Slide 1: JD Wetherspoon PLC Interim Results 2012
JD WETHERSPOON PLC Interim Results 2012 9 March 2012
Slide 2: Kirk Davis – FD
Kirk Davis – FD
Slide 3: Highlights – Six Months to January 2012
Highlights – Six Months to 22 January 2012 Revenue £569.4m (2011: £525.4m) +8.4% Like-for-like sales +2.1% Free cash flow per share 27.5p (2011: 16.9p) +62.7% Free cash flow £34.9m (2011: £22.7m) +53.7% Before exceptional items: Operating profit £53.1m (2011: £49.6m) +7.2% Profit before
Slide 4: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) £000 32 31.7 31.1 31 30.3 30.1 30.5 29.9 30.1 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 H1 H1 2011 2012 Record Average Sales Per Pub Week 4
Slide 5: Like for Like Sales/Profits
Like for Like Sales/Profits % H1 2012 H1 2011 H2 2011 2011 2010 2009 2008 Bar +3.4 +0.6 +2.7 +1.7 -0.8 +2.5 -4.3 Food +0.1 +7.4 +1.3 +4.2 +0.1 -0.4 +7.9 Machines -3.8 -3.8 -3.9 -3.9 +12.1 -7.5 -5.8 Total LFL sales +2.1 +2.3 +1.9 +2.1 +0.1 +1.2 -1.1 LFL profit +1.2 -1.8 -0.6 -1.2 -2.0 -1.7 -6.6 5
Slide 6: Operating Margin - Summary
Operating Margin - Summary H1 2012 H1 2012 H1 2011 H1 2011 £000 % of £000 % of Sales Sales Turnover 569,375 525,364 Pub profit (pre repairs) 117,623 20.6 110,273 21.0 Repairs (20,073) (3.5) (17,726) (3.4) Head office costs (18,245) (3.2) (19,152) (3.7) Share Incentive Plan (2,400) (0.4) (2,271) (0.4
Slide 7: Cost Increases
Cost Increases Tax increases on excise duty, business rates and carbon tax Bar and food supplies Staff costs Utility costs 7
Slide 8: Exceptional Items – Summary
Exceptional Items – Summary H1 2012 H1 2011 £000 £000 IT related assets written off 1,933 - Property related write-offs 666 - Total 2,599 - 8
Slide 9: Allocation of Resources
Allocation of Resources £123m £161m £90m £59m £108m £164m £56m £71m £10m £5m £76m £33m £7m £26m £78m Dividends £17m Buybacks £10m Capex £12m £10m £1m £38m £75m £61m £49m £82m £126m £55m £61m 2006 2007 2008 2009 2010 2011 H1 H1 2011 2012 Increased capex on new openings, reinvestment and dividend paym
Slide 10: Capital Expenditure
Capital Expenditure HY12 HY11 £m £m Acquisition and development costs Current year 39.1 37.8 Future year 2.6 0.5 New openings 41.7 38.3 Fixtures and fittings 8.1 6.6 Refurbishments 5.7 3.6 IT & related projects 5.0 6.4 Reinvestment 18.8 16.6 Total 60.5 54.9 10
Slide 11: Movement in Net Debt inc. Finance leases
Movement in Net Debt inc. Finance leases £m FY11 Net debt 437.7 Free cash flow increased to £34.9m (2011: £22.7m). The increase in free Free cash flow (34.9) cash flow was mainly driven by working New pub capex 41.7 capital improvements. Advance under finance leases 1.2 Total net bank borrowing
Slide 12: Debt Position
Debt Position H1 H1 FY 2012 2011 2011 • Net debt/ EBITDA 2.99 2.82 2.98 • Interest cover (times) 2.92 2.86 2.73 • Interest cover pre exceptional (times) 3.07 2.86 2.88 • Fixed charge cover (times) – statutory 1.67 1.65 1.62 – excluding depreciation 2.15 2.08 2.06 – excluding depreciation and excepti
Slide 13: Banking Facilities
Banking Facilities Amendment and restatement of existing facility completed. – Now runs until 31 March 2016 – Total facilities (including overdraft) £575m £250m of new swaps entered into from November 2014 to July 2018, at an average cost of 2.4%. Delivering c. £7.5m of interest saving per annum
Slide 14: Financial Summary
Financial Summary Robust financial performance Operating margin decline reflects increasing tax and cost pressures Continued strong cash generation Unutilised banking facilities and cash balances of £125.4m as at 22 January 2012 (July 2011: £120.2m) 14
Slide 15: John Hutson - CEO
John Hutson - CEO
Slide 16: Business Update
Business Update Property New openings Continued improvement Cost outlook Taxation Current trading and outlook 16
Slide 17: Property Update
Property Update HY FY 12 11 Trading pubs at start of FY 823 775 Average cost of development £1.4m, up from £1.2m last year Freehold pubs opened 9 34 Leasehold pubs opened 11 16 Closure of one pub in suburban London and one unit at Gatwick Closures (2) (2) Airport (North terminal) Total trading p
Slide 18: The Leyland Lion, Leyland
The Leyland Lion, Leyland Open Date: 18 October 2011 Acquired from: Independent owner Customer Area: 2,870 sq ft Development Costs: £955k 18
Slide 19: The Swan Hotel, Leighton Buzzard
The Swan Hotel, Leighton Buzzard Open Date: 2 August 2011 Acquired from: Independent owner Customer Area: 2,551 sq ft Development Costs: £2,606k 19
Slide 20: The Beehive, Gatwick South Terminal
The Beehive, Gatwick South Terminal Open Date: 24 August 2011 Acquired from: Global Infrastructure Partners (GIP) Customer Area: 2,562 sq ft Development Costs: £1,085k 20
Slide 21: The Willow Tree, Stowmarket
The Willow Tree, Stowmarket Open Date: 17 January 2012 Acquired from: Independent Owner Customer Area: 2,096 sq ft Development Costs: £1,972k 21
Slide 22: Continued Improvement
Continued Improvement 238 pubs are in the CAMRA Good Beer Guide Raised over £5.2m for CLIC Sargent (for children with cancer) 188 Loo Awards 500 new apprenticeships Increased reinvestment – toilets, carpets and redecoration Bonus – £10.9m paid in H1, 98% of bonus awards made to employees
Slide 23: Cost Outlook
Cost Outlook Energy consumption Continue to keep costs under review Continue to focus on maintaining well-invested estate for the long- term benefit of the company Unsustainable tax regime 23
Slide 24: Taxation
Taxation 11/12 10/11 First half First half £m £m VAT 115.6 95.1 Alcohol duty 65.6 61.6 PAYE and NIC 32.8 32.9 Business rates 21.0 20.2 Corporation tax 9.0 11.1 Machine duty 1.6 1.5 Fuel duty 1.3 1.3 Carbon tax 1.2 0.0 Climate change levy 0.6 0.8 Stamp duty 0.6 0.5 Landfill tax 0.6 0.5 Premise licenc
Slide 25: Current Trading and Outlook
Current Trading and Outlook Largest ever ale festival expected this spring plus summer events – Ale festival 14 March – 1 April Continuing pressure from increased taxation Continuing inflation in operating costs LFL sales for the six weeks to 4 March 2012 declined by 0.7% with total sales gr
Slide 26: Appendices
Appendices A 10 Year financial graphs B 10 Year trends C Capital trends D1 ROC/CROCCE/ROE D2 ROC/CROCCE/ROE calculations D3 ROC/CROCCE/ROE calculations E Cash flow F SWAP maturity profile 26
Slide 27: 10 Year Summary
Appendix A 10 Year Summary 841 850 Number of Pubs 823 £000 Average Sales Per Pub Week (including VAT) 800 34.0 731 31.7 32.0 30.3 31.1 30.5 30.1 29.9 30.1 30.0 29.0 750 731 28.0 28.2 28.0 26.4 694 700 26.0 24.7 671 655 657 24.0 643 635 650 22.0 608 20.0 600 2002 2003 2004 2005 2006 2007 2008 2009 20
Slide 28: JDW - Financial Trends
Appendix B JDW - Financial Trends 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 H1 2011 2012 Sales per pub (£000) 1,169 1,239 1,246 1,283 1,354 1,333 1,344 1,335 1,360 674 688 EBITDA per pub (£000) (1) 201.9 204.4 195.7 205.6 219.0 211.6 212.9 205.8 198.7 97.6 98.8 Number of pubs 635 643 655 657 6
Slide 29: Capital Trends
Appendix C Capital Trends 2011 2012 Financial Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 H1 Size (sq.ft.) - Openings 3,721 4,317 4,176 3,928 3,855 3,618 3,359 3,781 3,572 3,377 3,305 Number of openings 45 28 13 9 18 23 39 47 50 14 20 % which are freehold 56 43 54 22 61 57 33 32 68 57 45 Fr
Slide 30: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2012 H1 2011 H1 P&L return on capital 11.6% 11.7% CROCCE 10.3% 10.3% P&L return on equity 17.6% 15.8% Cash return on equity 11.6% 11.1% 30
Slide 31: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE H1 H1 2012 2011 £000 £000 Profit after tax, before exceptional items (a) 25,611 22,142 Add: interest (b) 17,307 17,348 Profit pre-interest (c) 42,918 39,490 Add: deferred tax (90) 313 Depreciation 23,789 21,557 Cash return (d) 66,617 61,360 P&L return on capital [(c)/aver
Slide 32: ROC/CROCCE/ROE
Appendix D3 ROC/CROCCE/ROE H1 FY 2012 2011 £000 £000 Shareholder funds per balance sheet 181,090 171,045 Add: cumulative losses on disposal 55,805 53,206 : hedging provision 64,518 57,880 (e) 301,413 282,131 Add: net debt (f) 456,630 437,693 Capital employed (g) 758,043 719,824 Add: deferred tax pro
Slide 33: Cash Flow
Appendix E Cash Flow H1 H1 FY 2012 2011 2011 £000 £000 £000 Free Cash Flow 34,920 22,740 78,818 Dividends (10,475) - (5,211) Proceeds on Disposal 250 - 1,100 Investment in new pubs (41,666) (38,319) (87,618) (16,971) (15,579) 12,911 Issue of new shares 46 77 225 Share Buy Backs - (1,217) (32,759) (1
Slide 34: Swap Maturity Profile
Appendix F Swap Maturity Profile Weighted Swap Value From To Average Value £400m 31 Jul 2009 12 Nov 2014 5.5% £400m 12 Nov 2014 31 Jul 2016 3.6% £250m 31 Jul 2016 31 Jul 2018 2.4% 34