JDW ‘cautiously optimistic for future’
In the 25 weeks to 22 January 2023, like-for-like sales were 13.1% higher than the comparable period a year ago and 0.7% lower than the same period right before the pandemic – the 25 weeks to 26 January 2020.
Like-for-like sales in the last 12 weeks were 17.8% higher than the same period a year ago and were 2.0% lower than the pre-pandemic period.
One year like-for-like sales for the sector in December 2022 were up 15%, according to the Coffer CGA Business Tracker. In comparison, JDW’s like-for-like sales in December were up 21.3%.
On 22 January 2023, the company’s net debt was £745m, around £60m lower than JDW reported at the same stage in FY2020 before the pandemic.
Cautiously optimistic
JDW chairman Tim Martin was “cautiously optimistic” about the pubco’s prospects for the financial year.
He believed the biggest threat to the hospitality industry was the vast disparity in tax treatment between pubs and restaurants and supermarkets.
He said: “Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer.
“We estimate that supermarkets have taken about half of the pub industry’s beer volumes since Wetherspoon started trading in 1979, a process that has likely accelerated following the pandemic.”
Since January 2020, the company has invested £80.4m in the freehold reversions of 31 properties, of which JDW was previously the tenant.
Ancient institution
In the period under review, it has repaid Government ‘CLBILS’ loans of £100m, which has been due to mature in August 2023.
Financial headroom at the period-end (29 January 2023) is expected to be c£225m.
Furthermore, the company has opened two pubs in the period and has sold 10. The sale of these pubs has led to a cash inflow of £2.9m. 35 sites are still on the market, and the company currently has a trading estate of 844 pubs.
For Martin, pub industry directors had, in general, failed to campaign for tax equality, which was an important principle of taxation.
“Unless the industry campaigns strongly for equality, it will inevitably shrink relative to supermarkets, which will not help high streets, tourism, the economy overall, or the ancient institution of the pub,” he added.
