Wetherspoon reports record year, but shares fall on outlook

13th Sep 2013 07:16

Annual profits at pub group JD Wetherspoon came in slightly ahead of forecasts as the company reported record numbers across the board, though the dividend was kept the same as last year. Shares however fell into the red on Friday morning after the firm warned of a slowdown in sales growth since the fiscal year-end. The stock was down 1.57% at 723.42p by 08:19.Wetherspoon reported a profit before tax and exceptional items of £76.9m for the 52 weeks to July 28th, up 6.3% from £72.4m the year before and marginally above the consensus estimate of £76.2m.Total revenue during the period increased by 7% from £1,197m to £1,281m, while like-for-like (LFL) sales increased by 5.8%."I am pleased to report another year of progress, with record sales, profit and earnings per share*, despite having paid £551.5m in taxes during the year (equivalent to £632,000 per pub) and rewarding staff with £28.6m of bonuses," said Chairman Tim Martin.On the subject of taxes, Martin said it was "unsustainable" for taxes in the pub industry to be higher than those for supermarkets: "Already, 10,000 pubs have closed and many others are suffering, through insufficient investment. In particular, there should be VAT equality for pubs, restaurants and supermarkets."The firm had a total estate of 886 pubs at the end of the year, having opened 29 during the period. It said that the average development cost for a new pub rose from £1.42m to £1.55m over the year due to an increased spend on kitchens, customer areas and beer gardens. It intends to open around 30 more during the current financial year. The final dividend was maintained at 8p a share, leaving the total payout unchanged at 12p. However, the dividend is now covered 3.2 times by earnings, up from 3 times last year. "In view of high levels of capital expenditure in recent years and the potential for advantageous investments in the future, the board has decided to maintain the dividend at its current level for the time being."The new fiscal year has got off to a decent start with LFL sales in the six weeks to September 8th up 3.6%. Panmure Gordon had said last week that it was pencilling in LFL growth of only 2% given the tough comparatives with last year. However, Martin said that LFL sales growth during the last fortnight had fallen to 2.5% - "and this may be a reasonable indicator of future sales trends, in the light of strong sales in the last financial year".BC