J D Wetherspoon Plc · LSE:JDW
J D Wetherspoon — H1 2009 Earnings Presentation
21 slides from J D Wetherspoon's earnings presentation, Mar 13, 2009
Slide 1: Interim Results 2009
Interim Results 2009 13 March 2009
Slide 2: Highlights – Six Months to 25 January 2009
Highlights – Six Months to 25 January 2009 Financial Highlights Reported Results Revenue £468.7m (2008: £440.2m) +6.5% Like-for-like sales +1.9% Operating profit before exceptional items £46.8m (2008: £46.2m) +1.3% Operating profit after exceptional items £42.3m (2008: £44.4m) -4.7% Operating margin
Slide 3: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) 32 30.3 30.1 29.9 29.5 30 29.0 28.0 28.2 28 26.4 26 24.7 23.5 24 22.7 22 19.7 20.4 20 18 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 H1 H1 2008 2009 Sales resilient despite challenging times
Slide 4: Like for Like Sales/Profits
Like for Like Sales/Profits H1 FY FY FY FY % 2009 2008 2007 2006 2005 Bar 2.7 (4.3) 3.3 2.2 (1.4) Food 2.0 7.9 12.6 3.6 2.1 Machine (7.9) (5.8) 2.7 (1.4) (2.4) Total 1.9 (1.1) 5.6 2.0 (0.6) sales LFL (4.0) (6.6) 7.0 5.9 (4.0) Profits Bar sales back into positive growth
Slide 5: Operating Margin
Operating Margin • Gross margin broadly unchanged, helped by positive bar mix effect, offsetting food cost growth. • Staffing Costs – Higher wage rates offset by manning efficiencies. • Operating costs – Repairs cash spend consistent year on year. – Utilities higher following new contract on 1st Oct
Slide 6: Operating Margin - Summary
Operating Margin - Summary H1 H1 H1 H1 FY 2009 2009 2008 2008 2008 £000 % of Sales £000 % of Sales % of Sales Turnover 468,718 - 440,166 - Pub Operating Profit 88,541 18.9 86,846 19.7 19.2 Head Office Costs (18,370) (3.9) (16,357) (3.7) (4.0) Share Incentive Plan (1,246) (0.3) (1,310) (0.3) (0.3) De
Slide 7: Allocation of Resources
Allocation of Resources Dividends Buybacks Capex 09 08 07 H1 8 06 03 04 05 0 20 20 20 20 20 20 20 20 1 H Focus on debt reduction
Slide 8: Movement in Net Borrowings
Movement in Net Borrowings • Free cash flow increases to £39.2m (6 months to January 2008: £16.1m). • Overall decrease in net borrowings of £4.4m from year end (6 months to January 2008 : increase of £28.7m) a favourable movement of £33.1m compared to the same period last year (see Appendix E). • To
Slide 9: Debt Position
Debt Position H1 H1 FY 2009 2008 2008 Net debt/ EBITDA 3.2 3.6 3.3 Interest cover (times)* 2.9 2.9 2.7 Fixed charge cover (times) – statutory 1.6 1.7 1.6 - excluding 2.1 2.2 2.2 depreciation *excluding exceptional items Significant reduction in net debt/EBITDA
Slide 10: Cash Flow
Cash Flow H1 H1 FY 2009 2008 2008 Cash from operations 78,741 55,617 134,369 Interest (20,624) (23,653) (29,220) Tax (10,077) (8,974) (17,974) Investment in existing pubs (4,839) (6,229) (12,323) Investment in own shares (SIP) (4,036) (671) (3,181) Free cash flow 39,165 16,090 71,671 Dividends (10,4
Slide 11: Banking facilities
Banking facilities • New bilateral of £20m from Abbey Santander – Matures December 2010 – Cost similar to USPP • US private placement $140m -£87m – Matures September 2009 – To be repaid out of facilities and free cash flow • UK banking facility £415m – Matures December 2010 – 10 participating lender
Slide 12: Continued Improvement
Continued Improvement • Growth of traditional ales • Over 170 pubs are in the CAMRA Good Beer Guide • Training awards and diplomas • Award winning homegrown products • Energy consumption savings Ongoing improvements in the business
Slide 13: Property
Property • 2008/09 H1 21 new pubs • 2007/08 H1 10 new pubs • 2008/09 FY c35 planned • More favourable property market • Currently 42% freehold • Lower average cost of development Increased opportunities for profitable investment
Slide 14: Current Trading and Outlook
Current Trading and Outlook • Sales in 6 weeks to 8th March 2009. – LFL sales +1.9% – Total sales +5.6% • Tougher comparatives • Cost pressures easing but – Utility – year on year costs higher – Labour costs – Duty increase expected April 2009 • Economic outlook uncertain • Opportunities for profita
Slide 15: Appendices
Appendices • A 10 Year Financial Graphs • B 10 Year Trends • C Capital Trends • D ROC/CROCCE/ROE Calculations • E Net Debt year on year movement
Slide 16: 10 Year Summary
10 Year Summary Appendix A Number of Pubs Average Sales Per Pub Week (including VAT) £000 655 657 671 694 681 714 635 643 630 608 32 30.3 30.1 29.5 29.9 522 30 29.0 28.0 28.2 28 480 428 26.4 26 24.7 23.5 327 24 22.7 330 22 252 19.7 20.4 20 180 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 H
Slide 17: JDW - Financial Trends
Appendix B JDW - Financial Trends H1 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sales per pub (£000) 904 1,004 1,040 1,093 1,169 1,239 1,246 1,283 1,354 1,333 666 EBITDA per pub (£000) (1) 188.0 203.8 205.9 207.4 201.9 204.4 195.7 205.6 219.0 206.8 96.0 Number of pubs 327 428 522 608 635
Slide 18: Capital Trends
Appendix C Capital Trends 2009 Financial Year 2001 2002 2003 2004 2005 2006 2007 2008 YTD Size (sq.ft.) - Openings 3,526 3,808 3,721 4,317 4,176 3,928 3,855 3,615 3,428 Number of openings 94 87 45 28 13 9 18 23 21 % which are freehold 75 53 56 43 54 22 61 57 38 Freehold average cost (£k) 506 597 511
Slide 19: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE H1 H1 2009 2008 £000 £000 Profit after tax (a) 17,348 18,340 Add: interest (b) 16,716 15,949 Profit pre-interest (c) 34,064 34,289 Add: deferred tax (647) 219 Depreciation 22,191 22,994 Cash return (d) 55,608 57,502 • P&L return on capital [(c)/average (g)] 10.5% 10.7% • C
Slide 20: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE H1 FY 2009 2008 £000 £000 Shareholder funds per balance sheet 147,051 180,547 Add: cum losses on disposal 17,747 13,884 : hedging provision 54,571 856 (e) 219,369 195,287 Add: net debt (f) 437,457 442,205 Capital employed (g) 656,826 637,492 Add: deferred tax provision 63,
Slide 21: Movement in Net Borrowings
Movement in Net Borrowings Appendix E Jan 2009 V Jan 2008 Overall decrease in net borrowings of £4.4m (2008: increase of £28.7m) Compared to last half year the difference of £33.1m represents: £m Cash operating profit 0.1 Working capital 23.0 Cash from operations 23.1 Interest 3.0 Tax (1.1) Capital