Slide 1: J.D. Wetherspoon Plc Interim Announcement 3 March 2004
J.D. Wetherspoon Plc Interim Announcement 3 March 2004
Slide 2: Highlights - Six Months to 25 January 2004
Highlights -Six Months to 25 January 2004 • Turnover up 11% to £389.0m • Operating profit up 10% to £38.6m • Profit before tax up 9% to £27.8m • Earnings per share up 15% to 9.0p • Free cash flow per share up 15% to 21.7p • Dividend per share increased by 10% to 1.33p 1
Slide 3: Average Sales Per Pub Week (including VAT)
Average Sales Per Pub Week (including VAT) £000 29 27.7 26.4 27 24.7 25 23.5 22.7 23 20.4 21 19 17 15 1999 2000 2001 2002 2003 2004 H1 2
Slide 4: Like For Like Sales
Like For Like Sales % H1 Year Year Year Year Year 2004 2003 2002 2001 2000 1999 Bar 4.9 2.1 3.5 6.2 13.8 11.6 Food 4.0 11.4 9.9 11.4 8.1 (2.1) Total Sales 4.8 4.1 5.0 7.5 12.4 8.6 LFL Profits 4.5 (0.9) 3.8 7.0 13.0 10.1 3
Slide 5: Trading
Trading • Product range • Airport expansion • Breakfasts/early opening 4
Slide 6: People
People • Diploma in Licensed Retailing – Nottingham Trent University – 80 Candidates – All Pub Managers Eligible • 50% Recruitment Now On-Line 5
Slide 7: Management Team
Management Team • Operational board (16 people) – Aged between 31 and 43 (average 37) – Length of service between 3 and 13 years (average 8) – 75% with University degrees • Additional 30 senior and 109 middle managers 6
Slide 8: Cost Base
Cost Base • Purchasing initiatives – AWP/SWP machine rent – Crockery/napkins/kitchen paper – Self fill cash dispensers • Cost increases – Food ingredients – Utilities • Distribution plans 7
Slide 9: The Saracen's Head Inn, Daventry
The Saracen’s Head Inn, Daventry 8
Slide 10: The Saracen's Head Inn, Daventry
The Saracen’s Head Inn, Daventry 9
Slide 11: The Saracen's Head Inn, Daventry
The Saracen’s Head Inn, Daventry 10
Slide 12: Gatehouse, Chichester (Lloyds)
Gatehouse, Chichester (Lloyds) 11
Slide 13: Gatehouse, Chichester (Lloyds)
Gatehouse, Chichester (Lloyds) 12
Slide 14: Gatehouse, Chichester (Lloyds)
Gatehouse, Chichester (Lloyds) 13
Slide 15: New Pub Sales Performance
New Pub Sales Performance • 2000/01 Pubs Sales £26.1k (+6.1%) • 2001/02 Pubs Sales £29.6k (+8.8%) • 2002/03 Pubs Sales £31.6k (+14.5%) • 2003/04 Pubs Sales £32.5k Sales per week including VAT 14
Slide 16: Pub Operating Margins (%)
Pub Operating Margins (%) H1 H1 Year 2004 2003 2003 Gross margin 62.9 62.4 62.7 Staff costs (24.9) (24.5) (24.5) Other pub costs (16.8) (16.2) (16.3) Pub operating profit 21.2 21.7 21.9 15
Slide 17: Operating Margins - Summary
Operating Margins - Summary H1 H1 Year 2004 2003 2003 £000 % of £000 % of £000 % of Sales Sales Sales Turnover 388,964 - 350,606 - 730,913 - Pub Operating Profit 82,527 21.2 75,954 21.7 160,030 21.9 Sale & leaseback rentals (4,021) (1.1) (3,861) (1.1) (7,801) (1.0) Head Office Costs (18,058) (4.6) (
Slide 18: Cash Flow
Cash Flow H1 2004 H1 2003 £000 £000 Cash from operations 69,289 62,395 +11% Interest and tax (17,168) (12,537) Investments in existing pubs (8,148) (9,220) Free cash flow available for 43,973 40,638 +8% new pub development Dividends (4,700) (4,334) Investment in own shares - (153) Disposal proceeds
Slide 19: Pub Investment Levels
Pub Investment Levels H1 2004 2003 2002 2001 2000 1999 Capital re-investment 2.1 2.2 3.1 3.3 3.9 3.3 Repairs 2.9 2.7 2.5 1.8 1.3 1.4 Total (% of sales) 5.0 4.9 5.6 5.1 5.2 4.7 Total (£k per pub) 61 58 62 53 52 42 *H1 annualised 18
Slide 20: Financial - Funding
Financial - Funding H1 H1 Year 2004 2003 2003 Gearing (%) – post FRS19 103 97 97 – pre FRS19 85 82 81 Interest cover (times) 3.6 3.7 4.0 Fixed charge cover (times) - statutory 1.8 1.9 1.9 - excluding 2.5 2.6 2.7 depreciation Revised £250m banking facility (total facilities £418m) 19
Slide 21: Underlying Economic Profits
Underlying Economic Profits H1 H1 2004 2003 £’000 £’000 PBT 27,822 25,611 Add: Depreciation 21,887 21,308 Less: Capital invested in existing pubs (8,148) (9,220) Economic profit 41,561 37,699 +10% Cash tax (6,858) (5,230) Economic profit after tax on cash basis 34,703 32,469 +7% 20
Slide 22: ROC/CROCCE/ROE
ROC/CROCCE/ROE H1 H1 2004 2003 • P&L return on capital 9.2% 8.3% • Crocce 12.7% 12.4% • P&L return on equity 11.5% 10.5% • Cash return on equity 16.0% 16.2% Detailed calculations included in appendix D 21
Slide 23: Financial Issues
Financial Issues • Exceptional loss • Share buybacks • Share option replacement 22
Slide 24: Pipeline
Pipeline • H1 openings 8 • February 2004 3 • Full year target 30 • On site 12 • With planning and licensing 26 • Terms agreed 9 • In discussions 115 23
Slide 25: Prospects
Prospects • February trading (3.9% LFL Sales) • Licensing reform/smoking debate/gaming reform • Continuing cost pressures • Strong cash generation • Continued growth prospects 24
Slide 26: Appendices
Appendices A - 10 Year Financial Graphs B - 10 Year Trends C - Capital Trends D – ROC/CROCCE/ROE Calculations 25
Slide 27: 10 Year Summary
Appendix A 10 Year Summary Average Sales Per Pub Week (including VAT) Number of Pubs £000 700 635 633 27.7 608 28 26.4 600 24.7 522 26 23.5 24 22.7 500 428 22 19.7 20.4 19.2 400 20 327 17.8 18 15.9 300 252 16 194 200 146 14 110 12 100 10 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004H1 0 56.1 199
Slide 28: JDW - Financial Trends
Appendix B JDW - Financial Trends H1 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Sales per pub (£000) 619 702 786 848 872 904 1,004 1,040 1,093 1,169 1,225 EBITDA per pub (£000) (1) 135.6 149.5 177.6 190.8 184.9 188.0 203.8 205.9 207.4 201.9 203.8 Number of pubs 87 110 146 194 252 327 428
Slide 29: Capital Trends
Appendix C Capital Trends H1 1998 1999 2000 2001 2002 2003 2004 Size (sq.ft.) – openings 3,401 3,037 3,217 3,713 3,808 3,721 3,977 Number of openings 68 84 101 94 87 45 8 % which are freehold 49 58 67 75 53 56 25 Freehold average cost (£k) 463 427 465 506 597 511 405 Average development cost (£k) 96
Slide 30: ROC/CROCCE/ROE
Appendix D ROC/CROCCE/ROE H1 H1 2004 2003 £000 £000 Profit after tax (e) 18,285 16,698 Add: interest (f) 10,739 9,402 Profit pre-interest (g) 29,024 26,100 Add: deferred tax 2,679 3,683 Depreciation 21,887 21,308 Cash return (h) 53,590 51,091 Half 1 Annualised • P&L return on capital [(g)/average (c
Slide 31: ROC/CROCCE/ROE
Appendix D ROC/CROCCE/ROE H1 July 2004 2003 £000 £000 Shareholder funds per balance sheet (a) 305,790 318,628 Add: cum losses on disposal 7,959 2,351 Add: net debt (b) 313,758 308,860 Capital employed (c) 619,548 627,488 Add: deferred tax provision 63,555 62,419 Cumulative depreciation 185,819 169,3