Slide 1: JD Wetherspoon PLC Preliminary Results 2011
JD WETHERSPOON PLC Preliminary Results 2011 9 September 2011
Slide 2: Preliminary Results 2011 - Kirk Davis, FD
JD WETHERSPOON PLC Preliminary Results 2011 Kirk Davis - FD
Slide 3: Highlights – Year to July 2011
Highlights – Year to 24 July 2011 Revenue £1,072.0m (2010: £996.3m) +7.6% Like-for-like sales +2.1% Free cash flow per share 59.7p (2010: 52.9p) +12.9% Free cash flow £78.8m (2010: £71.3m) +10.5% Before exceptional items: Operating profit £102.3m (2010: £100.0m) +2.3% Profit before tax £
Slide 4: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) £000 31 31.1 30.3 30.1 30.1 29.9 30 29.0 29 28.0 28.2 28 27 26.4 26 24.7 25 24 23 22 21 20 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Record Average Sales Per Pub Week 12/09/2011 09:42 4
Slide 5: Profit before Tax & Exceptional Items
Profit before Tax & Exceptional Items £m 75 71.0 70 66.8 66.2 65 62.0 60 58.4 58.2 56.1 55 53.6 54.1 50 47.2 45 40 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Resilient Profit Performance 12/09/2011 09:42 5
Slide 6: Earnings per Share (pence)
Earnings per Share (pence) 36.0 35.3 35 32.6 30 28.1 27.6 24.1 25 20 17.0 17.7 16.6 16.9 15 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Long Term Record of Earnings Per Share Growth 12/09/2011 09:42 6
Slide 7: Like-for-Like Sales/Profits
Like-for-Like Sales/Profits % 2011 2010 2009 2008 2007 Bar +1.7 -0.8 +2.5 -4.3 +3.3 Food +4.2 +0.1 -0.4 +7.9 +12.6 Machines -3.9 +12.1 -7.5 -5.8 +2.7 Total LFL sales +2.1 +0.1 +1.2 -1.1 +5.6 LFL profits -1.2 -2.0 -1.7 -6.6 +7.0 Pressure on profits from increased costs and taxes 12/09/2011 09:42 7
Slide 8: Operating Margin - Summary
Operating Margin - Summary 2011 2011 2010 2010 £000 % of £000 % of Sales Sales Turnover 1,072,014 - 996,327 - Pub profit (pre repairs) 226,640 21.1 217,549 21.8 Repairs (37,275) (3.5) (34,425) (3.5) Head office costs (38,179) (3.6) (35,908) (3.6) Share Incentive Plan (4,481) (0.4) (3,504) (0.4) Depr
Slide 9: Cost Increases
Cost Increases Tax increases on VAT and Duty Bar and food supplies Staff costs Utility costs Carbon tax 12/09/2011 09:42 9
Slide 10: Exceptional Items – Summary
Exceptional Items – Summary 2011 2010 £000 £000 Property Impairment 4,410 10,557 Insurance Excess 250 - Loss on Disposal 729 - Total 5,389 10,557 Impairment of 8 sites. Total provision £22.9m across 36 sites on £1.4 billion asset 12/09/2011 09:42 base 10
Slide 11: Allocation of Resources
Allocation of Resources £90m £123m £161m £90m £59m £108m £164m £10m £5m £33m £7m £76m £26m £8m Dividends £17m Buybacks £78m £126m £12m £10m Capex £43m £75m £82m £61m £49m £39m £38m 2005 2006 2007 2008 2009 2010 2011 Increased capex on new openings, reinvestment and share buybacks 12/09/2011 09:42 11
Slide 12: Capital Expenditure
Capital Expenditure FY11 FY10 £m £m Acquisition and developments costs Current year 78.6 45.2 Future year 9.0 12.5 New openings 87.6 57.7 Fixtures and fittings 13.4 12.8 Refurbishments 9.8 7.2 IT & related projects 15.2 4.1 Reinvestment 38.4 24.1 Total 126.0 81.8 Reinvestment: Installation of new EP
Slide 13: Movement in Net Debt inc. Finance leases
Movement in Net Debt inc. Finance leases £m Free cash flow increased to £78.8m (2010: £71.3m). FY10 Net debt 388.4 – Increase in cash from operations Free cash flow -78.8 due to working capital benefits in the Disposal of fixed assets -1.1 year New pub capex 87.6 Total net bank borrowing (exclud
Slide 14: Debt Position
Debt Position 2011 2010 Net debt/ EBITDA* 2.98 2.70 Interest cover (times) 2.73 3.08 Interest cover pre-exceptional (times)* 2.88 3.45 Fixed charge cover (times) - statutory 1.62 1.66 - excluding depreciation 2.06 2.14 - excluding depreciation and exceptionals 2.12 2.26 * Excludes exceptiona
Slide 15: Banking Facilities
Banking Facilities Amendment and restatement of existing facility completed. – Now runs until 31 March 2016 – Total facilities (including overdraft) £575m £400m swaps to 2014 – £250m swap expiring in November 2014 – £150m swap expire in July 2016 – Average interest cost of swaps 5.5% Unutilise
Slide 16: Dividends
Dividends 12p total dividend (2010: 19p including 7p special dividend) – 8p full year dividend proposed – 4p interim dividend paid – Dividend cover excluding exceptional items is 3.0 times Dividends reinstated at previous level 12/09/2011 09:42 16
Slide 17: Financial Summary
Financial Summary Reasonable sales result Cost increases relating to tax, labour, bar and food supplies, and utilities. Strong cash generation Unutilised banking facilities and cash balances of £120.2m as at 24 July 2011 (July 2010: £170.5m) 12/09/2011 09:42 17
Slide 18: Preliminary Results 2011 - John Hutson, CEO
JD WETHERSPOON PLC Preliminary Results 2011 John Hutson - CEO
Slide 19: Business Update
Business Update Property update New openings Continued improvement People Current trading and outlook 12/09/2011 09:42 19
Slide 20: Property Update
Property Update FY11 FY10 Trading pubs at start of FY 775 731 Average cost of development £1.21m, compared to £0.86m last year. Freehold pubs opened 34 15 Leasehold pubs opened 16 32 Closures as result of a relocation of our unit at Gatwick Airport (South Closures/Disposals -2 -3 terminal) and o
Slide 21: The Trent Bridge Inn, Nottingham
The Trent Bridge Inn, Nottingham Open Date: 24 May 2011 Acquired From: Mitchells & Butler Customer Area: 6,325 sq ft Development Costs: £1,646k 12/09/2011 09:42 21
Slide 22: The John Francis Bassett, Camborne
The John Francis Bassett, Camborne Open Date: 31st May 2011 Acquired From: Administration Customer Area: 5,823 sq ft Development Costs: £1,306k 12/09/2011 09:42 22
Slide 23: The Cooper Rose, Sunderland
The Cooper Rose, Sunderland Open Date: 1st March 2011 Acquired from: Private Vendor Customer Area: 7,597 sq ft Development Costs: £1,215k 12/09/2011 09:42 23
Slide 24: The White Lady, Edinburgh
The White Lady, Edinburgh Open Date: 21st June 2011 Acquired from: Cougar Leisure Customer Area: 3,982 sq ft Development Costs: £1,384k 12/09/2011 09:42 24
Slide 25: Continued Improvement
Continued Improvement • Record sales and operating profit • CLIC £1,082,612 raised in year. £4.6m over our eight year partnership • 232 pubs recommended in CAMRA Good Beer Guide 2011 • 188 pubs recognised in the 2010 Loo of the Year awards Ongoing improvements in the business 12/09/2011 09:42 25
Slide 26: People & Training
People & Training • Company employs over 25,500 people in full and part- time positions. An increase of over 2,800 jobs in the last 12 months • Comprehensive award winning employee training. Over 11,000 training days completed last year • Staff retention at its highest ever level. Average length of
Slide 27: Current Trading and Outlook
Current Trading and Outlook Inflation expected in bar and food supplies, labour and utilities UK consumer incomes under pressure Opportunities for profitable investment LFL sales for the 6 weeks to 4th September increased by 0.4% with total sales increasing by 6.7% Remain confident of a reas
Slide 28: Appendices
Appendices A - 10-year financial graphs B - 10-year trends C - Capital trends D - ROC/CROCCE/ROE calculations E - Cash flow 12/09/2011 09:42 28
Slide 29: 10-Year Summary
Appendix A 10-Year Summary 900 Number of Pubs Average Sales Per Pub Week (including VAT) 823 775 £000 800 731 31.1 671 694 30.3 30.1 29.9 30.1 700 643 655 31.0 29.0 635 657 28.2 608 28.0 29.0 26.4 600 27.0 24.7 25.0 500 23.0 400 21.0 19.0 300 17.0 200 15.0 2002 2003 2004 2005 2006 2007 2008 2009 201
Slide 30: JDW - Financial Trends
Appendix B JDW - Financial Trends 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sales per pub (£000) 1,093 1,169 1,239 1,246 1,283 1,354 1,333 1,344 1,335 1,360 EBITDA per pub (£000) (1) 207.4 201.9 204.4 195.7 205.6 219.0 211.6 212.9 205.8 198.7 Number of pubs 608 635 643 655 657 671 694 731 77
Slide 31: Capital Trends
Appendix C Capital Trends 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average size (sq.ft.) – 3,808 3,721 4,317 4,176 3,928 3,855 3,618 3,359 3,781 3,572 openings Number of openings 87 45 28 13 9 18 23 39 47 50 % which are freehold 53 56 43 54 22 61 57 33 32 68 Freehold average cost (£k) 597 5
Slide 32: ROC/CROCCE/ROE
Appendix D ROC/CROCCE/ROE 2011 2010 P&L return on capital 12.7% 12.4%* Crocce 10.5% 10.8%* P&L return on equity 18.9% 20.0%* Cash return on equity 11.5% 12.6%* Detailed calculations in appendix D1 12/09/2011 09:42 32
Slide 33: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2011 2010 £000 £000 Profit after tax 46,792 40,778 Add: exceptional items 5,389 10,557 Underlying PAT (e) 52,181 51,335 Add: interest (f) 35,528 28,998 Profit pre-interest (g) 87,709 80,333 Deferred tax (credit) / charge (4,569) (2,029) Depreciation 44,396 43,699 Cash retu
Slide 34: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2011 2010 £000 £000 Shareholders’ funds per balance sheet 171,045 162,142 Add: exceptional items 53,206 47,817 : hedging provision 57,880 61,391 (a) 282,131 271,350 Add: net debt (b) 437,693 388,391 Capital employed (c) 719,824 659,741 Add: deferred tax provision 71,448 75
Slide 35: Cash Flow
Appendix E Cash Flow 2011 2010 £’000 £’000 Cash from operations 178,197 153,405 Interest and tax (55,196) (51,860) Investment in existing pubs (38,400) (24,072) Investment in own shares (SIP) (5,783) (6,129) Free cash flow 78,818 71,344 HMRC Gaming Claim Settlement - 14,941 Dividends (5,211) (26,174