Tim Martin lists cost increases in financial update
Wetherspoon’s labour has increased by approximately £164m.
The chairman of J D Wetherspoon has revealed detailed cost analysis in the pub company's latest financial results.
In it pre-close trading update, Wetherspoon posted a like-for-like sales increase of 5.8% in the 10 weeks to 7 July 2024, compared to the same period last year.
Its year-to-date like-for-like sales increased by 7.7%.
Tim Martin, chairman and founder of the company, took the update as an opportunity to showcase the cost increases Wetherspoon has absorbed over the past few years.
"Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs," he says. "For example, compared to the 2019 financial year, labour in this financial year has increased by approximately £164m, energy by £28m, repairs (also affected by labour costs) by £38m and interest (excluding IFRS 16 interest) by £16m."
Wetherspoon financial position
The company estimates that net debt will be approximately £670m at the financial year end. On 6 June 2024, Wetherspoon signed a new four-year £840m banking agreement on what it called "attractive terms".
In the year-to-date, the company has opened two pubs and sold or surrendered to the landlord 26 pubs. There was a net cash inflow of £8.7m from the disposals. The company currently has a trading estate of 801 pubs, with 10 sites on the market or under offer.
"The company continues to endeavour to 'widen the moat' by investing in areas such as beer gardens, staff rooms, above-bar glass racks and improved beer dispense systems," adds Martin.
"The company continues to expect profits in the current financial year to be in line with market expectations."
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