JD Wetherspoon, the British pub giant that has several outlets in Ireland, recorded a roughly eightfold increase in profit in the first half of the year, according to interim results for the group published on Friday.
The figures, which cover the six months to January 28th, show it generated a profit before tax of £36 million (€41.9 million), compared with £4.6 million a year ago. The group’s revenue rose over 8 per cent to £991 million from £916 million in the same period last year.
The group said the results were driven by a gradual easing of costs and an increase in customers. That said, margins came in at 6.8 per cent for the reported period as inflation rose, still lagging the company’s pre-pandemic margins of 7.1 per cent.
Wetherspoon’s has reduced the number of pubs it operates over recent years after a December 2015 peak of 955 premises. The company said some leasehold pubs had been surrendered to landlords at the end of the lease or by negotiation, and other pubs have been sold to third parties. As of January, the company was trading from 814 pubs.
The company sold five pubs in the first half of its financial year, terminated the lease of another five pubs and sublet three more. This gave rise to a cash inflow of £3.8 million. There was a loss on disposal of £5.9 million relating to these pubs.
Wetherspoon announced plans to sell its regional Irish network for €10 million in October. It separately has five pubs operating in Dublin.
In spite of a reduction in the overall number of pubs, sales have continued to increase – total sales are now about a third higher than in 2015, when the number of pubs peaked, and sales per pub have increased by about 50 per cent since then, the company said.
In his chairman’s statement, founder Tim Martin said his best estimate is that the company has the potential for about 1,000 pubs in the UK.
“In summary, the company has recovered steadily from the pandemic, with current sales at record levels, and plans to increase sales in the next decade,” he said.
The accounts show like-for-like sales increased by 9.9 per cent, with like-for-like bar sales up by 11.6 per cent. Food sales rose by 7.6 per cent, while slot/fruit machine sales went up by 10.5 per cent, and hotel rooms by 2.8 per cent.
“Like-for-like sales were stronger than total sales due to a small number of pub disposals and lease terminations,” Mr Martin said.
The operating profit, before separately disclosed items, was £67.7 million, up from £37.4 million. Earnings per share before separately disclosed items amounted to 20.3p, which is up from 1p. The company has total available finance facilities of £963 million.
The net book value of the company’s assets in the balance sheet is £1.38 billion, which is approximately seven times the company’s earnings before interest, taxes, depreciation, and amortisation in the last 12 months of £198 million.
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