12th Sep 2014 06:50
LONDON (Alliance News) - British pub chain JD Wetherspoon PLC Friday posted strong profit and revenue growth in its last financial year, boosted by new pub openings and impressive sales of its food and beverages, but said investment it's making in the business continue to squeeze its profit margin.
The UK-based pub owner and operator said the strong growth momentum continued into the new financial year, and as always, said its aiming for a "reasonable outcome" for the year, but did not elaborate.
"In the six weeks to 7 September 2014, like-for-like sales increased by 6.3%, with total sales increasing by 11.4%," said Chairman Tim Martin in a statement.
JD Wetherspoon reported a pretax profit of GBP78.4 million for the 52 weeks ended July 27, up from GBP57.1 million a year earlier, boosted by a 10% rise in revenue to GBP1.41 billion, up from GBP1.28 billion. Like-for-like sales were up 5.5%, with food sales up 12%, bar sales up 2.7%, and slot/fruit machines down 3.1%.
As in recent years, the company kept its dividend unchanged at 12.0 pence per share for the 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 company said.
JD Wetherspoon said investments, including on higher salaries, training for its staff and repairs, continue to weigh on its profit margin, although Martin told Alliance News earlier this year that it's not going to try too hard to protect and maintain margins, as it focuses instead on increasing growth, profit and free cash flow.
"We now employ over 34,000 people, an increase of over 3,000 in the last year. In addition, GBP29.2 million in bonuses and free shares was paid to employees, 82% to those working in our pubs," Martin said in Friday's statement.
In the last decade, the pub chain has grown sales to GBP1.4 billion, from only GBP787.1 million in 2004. Profit and free cash flow have also grown significantly.
In its statement Friday, JD Wetherspoon said it spent a total of GBP177.5 million on capital investment last year, mostly on new pub openings, as well as existing pubs and IT infrastructure, and freehold reversions.
The company opened 46 pubs during the year, and sold or closed five, leaving it trading from 927 pubs at year end.
It said the average development cost for a new pub has risen as it continues to increase expenditure on kitchens, customer areas and beer gardens.
"We currently intend to open around 30 to 40 pubs in the year ending July 2015," the company said.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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