Slide 1: JD Wetherspoon plc Interim Announcement
JD Wetherspoon plc Interim Announcement 1 March 2002
Slide 2: Highlights - Six Months to 27 January 2002
Highlights -Six Months to 27 January 2002 Turnover £285.2m +26% Pre tax profits £24.9m +22% EPS (9.8p excluding deferred taxation) 7.7p +20% Cashflow per share 17.5p +19% Dividend 1.1p +10% 2
Slide 3: Openings - First Half 2002 (35)
Openings- First Half 2002 (35) M25 Northern Ireland South East Heathrow Airport Enniskillen Andover London (Goodmans Field) Lisburn Chelmsford Gatwick Airport Midlands North West Hastings Bedworth Altrincham Norwich Biddulph Fleetwood Portsmouth Mansfield Lancaster X 2 Milton Keynes Liverpool Workin
Slide 4: Five Year View: Average Sales Per Pub Week
Five Year View Average Sales Per Pub Week (including VAT) £000 23.5 24.0 25.0 22.7 19.7 20.4 20.0 15.0 10.0 5.0 0.0 1998 1999 2000 2001 2002 YTD 4
Slide 5: Like For Like Sales Record
Like For Like Sales Record % 1st Half Full Year Full Year Full Year 2002 2001 2000 1999 Bar 3.9 6.2 13.8 11.6 Food 10.2 11.4 8.1 (2.1) Total 5.5 7.5 12.4 8.6 5
Slide 6: Trading - Bar
Trading - Bar FOUR PLAY ALE OF THE CENTURY per pint SV Tae 7" "ry, * CASK . o MARQUE , we e “ear. sy yee Subject to availability. Participating frechouses. Visit our Web site: www.dwetherspoon.co.uk
Slide 7: Food Development
Food Development • 10% LFL food sales growth • Gross Margin +2% 7
Slide 8: Lloyds No. 1
Lloyds No. 1 • Original 10 - sales per week £25.3k (+65%) • Original 10 - return on investment 19.2% • 2000/01 openings 4 • First half 2002 openings 6 • Total estate 20 • Future development 8
Slide 9: The Palladium, Llandudno
The Palladium, Llandudno 6,000 square feet Average sales per week £37,000 9
Slide 10: The King's Highway, Inverness
The King’s Highway, Inverness 4,600 square feet Average sales per week £38,000 10
Slide 11: The Henry Bessemer, Workington
The Henry Bessemer, Workington 3,500 square feet Average sales per week £20,000 11
Slide 12: The Tuesday Bell, Lisburn, Northern Ireland
The Tuesday Bell, Lisburn, Northern Ireland 3,700 square feet Average sales per week £39,000 12
Slide 13: Lloyds No. 1, Chelmsford
Lloyds No. 1, Chelmsford Average sales per week £32,000 3,600 square feet 13
Slide 14: Staff Pay Rates
Staff Pay Rates Hourly pay comparison versus competition* Bar (including bonus) - inside London +25% - outside London +24% Kitchen (including bonus) - inside London +35% - outside London +32% *Retail salary club survey July 2001 14
Slide 15: Staff and Standards
Staff and Standards • People - 48 hour week - pub bonus schemes (£10m cost in 2000/01) - training (regional centres / awards) • Standards - mystery visitors (£1m cost) - Egon Ronay food inspections and environmental health inspections (£1.2m cost) - toilets (hourly checks / awards) - investment in m
Slide 16: Operating Margins - Summary
Operating Margins - Summary 2002 2001 2001 First Half First Half Full Year £000 % of £000 % of £000 % of Sales Sales Sales Turnover 285,178 - 226,694 - 483,968 - Pub Operating Profit 68,506 24.0 55,920 24.7 119,559 24.7 Sale & leaseback rentals (3,860) (1.3) (3,858) (1.7) (7,717) (1.6) Head Office C
Slide 17: Pub Operating Margins
Pub Operating Margins First First Half Half 2002 2001 Gross margin 62.3% 62.4% Staff costs 23.7% 23.0% Other pub costs (rent, rates, utilities) 14.6% 14.7% Pub operating profit 24.0% 24.7% 17
Slide 18: LFL Trends - Pubs Opened In Each Year
LFL Trends - Pubs Opened In Each Year Total 1999/00 1998/99 1997/98 1996/97 and prior Like for like 5.5 12.8 5.2 4.4 2.2 sales growth (%) Like for like 4.0 20.2 9.3 2.6 -2.8 profit growth (%) Number of pubs 375 97 77 66 135 1996/97 and prior • 50% within London • Investment in wages • Improving sale
Slide 19: New Pub Performance
New Pub Performance 2000/01 Pubs z Sales £21.8k (first year’s sales £20.8k) z Pub returns - freehold 13% - leasehold 22% 2001/02 Pubs z Sales £24.7k Weekly sales include VAT 19
Slide 20: Cash Flow
Cash Flow First Half First Half 2002 2001 £000 £000 Cash from operations 54,355 47,069 Interest and tax (10,103) (6,759) Investments in existing pubs (7,121) (9,335) Free cash flow available for 37,131 30,975 +20% new pub development Dividends (2,810) (2,990) Investment in own shares - (241) Issue o
Slide 21: Capital Re-Investment
Capital Re-Investment 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 (First half) % of Sales 2.5 3.3 3.9 3.3 5.0 3.0 3.1 Examples of expenditure this year are: - IT £1.7m - Kitchen PC screens £0.8m - Clam griddles £1.0m 21
Slide 22: Financial - Funding
Financial - Funding First First Full Half Half Year 2002 2001 2001 Gearing (%) – post FRS19 93 79 88 – pre FRS19 79 68 75 Interest cover (times) 3.9 4.1 4.2 Fixed charge cover (times) - statutory 2.0 1.9 2.0 - excluding 2.7 2.6 2.7 depreciation 22
Slide 23: Underlying Economic Profits
Underlying Economic Profits First Half First Half 2002 2001 £’000 £’000 PBT 24,885 20,468 Add: Depreciation 17,504 13,883 Less: Capital invested in existing pubs (7,121) (9,335) Economic profit +41% 35,268 25,016 % Sales 12.4% 11.0% Economic profit after tax* +31% 31,281 23,788 *Based on actual tax
Slide 24: Return on Capital and Equity
Return on Capital and Equity Jan 2002 Jan 2001 Shareholders funds* 345,931 301,504 Net debt 271,853 205,502 Revaluation reserve (23,734) (24,158) 594,050 482,848 Average for 6 months 566,723 455,178 ROC (after cash tax) 14.1% 13.4% ROE (after cash tax) 20.2% 17.8% *Excluding provision for deferred t
Slide 25: Pipeline
Pipeline Jan July 2002 2001 On site 39 25 With planning/licensing 45 61 Terms agreed 50 65 In negotiation 227 170 361 321 Opened since half year end 6 25
Slide 26: Prospects
Prospects • February trading • Continued food development • Lloyds expansion • Competitive environment • Continued earnings growth 26
Slide 27: Appendices
Appendices A - 5 year view - number of pubs B - 10 year trends C - capital trends 27
Slide 28: Five Year View - Number of Pubs
Five Year View - Number of Pubs Appendix A 600 522 556 500 428 400 327 300 252 200 100 0 1998 1999 2000 2001 2002 (YTD) 28
Slide 29: JDW - The Last 10 Years
Appendix B JDW - The Last 10 Years 1993 1994 1995 1996 1997 1998 1999 2000 2001 First half 2002 Sales per pub (£000) 577 619 702 786 848 872 904 1,004 1,040 1,062 Wage costs (%) 18.8 18.0 18.3 19.6 20.4 20.1 20.1 22.1 23.0 23.7 EBITDAmargin (%) (1) 22.8 21.9 21.3 22.6 22.5 21.2 20.8 20.3 19.8 19.2 E
Slide 30: Capital Trends
Capital Trends Appendix C First Half 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 Size (sq.ft.) – openings 3,800 3,401 3,037 3,217 3,526 3,588 Number of openings 48 68 84 101 94 35 % which are freehold 23 49 58 67 75 57 Freehold average cost (£k) 665 463 427 465 506 521 Average development cost (