable income for many customers. In addition, pubs are dealing, as indicated above, with a pernicious combination of increasing taxes and regulations.
"In spite of these obstacles, our resilient sales performance and strong cash flow should enable the company to produce a reasonable outcome in the current financial year."
The board declared an interim dividend of 4.0 pence per share for the current interim financial period ending 23 January 2011.
The group increased its investment in new pubs and in its existing estate during the period, with capital expenditure up to £54.9m against £33.8m in 2010.
JDW opened 14 new pubs during the six months, and closed two, bringing the number of pubs it operates to 787. It hopes to open around 50 pubs in its current financial year.
The group, which this morning announced the appointment of Kirk Davis as its new finance director, said it had made "substantial investments" in refurbishing its existing pubs, with over 300 projects identified for this financial year.
