Slide 1: JD Wetherspoon PLC Interim Results 2011
JD WETHERSPOON PLC Interim Results 2011 11 March 2011
Slide 2: Highlights – Six Months to 23 January 2011
Highlights – Six Months to 23 January 2011 y Turnover up 7.6% to £525.4m y Operating profit up 1.4% to £49.6m y Operating margin down 0.6% to 9.4% y Profit before tax down 11.0% to £32.2m y Earnings per share down 9.1% to 15.9p y Free cash flow per share up 7.2% to 16.4p y Dividend per share 4p (201
Slide 3: Kirk Davis – FD
Kirk Davis – FD
Slide 4: Average Sales Per Pub Week (including VAT)
Average Sales Per Pub Week (including VAT) £000 31.0 30.3 30.5 30.1 30.1 29.9 30.0 29.5 29.0 29.0 28.0 28.2 28.0 27.0 26.4 26.0 24.7 25.0 24.0 23.0 22.0 21.0 20.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 H1 2010 2011 Strongest average pub sales 4
Slide 5: Like for Like Sales/Profits
Like for Like Sales/Profits % H1 2011 H1 2010 H2 2010 2010 2009 2008 2007 Bar +0.6 +0.1 -1.6 -0.8 +2.5 -4.3 +3.3 Food +7.4 -2.1 +2.2 +0.1 -0.4 +7.9 +12.6 Machines -3.8 +14.1 +10.1 +12.1 -7.5 -5.8 +2.7 Total LFL +2.3 +0.1 +0.1 +0.1 +1.2 -1.1 +5.6 sales LFL profits -3.0 +0.5 -4.6 -2.0 -1.7 -6.6 +7.0 L
Slide 6: Operating Margin
Operating Margin y Gross margin broadly maintained – Tax increases absorbed y Staff costs higher – Investment in earlier opening and catering y Operating costs – Investment in enhancements to the operation y Depreciation lower as % of sales Net decrease in underlying operating margin c60 basis point
Slide 7: Operating Margin - Summary
Operating Margin - Summary H1 2011 H1 2011 H1 2010 H1 2010 £000 % of £000 % of Sales Sales Turnover 525,364 488,132 Pub profit (pre repairs) 110,273 21.0 107,125 22.0 Repairs (17,726) (3.4) (16,953) (3.5) Head office costs (19,152) (3.7) (17,604) (3.6) Share Incentive Plan (2,271) (0.4) (1,537) (0.3
Slide 8: Allocation of Resources
Allocation of Resources £161m £123m £108m Dividends £90m £90m Buybacks Capex £59m £56m £39m 2005 2006 2007 2008 2009 2010 H1 H1 2010 2011 Focus on new openings and reinvestment programme 8
Slide 9: Capital Expenditure
Capital Expenditure HY11 HY10 £m £m Acquisition and developments costs Current year 37.8 22.2 Future year 0.5 2.1 New openings 38.3 24.3 Fixtures and fittings 6.6 4.7 Refurbishments 3.6 3.3 IT & related projects 6.4 1.5 Reinvestment 16.6 9.5 Total 54.9 33.8 Investment in new till system and improvin
Slide 10: Movement in Net Debt inc. Finance leases
Movement in Net Debt inc. Finance leases £m y Free cash flow increased to £22.7m FY10 Net debt 388.4 (2010: £21.3m). Free cash flow -22.7 New pub capex 38.3 – Increase in cash from operations Share buy backs 1.2 due to working capital benefits in current period offset by increased Other 0.9 investme
Slide 11: Debt Position
Debt Position H1 H1 FY 2011 2010 2010 Net debt/ EBITDA 2.8 2.7 2.7 Interest cover (times) 2.9 3.9 3.4 Fixed charge cover (times) – statutory 1.6 1.8 1.8 - excluding 2.1 2.4 2.3 depreciation Resilient performance 11
Slide 12: Dividends
Dividends y 4p interim dividend (2010:19p including 7p special dividend) – Dividend cover is 4.0 times – Dividend yield is 0.9% y Paid on 25th May 2011 Dividend reinstated at previous level 12
Slide 13: Financial Summary
Financial Summary y Strong sales result y Operating margin decline reflects ongoing investment and cost pressures y Continued strong cash generation y Strong financial position – facilitating ongoing pub opening programme y Unutilised banking facilities and cash balances of £151.4m as at 23 January
Slide 14: John Hutson - CEO
John Hutson - CEO
Slide 15: Business Update
Business Update y Property y New openings y Continued improvement y Current trading and outlook 15
Slide 16: Property Update
Property Update HY FY 11 10 y Average cost of development £1.12m, up from £849k last half year Trading pubs at start of FY 775 731 Freehold pubs opened 8 15 y Closures as result of a relocation of our unit at Gatwick Airport (South Leasehold pubs opened 6 32 terminal) and one pub in London. Closures
Slide 17: The Green Parrot, Perranporth
The Green Parrot, Perranporth Open Date: 22nd October 2010 Acquired from: private owner Customer Area: 4,533 sq ft Development Costs: £1,293k 17
Slide 18: The Sheaf Island, Sheffield
The Sheaf Island, Sheffield Open Date: 17th September 2010 Acquired from: private owner Customer Area: 4,129 sq ft Development Costs: £1,285k 18
Slide 19: The Foley Arms, Great Malvern
The Foley Arms, Great Malvern Open Date: 7 December 2010 Acquired from: private owner Customer Area: 4,832 sq ft Development Costs: £2,209k 19
Slide 20: Continued Improvement
Continued Improvement y Over 232 pubs are in the CAMRA Good Beer Guide y Record ever coffee sales y Britain’s Top Employers 2011 Award y Raised over £4m for CLIC Sargent (for children with cancer) y 144 Loo Awards y Apprenticeships and under 18 employees y Reinvestment – Aztec, toilets, carpets etc
Slide 21: Current Trading and Outlook
Current Trading and Outlook y Inflation expected in operating costs y Opportunities for profitable investment y Largest ever ale festival expected this spring – Ale festival 23 March – 10 April y LFL sales for the 6 weeks to 6 March 2011 were 2.8% with total sales growth of 7.9% Remain confident of
Slide 22: Appendices
Appendices y A 10 Year Financial Graphs y B 10 Year Trends y C Capital Trends y D ROC/CROCCE/ROE y E ROC/CROCCE/ROE Calculations y F Net Debt year on year movement y G Cash flow 22
Slide 23: 10 Year Summary
Appendix A 10 Year Summary Number of Pubs 775 787 £000 Average Sales Per Pub Week (including VAT) 731 746 750 694 32 30.3 30.1 30.5 671 29.9 30.1 29.5 643 655 657 635 30 29.0 608 28.0 28.2 600 28 26.4 522 24.7 26 23.5 24 450 22 20 300 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2010 H1 2011
Slide 24: JDW - Financial Trends
Appendix B JDW - Financial Trends 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 H1 Sales per pub (£000) 1,093 1,169 1,239 1,246 1,283 1,354 1,333 1,344 1,335 661 674 EBITDA per pub (£000) (1) 207.4 201.9 204.4 195.7 205.6 219.0 211.6 212.9 205.8 96.2 97.6 Number of pubs 608 635 643 655 6
Slide 25: Capital Trends
Appendix C Capital Trends 2010 2011 Financial Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 H1 Size (sq.ft.) - Openings 3,808 3,721 4,317 4,176 3,928 3,855 3,618 3,359 3,781 4,123 3,377 Number of openings 87 45 28 13 9 18 23 39 47 17 14 % which are freehold 53 56 43 54 22 61 57 33 32 12 57 Fr
Slide 26: ROC/CROCCE/ROE
Appendix D ROC/CROCCE/ROE 2011 H1 2010 H1 y P&L return on capital 11.7% 11.5% y CROCCE 10.3% 10.7% y P&L return on equity 15.8% 19.2% y Cash return on equity 11.1% 13.0% 26
Slide 27: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE H1 H1 2011 2010 £000 £000 Profit after tax (a) 22,142 24,375 Add: interest (b) 17,348 12,637 Profit pre-interest (c) 39,490 37,012 Add: deferred tax 313 833 Depreciation 21,557 22,180 Cash return (d) 61,360 60,025 • P&L return on capital [(c)/average (g)] 11.7% 11.5% • CRO
Slide 28: ROC/CROCCE/ROE
Appendix E ROC/CROCCE/ROE H1 FY 2011 2010 £000 £000 Shareholder funds per balance sheet 190,621 162,142 Add: cum losses on disposal 47,817 47,817 : hedging provision 50,346 61,391 (e) 288,784 271,350 Add: net debt (f) 406,101 388,391 Capital employed (g) 694,885 659,741 Add: deferred tax provision 7
Slide 29: Movement in Net Borrowings
Appendix F Movement in Net Borrowings Jan 2011 Vs Jan 2010 Overall increase in net borrowings of £17.7m from July 10 (2010: increase of £2.8m). Compared to last half year, the difference of £ 14.9 m represents: £m Cash operating profit 0.7 Working capital 8.5 Cash from operations 9.2 Interest (1.0)
Slide 30: Cash Flow
Appendix G Cash Flow H1 H1 FY 2011 2010 2010 £000 £000 £000 Free Cash Flow 22,740 21,258 71,347 HMRC Gaming Settlement - - 14,941 Dividends - - (26,174) Proceeds on Disposal - - 170 Investment in new pubs (38,319) (24,319) (57,739) Free cash flow (15,579) (3,061) 2,545 Issue of new shares 77 303 523