Slide 1: J.D. Wetherspoon Plc Preliminary Announcement
J.D. Wetherspoon Plc Preliminary Announcement 6 September 2002
Slide 2: Highlights - Twelve Months to 28 July 2002
Highlights -Twelve Months to 28 July 2002 • Turnover up 24% to £601.3m • Profits before tax up 21% to £53.6m • Earnings per share up 17% to 16.6p • Free cash flow per share 33.5p - double EPS • Dividend per share increased by 10% to 3.22p 1
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: Openings - Second Half 2002 (52)
Openings- Second Half 2002 (52) M25 North East North West South West Camberley Barnsley Bolton Bristol X 2 Camden Doncaster Burnley Chard Epsom Grimsby Liverpool X 2 Plymouth Greenwich Harrogate Manchester Salisbury Islington Huddersfield Scotland Taunton London - Farringdon Road Middlesbrough Dunde
Slide 5: Five Year View: Average Sales Per Pub Week
Five Year View Average Sales Per Pub Week (including VAT) £000 24.7 25 23.5 22.7 23 20.4 21 19.7 19 17 15 1998 1999 2000 2001 2002 4
Slide 6: Like For Like Sales
Like For Like Sales % 1st Half 2nd Half Full Year Full Year 2002 2002 2002 2001 Bar 3.9 3.3 3.5 6.2 Food 10.2 9.3 9.9 11.4 Total 5.5 4.7 5.0 7.5 5
Slide 7: Trading
Trading 6
Slide 8: Trading
Trading • Curry club - expanded offer - July 2002 volumes double previous year • Steak out - expanded range September 2002 - steak choice / rack of ribs - 85,000 per week • National breakfast offer September 2002/10am opening 7
Slide 9: Costs/Purchasing Initiatives
Costs/Purchasing Initiatives • Food buying e.g. burger buns (£169,000) • Capital - carpets (£178,000) • Other examples - napkins/till rolls/toilet rolls (£133,000) • Future areas - soft drinks - spirits - capital items - non-consumables 8
Slide 10: Pub Sales Performance
Pub Sales Performance 2000/01 Pubs z Sales £22.9k (+10% -v- first year) 2001/02 Pubs z Sales £26.1k Lloyds z Original 10 - £27.7k (at acquisition £10.0k) z Development - 2000/01 4 - 2001/02 20* - Average sales £30.0k Weekly sales include VAT * Includes 2 JDW conversions 9
Slide 11: People
People • BII Supreme training award two years running • Developing advanced diploma in Licensed Retailing (Leeds Met. University) • Lowest ever employee turnover • 57% of assistant managers are internal promotions 10
Slide 12: The Winter Gardens, Harrogate
The Winter Gardens, Harrogate 5,800 Square feet 11
Slide 13: The Postern Gate, York
The Postern Gate, York 4,900 Square feet 12
Slide 14: Lloyds, Glasgow
Lloyds, Glasgow 5,800 Square feet 13
Slide 15: Operating Margins - Summary
Operating Margins - Summary 2002 2001 £000 % of £000 % of Sales Sales Turnover 601,295 - 483,968 - Pub Operating Profit 141,660 23.6 119,559 24.7 Sale & leaseback rentals (7,721) (1.3) (7,717) (1.6) Head Office Costs (27,511) (4.6) (23,788) (4.9) EBITDA 106,428 17.7 88,054 18.2 Depreciation (36,343)
Slide 16: Pub Operating Margins
Pub Operating Margins 2002 2001 Gross margin 62.5% 62.0% Staff costs 23.9% 23.0% Other pub costs (rent, rates, utilities) 15.0% 14.3% Pub operating profit 23.6% 24.7% 15
Slide 17: 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 5.0 10.2 5.1 4.0 2.2 sales growth (%) Like for like 3.8 13.6 3.5 3.1 -1.7 profit growth (%) Number of pubs 343 93 72 65 113 16
Slide 18: Cash Flow
Cash Flow 2002 2001 £000 £000 Cash from operations 113,700 93,005 Interest and tax (23,604) (16,016) Investments in existing pubs (18,726) (15,792) Free cash flow available for 71,370 61,197 +17% new pub development Dividends (4,445) (4,529) Disposal proceeds 412 - Investment in own shares - (241) T
Slide 19: Financial - Funding
Financial - Funding 2002 2001 Gearing (%) – post FRS19 98 88 – pre FRS19 82 75 Interest cover (times) 4.2 4.2 Fixed charge cover (times) - statutory 2.1 2.0 - excluding 2.8 2.7 depreciation 18
Slide 20: Financial - Funding
Financial - Funding £m Existing gross debt 316 Unutilised facilities at 28 July 2002 36 New facilities (repayable 5-10 years) 55 Total facilities 407 Unutilised facilities and cash balances 105 19
Slide 21: Underlying Economic Profits
Underlying Economic Profits 2002 2001 £’000 £’000 PBT 53,568 44,317 Add: Depreciation 36,343 29,674 Less: Capital invested in existing pubs (18,726) (15,792) Economic profit 71,185 58,199 +22% % Sales 11.8% 12.0% Economic profit after tax on cash basis 62,629 55,857 Cash tax rate 16.0% 5.0% ROC (pre
Slide 22: JDW - The Last 10 Years
JDW - The Last 10 Years 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Sales per pub (£000) 577 619 702 786 848 872 904 1,004 1,040 1,093 EBITDA per pub (£000) (1) 131.6 135.6 149.5 177.6 190.8 184.9 188.0 203.8 205.9 207.4 Average capital employed per pub (£000) 842 820 895 949 974 1028 990 972
Slide 23: Pipeline
Pipeline 2002 2001 On site 25 25 With planning/licensing 60 61 Terms agreed 60 65 In negotiation 166 170 311 321 22
Slide 24: Prospects
Prospects • Strong August trading (5.9% LFL sales) • Growth opportunities - food/Lloyds • Annual openings 80 (+/- 10) • Target - 1500 + sites • Strong cash generation/earnings growth 23
Slide 25: Appendices
Appendices A - 10 Year financial trends B - Capital trends 24
Slide 26: 10 Year Financial Trends
Appendix A 10 Year Financial Trends Average Sales Per Pub Week (including VAT) Number of Pubs £000 26 24.7 700 24 23.5 608 22.7 600 22 20.4 522 20 19.2 19.7 500 17.8 428 18 400 15.9 327 16 14 300 252 13 14 194 200 146 12 110 87 10 100 67 19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 2000 2001 200
Slide 27: Capital Trends
Appendix B Capital Trends 1998 1999 2000 2001 2002 Size (sq.ft.) – openings 3,401 3,037 3,217 3,526 3,808 Number of openings 68 84 101 94 87 % which are freehold 49 58 67 75 53 Freehold average cost (£k) 463 427 465 443* 500** Average development cost (£k) 965 941 1,049 1,178 1,262 Average cost per