British pubs group JD Wetherspoon reported full-year pretax profit ahead of market expectations today and said it was considering all options for refinancing its debt, including a rights issue.
The company, which has 731 pubs, said pretax profit before exceptional items rose 13.6 per cent in the year to July 26th to £66.2 million.
Wetherspoon said like-for-like sales grew by 1.2 per cent during the year and sales growth had been maintained at that level in the first six weeks of its current financial year.
The company has been among the best performers in the sector over the past year as offers including a range of meals for 2.99 pounds and cheap prices on beer proved attractive to cash-strapped consumers during the recession.
Wetherspoon said it had improved its operating margin by 20 basis points to 10.2 percent, benefiting from lower energy costs and improved buying practices. It expects to cut its energy bill by £5 million in the current year.
Britain's pubs have had a torrid couple of years as a smoking ban, the recession, hikes in beer taxes, poor weather and cheap alcohol offers in supermarkets kept drinkers at home but recent updates have suggested conditions may be improving.
On Tuesday, Greene King said it had lifted like-for-like sales by 4.6 per cent at its managed pubs as it benefited from strong food sales. Mitchells & Butlers, Enterprise Inns, and Marston's will publish trading statements later in September.
Wetherspoon said it expected to start formal discussions with its lenders by the end of the calendar year over the refinancing of a £435 million facility due to expire in December 2010.
Chief executive John Hutson said all options were under review, including an issue of new equity.
"We've ruled nothing out at all. A rights issue or an equity placing, a US private placement or even a bond issue. They're all options that are available to us," Mr Hutson said in a telephone interview.
Mr Hutson added that the company would "in all probability" be in a position to make a firm announcement on refinancing plans at the time of its interim results next March.