Slide 1: Preliminary Results
The Booking Office, Waverley Station, Edinburgh The Thomas Waghorn, Chatham PRELIMINARY RESULTS 9TH SEPTEMBER 2016 John Hutson – CEO Ben Whitley – FD
Slide 2: Financial Summary
Financial Summary 2016 2015 Var% 2014 2013 20122 2011 2010 2009 2008 2007 Revenue 1,595.2 1,513.9 +5.4% 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 (£m) Like-for-like sales +3.4% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% +1.2% -1.1% +5.6% Profit before tax 80.6 77.8 +3.6% 79.4 76.9 72.4 66.8 7
Slide 3: Average Weekly Sales Per Pub
Average Weekly Sales Per Pub (including VAT) £000 39.0 40 37.4 38 36.0 36 34.0 34 32.3 31.1 32 30.3 30.1 30.1 29.9 30 28 26 24 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 4: Underlying Earnings Per Share (pence)
Underlying Earnings Per Share (pence)* pence 48.0 47.6 50.0 44.7 43.8 45.0 41.3 40.0 34.9 35.3 32.6 35.0 30.0 27.1 27.6 25.0 20.0 15.0 10.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *Underlying earnings per share are before exceptional items and exclude gains/losses on property and one-off d
Slide 5: Like-for-like Performance
Like-for-like Performance % 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Bar +3.3 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 +2.5 -4.3 +3.3 Food +3.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 -0.4 +7.9 +12.6 Machines -2.2 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 -7.5 -5.8 +2.7 Hotels +9.7 +24.2 +6.3 - - - - - - - LFL sales +3.
Slide 6: 10 Year Operating Profit
10 Year Operating Profit £m 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Turnover 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 Pub profit (pre repairs) 288.3 285.4 284.4 259.0 245.4 226.8 218.5 208.4 199.5 203.2 Repairs (54.9) (53.4) (59.4) (48.0) (46.6) (38.4) (35.4)
Slide 7: Cost Increases
Cost Increases • Bar and food (modest) • Hourly paid staff rates: +5% (October 2014) • Hourly paid staff rates: +8% (August 2015) • Depreciation: +8% • Utilities (modest) The Posset Cup, Portishead, Somerset 6
Slide 8: Allocation of Resources
Allocation of Resources Dividend £15m Freehold reversions and £24m £15m investment properties £14m Buybacks £22m £25m £5m £36m £10m £5m £13m Capex on new and £15m existing pubs £33m £8m £23m £7m £76m £54m £15m £26m £8m £17m £78m £154m £151m £12m £121m £10m £113m £94m £89m £82m £75m £61m £49m £38m 20
Slide 9: Capital Expenditure
Capital Expenditure £m 2016 2015 2014 2013 2012 2011 2010 2009 2008 New Openings: Acquisition and development costs: Current year 38.6 76.5 64.5 40.4 57.2 74.0 45.2 32.0 31.0 Future year 16.6 30.5 33.2 12.8 10.4 9.0 12.5 5.8 17.6 Freehold reversions and investment 36.1 21.6 23.6 7.7 7.8 4.6 - - - pr
Slide 10: Movement in Net Debt
Movement in Net Debt £m 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Opening Net debt 601.1 556.6 474.2 462.6 437.7 388.4 390.0 442.3 436.8 355.6 Free cash flow (90.5) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) (99.5) (71.4) (52.4) Disposal of fixed assets (22.5) (0.7) (0.5) (0.6) (0.9) (1.1) (
Slide 11: 10 Year Debt Overview
10 Year Debt Overview 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Net debt/EBITDA 3.47 3.37 3.21 2.88 2.96 2.98 2.70 2.74 3.24 3.21 Interest cover (times) 2.92 2.73 3.11 2.66 2.68 2.73 3.08 2.43 2.71 3.13 Interest cover pre exceptional (times) 3.34 3.29 3.19 3.24 3.07 2.88 3.45 3.14 2.81 3.13
Slide 12: Property Update
Property Update 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Trading pubs at start of FY 951 927 886 860 823 775 731 694 671 657 Freehold pubs opened 10 24 31 14 18 34 15 13 13 11 Leasehold pubs opened 6 6 15 15 22 16 32 26 10 7 Closures/disposals (41) (6) (5) (3) (3) (2) (3) (2) - (4) Total tr
Slide 13: wetherspoon
wetherspoon
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 • Catering Academy – 896 employees have graduated with 222 employees currently going through the programme • Staff retention at its highest ever level. Average length of service fo
Slide 15: Changing Sales Mix over Last 20 Years
Changing Sales Mix over Last 20 Years 100% 6% 4% 4% 3% 6% 5% 90% 16% 18% 24% 80% 29% 31% 37% 70% Other 60% Machines 50% Food 40% 78% 76% Bar 71% 66% 64% 30% 59% 20% 10% 0% 1996 2000 2004 2008 2012 2016 14
Slide 16: Peach BrandTrack: Britain’s favourite big brand
Peach BrandTrack: Britain’s favourite big brand If the following brands were available in the same location, which would be your first choice to eat at? (ranked by % of adults choosing each brand) (out of a list of 17 – the top 6 ) Apr-16 Oct-15 Apr-15 Oct-14 Apr-14 Oct-13 Apr-13 Oct-12 May-12 JD We
Slide 17: Successes and achievements
Successes and achievements • Over 918 of our pubs are Cask Marque approved • Raised £1.6m in the last 12 months and over £12.6m during the 14-year partnership with CLIC Sargent, a charity caring for children with cancer providing support for families at home and in hospital from the day of diagnosis
Slide 18: Taxation
Taxation FY FY FY FY FY 2016 2015 2014 2013 2012 £m £m £m £m £m VAT 311.7 294.4 275.1 253.0 241.2 Alcohol duty* 164.4 161.4 157.0 144.4 136.8 PAYE and NIC 95.1 84.8 78.4 70.2 67.1 Business rates 50.2 48.7 44.9 46.4 43.9 Corporation tax 19.9 15.3 18.1 18.4 18.2 Corporation tax credit (historic capita
Slide 19: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 4th September +4.1% • Positive start • Caution over rest of year given strong LFL sales last year and low inflation environment • Currently anticipate a slightly improved trading outcome for the current financial year The Paddle Steamer, L
Slide 20: Questions
Questions The Mossy Well, Muswell Hill, London 19
Slide 21: Appendix
Harpsfield Hall, Hatfield, Hertfordshire Appendix
Slide 22: 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 • E Cash flow • F1 Summary of exceptional items • F2 Pub disposal programme • G Swap maturity profile 21
Slide 23: 10 Year Overview
Appendix A 10 Year Overview Number of pubs £ millions Turnover 1000 1,600 950 1,400 900 850 1,200 800 1,595 951 1,000 1,514 927 926 1,409 750 886 1,281 860 1,197 823 800 700 1,072 775 889 955 996 731 908 650 671 694 600 600 400 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 20
Slide 24: 10 Year Capital Trends
Appendix B 10 Year Capital Trends 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Average Size (sq.ft.) – Openings 4,264 4,321 3,585 3,643 3,325 3,572 3,781 3,359 3,618 3,855 Number of openings 16 30 46 29 40 50 47 39 23 18 % which are freehold 63 80 67 48 45 68 32 33 57 61 Freehold average cost (
Slide 25: 10 Year Financial Trends
Appendix C 10 Year Financial Trends 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Sales per pub (£000) 1,694 1,620 1,562 1,476 1,401 1,360 1,335 1,344 1,333 1,354 EBITDA per pub (£000) (1) 209.2 200.9 204.5 200.9 194.9 198.7 205.8 212.9 211.6 219.0 Number of pubs 926 951 927 886 860 823 775 731
Slide 26: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE FY FY 2016 2015 £000 £000 Shareholders equity per accounts 207,448 222,893 Deferred tax balances 63,015 69,777 Interest rate swaps valuations 63,477 39,973 Impairment balances 43,054 49,769 Net book value of revalued assets (6,550) (7,244) Adjusted shareholders equity (a)
Slide 27: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE FY FY 2016 2015 £000 £000 EBITDA (cash return) (e) 187,274 178,482 Depreciation and amortisation (f) (72,212) (66,668) EBIT (g) 115,062 111,814 Interest (34,452) (34,016) Profit before tax 80,610 77,798 Current tax (h) (18,347) (21,544) Profit after cash tax (i) 62,263 56,
Slide 28: Cash Flow
Appendix E Cash Flow FY FY 2016 2015 £000 £000 Free Cash Flow 90,485 109,778 Proceeds on Disposal 22,520 723 Investment in new pubs (55,209) (106,974) Freehold reversions & investment properties (36,083) (21,612) Dividends (14,190) (14,591) Share Buy Backs (53,580) (12,714) Other (3,595) 833 Movemen
Slide 29: Summary of Exceptional Items
Appendix F1 Summary of Exceptional Items FY FY 2016 2015 £000 £000 Operating exceptional items Inventory valuation – 5,231 Restructuring costs – 782 – 6,013 Exceptional property losses Disposal programme (see next slide) 12,370 – Other property losses Onerous lease reversal (949) (841) Onerous lease
Slide 30: Summary of pub disposal programme
Appendix F2 Summary of pub disposal programme The Company has offered a number of its pubs for sale. At the year end, 29 sites had been sold, three were classified as held for sale and an additional nine sites have been closed as part of the disposal programme. FY FY 2016 2015 £000 £000 Disposal pro
Slide 31: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £400m 12 Nov 2014 31 Jul 2016 3.5% £400m 31 Jul 2016 31 Jul 2018 2.2% £400m 31 July 2018 31 July 2021 3.7% £150m 31 July 2021 31 July 2023 3.8% 30