The operator of 847 pubs said like-for-like sales in the first 14 weeks of the financial year were 9.6% higher than the same period last year and 0.4% higher than the 14 weeks ending 3 November 2019 while labour, food and repairs have been a substantial cost.
Trading has been broadly in line with expectations, although October has been a slightly slower month. For the first 9 weeks of the financial year, sales were 1.5% above the same period in 2019. For the last 5 weeks, sales were 1.1% lower than the same period in 2019.
However, in comparison to 2021, sales were up 10.1% for the first 9 weeks and were up 8.9% for the last 5 weeks.
Plans to reduce debt
Meanwhile, the company has terminated most of its interest rate swaps, receiving £169.4m after costs.
The mark-to-market value of the interest rate swaps increased by approximately £120m from the end of the last financial year (31 July 2022) to mid-October. The company decided to realise the value of the swaps as part of its plans to reduce debt over the next few financial years.
As of 6 November 2022, the company’s net debt was £745m (£892m on 31 July 2022). It has since fixed interest rates for £400m worth of borrowings for three years to 31 October 2025 at 4.67%, excluding the banks’ margin.
Interest costs for its 2023 financial year (FY) are expected to be approximately £10m higher following these transactions.
Sales improve post-restrictions
The company has opened one pub during the period and sold five pubs. The pub sales brought in £1.9m while the lease of a pub at Doncaster airport came to an end and reverted to the landlord.
As previously reported, the company put 32 pubs on the market and intends to add a further seven pubs to the disposal list this week with most sites located closely to existing JDW pubs.
JDW chairman Tim Martin said: “Sales have improved since the ending of restrictions in the early part of this calendar year and are considerably above the same period in the last financial year.
“The company reported a return to positive cash flow in FY22 and anticipates a positive cash flow in the current year.
“In my comments on the full year results released on 7 October 2022, I set out various threats to the hospitality industry and these continue to apply. Those caveats aside, in the absence of further lockdowns or restrictions, the company remains cautiously optimistic about future prospects.”