Slide 1: JD Wetherspoon PLC Preliminary Results 2012
JD WETHERSPOON PLC Preliminary Results 2012 14 September 2012 Kirk Davis – FD John Hutson - CEO
Slide 2: Highlights – Year to 29 July 2012
Highlights – Year to 29 July 2012 Excluding Week 53 • Revenue £1,197.1m (2011: £1,072.0m) + 11.7% +9.3% • Like-for-like sales + 3.2% • Free cash flow £91.5m (2011: £78.8m) +16.1% • Free cash flow per share 73.2p (2011: 59.7p) + 22.6% Before exceptional items: • Operating profit £107.3m (2011: £102.3
Slide 3: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) £000 33 32.3 32 31.1 31 30.3 30.1 30.1 29.9 30 29.0 29 28.0 28.2 28 27 26.4 26 24.7 25 24 23 22 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Record Average Sales Per Pub Week 3
Slide 4: Profit before Tax & Exceptional Items
Profit before Tax & Exceptional Items £m 75 72.4 71.0 70 66.2 66.8 65 62.0 60 58.4 58.2 56.1 53.6 54.1 55 50 47.2 45 40 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Record Profit Performance 4
Slide 5: Earnings per Share before exceptional items (pence)
Earnings per Share before exceptional items (pence) 45 41.3 40 36.0 35.3 35 32.6 30 28.1 27.6 24.1 25 20 17.0 17.7 16.6 16.9 15 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Record Earnings Per Share Growth 5
Slide 6: Like-for-Like Sales/Profit
Like-for-Like Sales/Profit % 2012 2011 2010 2009 2008 2007 Bar +2.8 +1.7 -0.8 +2.5 -4.3 +3.3 Food +4.8 +4.2 +0.1 -0.4 +7.9 +12.6 Machines -2.8 -3.9 +12.1 -7.5 -5.8 +2.7 LFL sales +3.2 +2.1 +0.1 +1.2 -1.1 +5.6 LFL profits -2.2 -1.2 -2.0 -1.7 -6.6 +7.0 Pressure on LFL pub profit from increased costs a
Slide 7: Operating Margin - Summary
Operating Margin - Summary 2012 2012 2011 2011 £000 % of £000 % of Sales Sales Turnover 1,197,129 - 1,072,014 - Pub profit (pre repairs) 245,466 20.5 226,640 21.1 Repairs (44,575) (3.7) (37,275) (3.5) Head office costs (38,686) (3.2) (37,598) (3.5) Share Incentive Plan (5,721) (0.5) (5,062) (0.5) De
Slide 8: Cost Increases
Cost Increases y Tax increases on VAT and Duty y Bar and food supplies y Utility costs y Carbon tax y Investment in repairs 8
Slide 9: Exceptional Items – Summary
Exceptional Items – Summary 2012 2011 £000 £000 Property Impairment 7,823 4,410 Loss on disposal of P,P&E 1,062 979 Write-off of IT related assets 1,742 - Onerous lease provision 2,229 - Restructuring 625 - Total 13,481 5,389 Cash charge of £0.6m in the year 9
Slide 10: Allocation of Resources
Allocation of Resources £90m £123m £161m £90m £59m £108m £164m £159m £10m £5m £15m £33m £7m £23m £76m £26m Dividends £8m £17m £78m £126m Buybacks £12m £121m Capex £43m £10m £82m £75m £61m £49m £39m £38m 2005 2006 2007 2008 2009 2010 2011 2012 Continued expenditure on new openings, reinvestment and s
Slide 11: Capital Expenditure
Capital Expenditure FY12 FY11 £m £m Acquisition and developments costs Current year 65.0 78.6 Future year 10.4 9.0 New openings 75.4 87.6 Fixtures and fittings 22.5 13.4 Refurbishments 11.6 9.8 IT & related projects 11.1 15.2 Reinvestment 45.2 38.4 Total 120.6 126.0 Continued investment in new openi
Slide 12: Movement in Net Debt inc. Finance leases
Movement in Net Debt inc. Finance leases y Free cash flow increased to £91.5m (2011: £78.8m). £m FY11 Net debt 437.7 – Increase in cash from operations due to working capital benefits in the year and Free cash flow (91.5) approximately £15.0m of one-off timing benefits that are expected to reverse.
Slide 13: Debt Position
Debt Position 2012 2011 y Net debt/ EBITDA 2.96 2.98 y Interest cover (times) 2.68 2.73 y Interest cover pre-exceptional (times) 3.07 2.88 y Fixed charge cover (times) - statutory 1.57 1.62 - excluding depreciation 2.05 2.06 - excluding depreciation and exceptionals 2.18 2.12 13
Slide 14: Dividends
Dividends y 12p total dividend (2011: 12p) – 8p full year dividend proposed – 4p interim dividend paid – Dividend cover excluding exceptional items is 3.0 times (2011: 3.0 times) 14
Slide 15: Financial Summary
Financial Summary y Reasonable sales result y Cost increases relating to tax, utilities, bar and food supplies, and labour. y Strong cash generation y Unutilised banking facilities and cash balances of £128.5m as at 29 July 2012 (July 2011: £120.2m) 15
Slide 16: Business Update
Business Update y Property update y New openings y Market research y Broad customer base y People y Taxation y Current trading and outlook 16
Slide 17: Property Update
Property Update FY12 FY11 Trading pubs at start of FY 823 775 y Average cost of development £1.42m, compared to £1.21m last year. Freehold pubs opened 18 34 Leasehold pubs opened 22 16 y Closures as result of a lease expiry at our Gatwick Airport unit (North Closures/Disposals -3 -2 terminal) and at
Slide 18: The Bear, Melksham
The Bear, Melksham Open date: 15 May 2012 Acquired from: Wadworth & Co Customer Area: 3,437 sq ft Development Costs: £1,519k 18
Slide 19: The Queen's Picture House, Waterloo, Merseyside
The Queen’s Picture House, Waterloo, Merseyside Open Date: 17 April 2012 Acquired from: Independent owner Customer Area: 3,864 sq ft Development Costs: £1,309k 19
Slide 20: The Guildhall & Linen Exchange, Dunfermline
The Guildhall & Linen Exchange, Dunfermline Open Date: 10 July 2012 Acquired from: Independent owner Customer Area: 3,475 sq ft Development Costs: £1,165k 20
Slide 21: Market research: Britain's favourite big brand
Market research Britain’s favourite big brand If the following brands were available in the same location, which would be your first choice to eat at? (ranked by % of adults choosing each brand) (out of a list of 15 – the top 6 ) Nando’s 10.8% Wetherspoons 10.4% Pizza Hut 8.4% Harvester 8.0% Frankie
Slide 22: Broad customer base
Broad customer base y 45:55 split male/female y 25-34 (25%) – but with a further 52% aged 35-64 and 17% aged 18-24 y White collar factor: 42% ABs, 52% ABC1 y Customer base spread over the country y 12% use weekly; 41% at least monthly y 34% use for lunch; 38% early eve; 11% after 8pm y Friday & Satu
Slide 23: People & Training
People & Training • Company employs over 28,500 people in full and part-time positions. An increase of over 2,500 jobs in the last 12 months • Comprehensive award winning employee training. Over 11,500 training days completed last year • Staff retention at its highest ever level. Average length of s
Slide 24: Taxation
Taxation 2012 2011 Full Year Full Year £m £m VAT 241.2 204.8 Alcohol duty 136.8 120.2 PAYE and NIC 67.1 65.2 Business rates 43.9 39.8 Corporation tax 18.2 21.2 Machine duty 3.3 2.9 Fuel duty 1.9 1.9 Carbon tax 2.4 0.8 Climate change levy 1.9 1.6 Stamp duty 0.8 1.1 Landfill tax 1.3 1.1 Premise licenc
Slide 25: Current Trading and Outlook
Current Trading and Outlook y Continued pressure expected from Government legislation – excise duty, machine gaming duty and late night levy y Inflation expected in bar and food supplies, labour and utilities y Opportunities for profitable investment in new openings and existing pubs Confident of a
Slide 26: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the 6 weeks to 9th September increased by 8.4% with total sales increasing by 12.8% • Retail standards • 98% of our pubs our Cask Marque approved • 256 pubs recommended in CAMRA 2013 Good Beer Guide • 235 pubs recognised in the 2011 Loo of the Year awards
Slide 27: Appendices
Appendices A - 10 year summary graphs B - Financial trends C - Capital trends D - ROC/CROCCE/ROE calculations E - Cash flow F - Summary accounts H - Swap maturity profile 27
Slide 28: 10-Year Summary
Appendix A 10-Year Summary 900 Number of Pubs 860 Average Sales Per Pub Week (including VAT) 823 775 £000 800 731 694 32.3 655 657 671 32 700 635 643 31.1 30.3 30.1 29.9 30.1 600 30 29.0 28.0 28.2 500 28 26.4 400 26 300 24 200 22 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006
Slide 29: Financial Trends
Appendix B Financial Trends 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sales per pub (£000) 1,169 1,239 1,246 1,283 1,354 1,333 1,344 1,335 1,360 1,401 EBITDA per pub (£000) (1) 201.9 204.4 195.7 205.6 219.0 211.6 212.9 205.8 198.7 194.9 Number of pubs 635 643 655 657 671 694 731 775 823 860
Slide 30: Capital Trends
Appendix C Capital Trends 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average size (sq.ft.) – openings 3,721 4,317 4,176 3,928 3,855 3,618 3,359 3,781 3,572 3,325 Number of openings 45 28 13 9 18 23 39 47 50 40 % which are freehold 56 43 54 22 61 57 33 32 68 45 Freehold average cost (£k) 511 6
Slide 31: ROC/CROCCE/ROE
Appendix D ROC/CROCCE/ROE 2012 2011 y P&L return on capital 12.4% 12.7% y Crocce 10.5% 10.5% y P&L return on equity 19.6% 18.9% y Cash return on equity 12.0% 11.5% Detailed calculations in appendix D1 31
Slide 32: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2012 2011 £000 £000 Profit after tax 44,567 46,792 Add: exceptional items 12,758 5,389 Underlying PAT (e) 57,325 52,181 Add: interest (f) 34,955 35,528 Profit pre-interest (g) 92,280 87,709 Deferred tax (credit) / charge (3,500) (4,569) Depreciation 49,166 44,396 Cash retu
Slide 33: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2012 2011 £000 £000 Shareholders’ funds per balance sheet 169,644 171,045 Add: exceptional items 65,965 53,206 : hedging provision 66,029 57,880 (a) 301,638 282,131 Add: net debt (b) 462,611 437,693 Capital employed (c) 764,249 719,824 Add: deferred tax provision 67,860 71
Slide 34: Cash Flow
Appendix E Cash Flow 2012 2011 £’000 £’000 Cash from operations 196,733 178,197 Interest and tax (54,210) (55,196) Investment in existing pubs (45,225) (38,400) Investment in own shares (SIP) (5,756) (5,783) Free cash flow 91,542 78,818 Dividends (15,544) (5,211) Disposal proceeds 887 1,100 Investme
Slide 35: Summary financial performance
Appendix F Summary financial performance Profit Earnings before tax per share Free cash Free cash Total sales and before flow per flow Financial exceptional exceptional share year items items £000 £000 pence £000 pence 1984 818 (7) 0.0 1985 1,890 185 0.2 1986 2,197 219 0.2 1987 3,357 382 0.3 1988 3,
Slide 36: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average Value £400m 31 July 2009 12 Nov 2014 5.3% £400m 12 Nov 2014 31 Jul 2016 3.5% £400m 31 Jul 2016 31 Jul 2018 2.2% 36