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JD Wetherspoon Pre-tax Profit Declines, Sales Up 12%; Shares Climb

British pub chain operator JD Wetherspoon Plc (JDW.L) reported Friday a lower pre-tax profit for fiscal 2012. Revenues grew by about 12 percent and like-for-like sales were up nearly 3 percent. The company said its margins were impacted by increases in taxation, utilities and bar and food costs.

Looking ahead, the company expects taxation and input costs to continue to rise, but sees a "reasonable outcome" in the current financial year. The shares rose about 5 percent in the morning trade in London.

Chairman Tim Martin stated, "As previously indicated, the biggest dangers to the pub industry, are the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes, such as the late-night levy and the increase in fruit/slot machine taxes." The company noted that it's like-for-like sales for the six weeks ended September 9, increased 8.4 percent, with total sales growth of 12.8 percent, helped by a strong performance during the Olympic and Paralympic Games.

Announcing its preliminary results for the 53 weeks ended July 29, the company said its profit before tax declined to 58.88 million pounds from 61.39 million pounds in the previous year.

Excluding exceptional items, pre-tax profit for the recent year was 72.36 million pounds. In the prior year, the company had posted adjusted pre-tax profit of 66.78 million pounds.

On a per share basis, earnings marginally increased to 35.6 pence from 35.4 pence per share a year ago. Adjusted earnings per share after exceptional items were 31.1 pence.

Revenues for the year grew 11.7 percent to 1.2 billion pounds, with like-for-like sales growth of 3.2 percent. Excluding week 53, sales increased 9.3 percent.

Like-for-like bar sales increased 2.8 percent, compared to an increase of 1.7 percent last year. Like-for-like food sales was up 4.8 percent, in comparison with a 4.2 increase a year earlier.

The company's operating margin, before exceptional items, decreased to 9 percent from 9.5 percent in the prior year. The operating margin after exceptional items was 7.8 percent, lower than 9 percent in the prior year. In addition, the company said its board has proposed an unchanged final dividend of 8 pence per share, to shareholders of record on October 26, 2012, payable on November 29.

JDW.L is currently trading at 484.8 pence, up 24.2 pence or 5.25 percent, on a volume of 103 thousand shares.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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