J D Wetherspoon Plc · LSE:JDW
J D Wetherspoon — H1 2018 Earnings Presentation
33 slides from J D Wetherspoon's earnings presentation, Mar 16, 2018
Slide 1: Interim Presentation 16 March 2018
wetherspoon Captain Ridley’s Shooting Party, B INTERIM PRESENTATION 16 MARCH 2018 John Hutson — CEO Ben Whitley — FD
Slide 2: Financial Summary
Financial Summary H1 H1 2018 2017 Var% 20172 2016 2015 2014 2013 20122 2011 2010 2009 2008 Revenue 830.4 801.4 +3.6%3 1,660.8 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 (£m) Like-for-like sales +6.1% +3.3% +4.0% +3.4% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% +1.2% -1.1% Profit befo
Slide 3: Average Weekly Total Sales Per Pub
Average Weekly Total Sales Per Pub (including VAT) £000 43.4 44 41.7 42 40.5 39.0 40 37.4 38 36.0 36 34.0 34 32.3 31.1 32 30.1 29.9 30.1 30 28 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1 H1 2017 2018 2
Slide 4: Underlying Earnings Per Share (pence)
Underlying Earnings Per Share (pence)* pence 70 66.6 65 60 55 48.0 47.6 50 44.7 43.8 44.1 45 41.3 40 34.9 35.3 32.6 33.3 35 27.6 30 25 20 15 10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1 H1 2017 2018 *Underlying earnings per share are before exceptional items and exclude gains/losses on pr
Slide 5: Like-for-like Performance
Like-for-like Performance H1 H1 % 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Bar +5.7 +2.4 +3.1 +3.3 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 +2.5 -4.3 Food +6.9 +5.1 +5.7 +3.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 -0.4 +7.9 Machines +4.6 -2.1 -1.2 -2.2 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 -7.5 -5.8 Hotel
Slide 6: 10 Year Operating Profit
10 Year Operating Profit H1 H1 £m 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Turnover 830.4 801.4 1,660.8 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 Pub profit (pre repairs) 170.1 159.0 330.6 288.3 285.4 284.4 259.0 245.4 226.8 218.5 208.4 199.5 Repairs (32.2)
Slide 7: Cost Increases
Cost Increases Year to date: • Bar and food (modest) • Wages (+4.2% from April 17) • Utility taxes (£3m) • Depreciation (+6%) Upcoming costs: • National Living Wage (+4.4% from April 18) • Sugar tax (£3m from April 18) • NEST pension contribution increases (April 18) The William Adams, Gorleston • A
Slide 8: Allocation of Resources
Allocation of Resources £13m Dividend £15m FH reversions & investment £24m £15m properties £14m Buybacks £22m £89m £25m £5m £36m Capex £5m £13m £15m £33m £8m £8m £23m £9m £11m £54m £28m £15m £8m £50m £26m £52m £17m £154m £151m £12m £121m £25m £10m £113m £94m £99m £89m £82m £61m £63m £49m £46m 2008 2
Slide 9: Cash Capital Expenditure
Cash Capital Expenditure H1 H1 £m 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 New Openings: Acquisition and development costs: Current year 12.1 12.4 27.2 38.6 76.5 64.5 40.4 57.2 74.0 45.2 32.0 31.0 Future year 15.5 5.6 13.1 16.6 30.5 33.2 12.8 10.4 9.0 12.5 5.8 17.6 Freehold revers
Slide 10: Movement in Net Debt
Movement in Net Debt H1 H1 £m 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Opening Net Debt 696.3 650.8 650.8 601.1 556.6 474.2 462.6 437.7 388.4 390.0 442.3 436.8 Free cash flow (36.8) (49.2) (107.9) (90.5) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) (99.5) (71.4) Disposal of fixed as
Slide 11: 10 Year Debt Overview
10 Year Debt Overview H1 H1 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Net debt/EBITDA 3.48 3.46 3.39 3.47 3.37 3.21 2.88 2.96 2.98 2.70 2.74 3.24 (EBITDAR - Reinvestment)/Fixed charge 2.46 2.24 2.21 2.14 1.97 1.79 1.88 1.75 1.74 2.01 2.14 2.05 Interest cover (times) 4.98 3.88 3.72
Slide 12: Property Update
Property Update H1 H1 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Trading pubs at start of FY 895 926 926 951 927 886 860 823 775 731 694 671 Freehold pubs opened 3 1 9 10 24 31 14 18 34 15 13 13 Leasehold pubs opened – 1 1 6 6 15 15 22 16 32 26 10 Closures (12) (22) (41) (41) (6) (5
Slide 13: wetherspoon
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Slide 14: “It’s a People Thing”
“It’s a People Thing” • More than 36,000 employees at the end of period • Dedicated employee website & e-learning suite • Continued investment in our training academies (including the Catering Academy) • Staff retention at its highest ever level. Average length of service for: • Pub managers now ove
Slide 15: Changing Sales Mix since 2000
Changing Sales Mix since 2000 100% 6% 5% 4% 4% 3% 90% 18% (£4.2k) 25% 29% 80% (£6.9k) 33% 35% (£8.7k) (£11.1k) (£15.3k) 70% 60% Hotel/Other 50% Machines Food 40% 76% Bar (£17.2k) 70% 66% (£19.7k) 63% (£19.8k) 61% 30% (£21.4k) (£26.5k) 20% 10% 0% 2000 2005 2009 2013 2018 H1 14
Slide 16: Successes and achievements
Successes and achievements • 225 pubs are in the 2018 CAMRA Good Beer Guide • 98% of our pubs are Cask Marque approved • Raised £0.9m in the last 6 months and over £15.3m during the 16-year partnership with CLIC Sargent, a charity caring for children with cancer providing support for families at hom
Slide 17: Taxation
Taxation H1 H1 FY FY FY FY FY FY 2018 2017 2017 2016 2015 2014 2013 2012 £m £m £m £m £m £m £m £m VAT 162.5 156.5 323.4 311.7 294.4 275.1 253.0 241.2 Alcohol duty* 85.4 79.3 167.2 164.4 161.4 157.0 144.4 136.8 PAYE and NIC 54.1 45.1 96.2 95.1 84.8 78.4 70.2 67.1 Business rates 27.5 25.3 53.0 50.2 48.
Slide 18: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 11th March +3.8% • Total sales for the six weeks to 11th March +2.6%. • Higher costs expected in the second half – wages, taxes and utilities. • Expect lower LFL sales in the next six months. • Anticipate an unchanged trading outcome for t
Slide 19: Questions
Questions The Troll Cart, Great Yarmouth
Slide 20: Appendix
wetherspoon } ‘Appendix 19
Slide 21: Appendices
Appendices • A 10 year overview • B 10 year capital trends • C 10 year financial trends • D1 ROC/CROCCE/ROE calculations • D2 ROC/CROCCE/ROE calculations • E1 Summary of exceptional items • E2 Pub disposal programme • F1 Peach Brand Track: brand for sit down meal • F2 Peach Brand Track: branded drin
Slide 22: 10 Year Overview
Appendix A 10 Year Overview 1000 Number of pubs £ millions 1,800 Turnover 950 1,600 900 1,400 850 1,200 800 951 1,661 927 926 895 906 1,000 1,514 1,595 750 886 886 1,409 860 823 800 1,197 1,281 700 775 908 955 996 1,072 694 731 801 830 650 600 600 400 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 23: 10 Year Capital Trends
Appendix B 10 Year Capital Trends H1 H1 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Average Size (sq.ft.) – 6,341 5,929 4,379 4,264 4,321 3,585 3,643 3,325 3,572 3,781 3,359 3,618 Openings Number of openings 3 2 10 16 30 46 29 40 50 47 39 23 % which are freehold 100 50 90 63 80 67 48
Slide 24: 10 Year Financial Trends
Appendix C 10 Year Financial Trends H1 H1 2018 2017 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Sales per pub (£000) 938 882 1,807 1,694 1,620 1,562 1,476 1,401 1,360 1,335 1,344 1,333 EBITDA per pub (£000) (1) 131.3 115.6 229.0 209.2 200.9 204.5 200.9 194.9 198.7 205.8 212.9 211.6 Number of p
Slide 25: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE H1 H1 FY 2018 2017 2017 £000 £000 £000 Shareholders equity per accounts 232,966 224,978 228,823 Deferred tax balances 64,447 65,893 63,119 Interest rate swaps valuations 26,795 33,096 38,896 Impairment balances 23,983 35,222 28,268 Net book value of revalued assets (6,015)
Slide 26: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 12 months to 12 months to FY January 2018 January 2017 2017 £000 £000 £000 EBITDA (cash return) (e) 217,290 200,952 205,184 Depreciation and amortisation (f) (76,022) (73,477) (73,869) EBIT (g) 141,268 127,475 131,315 Interest (27,852) (31,458) (28,485) Profit before tax 1
Slide 27: Summary of Exceptional Items
Appendix E1 Summary of Exceptional Items H1 H1 FY 2018 2017 2017 £000 £000 £000 Exceptional property losses Disposal programme (see next slide) 7,283 11,780 24,785 Other property losses Onerous lease reversal (110) (208) (696) Onerous lease provision 483 313 1,076 Impairment of property, plant and e
Slide 28: Summary of Pub-Disposal Programme
Appendix E2 Summary of Pub-Disposal Programme The Company has offered a number of its sites for sale. During the half year end, 11 pubs had been sold, two were classified as held for sale and two additional pubs had been closed as part of the pub-disposal programme. H1 H1 FY 2018 2017 2017 £000 £000
Slide 29: Peach BrandTrack: most used brand for sit down meals
Appendix F1 Peach BrandTrack: JDW is by far the most used brand for sit down meals Q: Which of the following brands have you eaten at in the past 6 months? 1. 2. 3. 4. 5. 36% 22% 21% 21% 20% Percentage of GB population eating at brand in past 6 months Source: CGA Peach BrandTrack, Apr 2017 28
Slide 30: Peach BrandTrack: branded drinking occasions
Appendix F2 Peach BrandTrack: Standout choice for branded drinking occasions 1. 3. 4. 5. 14. 15. 25. 42% 13% 13% 11% 7% 7% 5% Percentage of GB drinking population drinking at brand in past 6 months Source: CGA Peach BrandTrack, Jul 2017 29
Slide 31: Peach BrandTrack: eating at quick serve outlets
Appendix F3 Peach BrandTrack: JDW is the 5th most used eating brand in GB, holding its own against quick serve outlets 1. 2. 3. 4. 5. 57% 46% 45% 37% 36% Percentage of GB population eaten at brand in past 6 months Source: CGA Peach BrandTrack, Oct 2017 30
Slide 32: Peach BrandTrack: 4th most visited for breakfast
Appendix F4 Peach BrandTrack: 4th most visited for breakfast % of Breakfast users who have eaten at a brand for Breakfast 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% McDonald’s Costa Greggs JD Wetherspoon Starbucks Caffè Nero Burger King Subway Pret a Manger Frankie & Benny's 17% of all consumers
Slide 33: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £600m 31 Oct 2016 30 Jul 2018 1.7 £600m 31 Jul 2018 29 Jul 2021 2.7 £600m 30 Jul 2021 30 Jul 2023 1.7 £600m 31 Jul 2023 30 Jul 2026 1.0 32