Slide 1: Preliminary Results 2013
2013 Preliminary Results John Hutson – CEO Kirk Davis – FD John the Clerk of Cramlington, Cramlington
Slide 2: Kirk Davis FD
Kirk Davis FD The Clothier Inn, Yeadon The Clothier Inn, Yeadon 13 September 2013
Slide 3: Financial Summary
Financial Summary 52 weeks to 28/07 2013 2012 Excluding Week 53 Revenue £1,280.9m £1,197.1m +7.0% +9.3% Like-for-like sales +5.8% +3.2% Operating profit £111.3m £107.3m +3.7% +6.0% Profit before tax £76.9m £72.4m +6.3% +8.8% Earnings per share (excluding shares held in trust) 46.8p 41.3p +13.3% +15.
Slide 4: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) Record Average Sales Per Pub Week 4
Slide 5: Profit before Tax & Exceptional Items
Profit before Tax & Exceptional Items Record PBT (pre-exceptional) performance 5
Slide 6: Earnings Per Share before exceptional items (pence)
Earnings Per Share before exceptional items (pence) Record EPS (pre-exceptional) performance 6
Slide 7: Like-for-like Performance
Like-for-like Performance % 2013 2012 2011 2010 2009 2008 2007 Bar +3.8 +2.8 +1.7 -0.8 +2.5 -4.3 +3.3 Food +10.9 +4.8 +4.2 +0.1 -0.4 +7.9 +12.6 Machines +0.4 -2.8 -3.9 +12.1 -7.5 -5.8 +2.7 LFL sales +5.8 +3.2 +2.1 +0.1 +1.2 -1.1 +5.6 LFL Profit +4.4 -2.2 -1.2 -2.0 -1.7 -6.6 +7.0 Improved LFL pub pro
Slide 8: Operating Margin - Summary
Operating Margin - Summary 2013 2013 2012 2012 £m % of Sales £m % of Sales Turnover 1,280.9 - 1,197.1 - Pub profit (pre repairs) 260.2 20.3 245.5 20.5 Repairs (48.0) (3.7) (44.6) (3.7) Head office costs (41.7) (3.3) (38.7) (3.2) Share Incentive Plan (6.1) (0.5) (5.7) (0.5) Depreciation (53.1) (4.1)
Slide 9: Cost Increases
Cost Increases The Mount Stuart, Cardiff • Tax increases: excise duty, business rates and machine duty • Bar and food supplies: 3% to 4% • Increased bonuses • Utility costs: +8% (price 3% and consumption 5% including new pubs) 9
Slide 10: Exceptional Items - Summary
Exceptional Items - Summary 2013 2012 £000 £000 Property impairment 15,551 7,823 Onerous lease provision 3,278 2,229 Loss on disposal of P, P&E 971 1,062 Write-off of IT related assets - 1,742 Restructuring - 625 Total 19,800 13,481 £200k cash charge in the year 10
Slide 11: Allocation of Resources
Allocation of Resources £123m £161m £90m £59m £108m £164m £159m £117m Reduction in capital expenditure due to fewer new openings 11
Slide 12: Capital Expenditure
Capital Expenditure 2013 2012 £m £m New Openings: Acquisition and development costs Current year 48.1 65.0 Future year 12.8 10.4 60.9 75.4 Reinvestment: Fixtures and fittings 16.7 22.5 Refurbishments 12.8 11.6 Business and IT projects 11.4 11.1 40.9 45.2 Total 101.8 120.6 Continued investment in the
Slide 13: Movement in Net Debt inc. Finance leases
Movement in Net Debt inc. Finance leases £m • Free cash flow decreased to £65.3m FY12 Net debt 462.6 (2012: £91.5m) due to a working capital Free cash flow (65.3) outflow of £6.0m in the year compared to an inflow of £35.5m in the previous Disposal of fixed assets (0.6) year New pub capex 60.9 • Tot
Slide 14: Debt Position
Debt Position 2013 2012 Net debt/EBITDA 2.88 2.96 Interest cover (times) 2.66 2.68 Interest cover pre exceptional (times) 3.24 3.07 Fixed charge cover (times) statutory 1.56 1.57 excluding depreciation 2.08 2.05 excluding depreciation and exceptionals 2.27 2.18 Average interest rate 6.83% 6.71% 14
Slide 15: Banking Facilities
Banking Facilities • Unutilised banking facilities and cash balances of £111.0m as at 28 July 2013 (2012: £128.5m) • Amendment and restatement of existing facility completed on 30th July. – Now runs until 31 March 2018 – Total facilities (including overdraft) increased to £690m from £575m • Mark to
Slide 16: Dividends
Dividends • 12p total dividend (2012: 12p) – 8p full year proposed – 4p interim dividend paid – Dividend cover excluding exceptional items is 3.2 times (2012: 3.0 times) • Dividend maintained The Avion, Aldridge 16
Slide 17: Financial Summary
Financial Summary • Solid sales and financial performance • Slight operating margin decline: increased LFL pub profits The Kings Head Hotel, Beccles • Continued strong cash generation The Kings Head Hotel, Beccles 17
Slide 18: John Hutson CEO
wetherspoon~ John Hutson CEO
Slide 19: Business Update
Business Update • Property • People • Market update The Angel Hotel, Whitby • Continued improvement • Cost outlook • Taxation • Current trading and outlook The Angel Hotel, Whitby 19
Slide 20: Property Update
Property Update • Average cost of development £1.55m, FY FY compared to £1.42m last year 13 12 • 1 pub opened as of 13 September 2013 Trading pubs at start of FY 860 823 Freehold pubs opened 14 18 • 13 pubs on site as of 13 September 2013 Leasehold pubs opened 15 22 • As previously mentioned we anti
Slide 21: “It’s a People Thing”
“It’s a People Thing” • 185 employees completed catering academy • Over 1,250 employees on an apprenticeship programme • Diploma & Degree programme (Leeds Metropolitan University) • 310 employees have completed Professional Diploma in Leisure Retail Management • 70 Managers have completed Degree • S
Slide 22: 10 Year Sales Performance
10 Year Sales Performance Strong sales growth 22
Slide 23: Changing Sales Mix Over Last 10 Years
Changing Sales Mix Over Last 10 Years Long-term growth in food mix 23
Slide 24: Britain’s favourite big brand
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) The Nightjar, (out of a list of 16 – the top 6 ) Ferndown May 2012 October 2012 April 2013 Wetherspoons 10% 11% 11% Nando
Slide 25: Market Update
Market Update 2 Where we sit down and eat - BRITAIN’S MOST VISITED PUB & CASUAL DINING BRANDS Claimed usage in last 6 months May 12 Oct 12 Apr 13 Wetherspoons 44% 40% 43% Pizza Hut 41% 30% 32% Harvester 29% 28% 28% Nandos 26% 20% 23% Pizza Express 26% 22% 21% Frankie & Benny's 25% 19% 21% Toby 16% 1
Slide 26: Continued Improvement
Continued Improvement • 283 pubs in 2014 CAMRA Good Beer Guide. 32% of the estate compared with 20% of estate in 2007 • Raised £1.6m in the year and over £7.6m during our 11 year partnership with CLIC Sargent (for children with cancer) • Loo Awards – UK Winner (Individual Category entries) – Nationa
Slide 27: Cost Outlook
Cost Outlook • Tax increases: excise duty, business rates and machine duty Burger and chips • Input cost inflation expected to be around 3% or so in the coming year • Continued investment in staffing to support our growth in food Superfood Pasta • Continue to focus on maintaining a well-invested est
Slide 28: Taxation
Taxation 2013 £m 2012 £m VAT 253.0 241.2 Alcohol duty 144.4 136.8 PAYE and NIC 70.2 67.1 Business rates 46.4 43.9 Corporation tax 18.4 18.2 Machine duty 7.2 3.3 Climate change levies 4.3 1.9 Fuel duty 2.0 1.9 Carbon tax 2.6 2.4 Stamp duty 1.0 0.8 Landfill tax 1.3 1.3 Premise licence and TV licences
Slide 29: Tax Parity Day – 25th September 2013
Tax Parity Day – 25th September 2013 • Over 10,000 pubs have closed in the last 10 years. 50% of beer sales have been lost to supermarkets in the last 30 years or so. • 7.5% reduction in JDW prices to customers for one day • 10,000-15,000 pubs and restaurants participating including Punch, Fullers,
Slide 30: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the 6 weeks to 8th September increased by 3.6% with total sales increasing by 7.8%. In the last 2 weeks LFL’s were 2.5% • Increases expected in bar and food supplies, labour and utilities • Opportunities to expand the estate profitably Aiming for a reasona
Slide 31: Appendix
wetherspoon Appendix
Slide 32: Appendices
Appendices Pork, leek & chive sausages A 10 year overview B 10 year financial trends C 10 year capital trends D1 ROC/CROCCE/ROE calculations D2 ROC/CROCCE/ROE calculations D3 ROC/CROCCE/ROE calculations E Cash flow F Summary financial performance Ice Cream Sundae’s G SWAP maturity profile 32
Slide 33: 10 Year Overview
Appendix A 10 Year Overview 33
Slide 34: 10 Year Financial Trends
Appendix B 10 Year Financial Trends 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sales per pub (£000) 1,239 1,246 1,283 1,354 1,333 1,344 1,335 1,360 1,401 1,476 EBITDA per pub (£000) (1) 204.4 195.7 205.6 219.0 211.6 212.9 205.8 198.7 194.9 200.9 Number of pubs 643 655 657 671 694 731 775 823
Slide 35: 10 Year Capital Trends
Appendix C 10 Year Capital Trends 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Size (sq.ft.) – Openings 4,317 4,176 3,928 3,855 3,618 3,359 3,781 3,572 3,325 3,643 Number of openings 28 13 9 18 23 39 47 50 40 29 % which are freehold 43 54 22 61 57 33 32 68 45 48 Freehold average cost (£k) 640 8
Slide 36: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2013 2012 P&L return on capital 12.6% 12.4% CROCCE 10.3% 10.5% P&L return on equity 20.2% 19.6% Cash return on equity 11.8% 12.0% Detailed calculations in appendix D2 36
Slide 37: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2013 2012 £000 £000 Profit after tax, before exceptional items (a) 65,212 57,325 Add: interest (b) 34,367 34,955 Profit pre-interest (c) 99,579 92,280 Less: deferred tax (7,625) (3,500) Add: Depreciation 53,097 49,166 Cash return (d) 145,051 137,946 P&L return on capital [
Slide 38: ROC/CROCCE/ROE
Appendix D3 ROC/CROCCE/ROE 2013 2012 £000 £000 Shareholder funds per balance sheet 214,915 169,644 Add: cumulative losses on disposal 84,990 65,965 : hedging provision 44,045 66,029 (e) 343,950 301,638 Add: net debt (f) 474,212 462,611 Capital employed (g) 818,162 764,249 Add: deferred tax provision
Slide 39: Cash Flow
Appendix E Cash Flow 2013 2012 £000 £000 Free Cash Flow 65,349 91,542 Dividends (15,053) (15,544) Proceeds on Disposal 645 887 Investment in new pubs (60,888) (75,348) (9,947) 1,537 Issue of new shares - 95 Share Buy Backs - (22,711) (9,947) (21,079) Non Cash Movements (1,655) (3,839) Movement in ne
Slide 40: Summary Financial Performance
Appendix F Summary Financial Performance Total sales Profit before tax and exceptional Earnings per share before Free cash flow Free cash flow Financial exceptional items per share items year £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 41: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £400m 29 Jul 2012 12 Nov 2014 5.3% £400m 12 Nov 2014 31 Jul 2016 3.5% £400m 31 Jul 2016 31 Jul 2018 2.2% 41
Slide 42: Questions
The Joseph Conrad, Lowestoft The Rose Salterne, Bideford Questions The Green Dragon, Leek The Green Dragon, Leek 42