J D Wetherspoon plc (‘J D Wetherspoon’ or ‘the Company’), announces an update on current trading, before entering its close period for its interim results, for the six months ending 24 January 2016, which are expected to be announced on 11 March 2016.
Current trading
For the first 12 weeks of the second quarter (to 17 January 2016), like-for-like sales increased by 3.3% and total sales by 6.3%. In the year to date (25 weeks to 17 January
2016), like-for-like sales increased by 2.8% and total sales increased by 6.1%.
We expect the operating margin (before any exceptional items) for the half year ending 24 January 2016 to be around 6.3%, 1.1% lower than the same period last year. The margin
reflects the increases in the starting rates for hourly paid staff in October 2014 and August 2015, which totalled approximately 13%.
Property
The Company has opened 5 new pubs since the start of the financial year and has sold 2. We intend to open 10 to 15 pubs in the current financial year.
Financial position
The Company remains in a sound financial position. Net debt at the end of this financial year is currently expected to be slightly above the 26 July 2015 total of £601.1 million.
Outlook
The chairman of JD Wetherspoon, Tim Martin, said:
“Like-for-like sales have improved in the second quarter so far. However, as indicated in our November trading update, increased labour costs will be an important factor in the outcome for this financial year. Our current view is profits for this year are likely to be towards the lower end of analysts’ expectations.”