Wetherspoon's boosted by April sunshine as investment grows
JD Wetherspoon expects a 'reasonable' outcome for the year after unseasonably warm weather helped the pub group offset higher costs at the start of the year.
The group told investors on Wednesday like-for-like sales were up 5.6 per cent over the 13 weeks to 27 April, though total sales were up by 5 per cent reflecting a 'small number' of pub disposals over the period.
Wetherspoon's has sold seven pubs since the star of the year, but opened two, leaving it with 795 venues in total.
Having previously revealed a target of 1,000, Wetherspoon's said it intends to open 'four or five' new pubs this financial year and 'approximately 10' in 2026.
But the group also spent £17million on seven freehold reversions, whereby Wetherspoon's buys pubs in which it was previously the tenant.
An additional seven pubs now operate under a franchise agreement, four of which opened during the last quarter, all operated by Haven Holiday Parks.
Chairman Tim Martin also noted fresh investment in new staff facilities across 520 pubs, with 49 completed in the current year, including staff rooms and changing rooms.
The group has lined up staff facility investment for approximately 270 more of its pubs in the future at a cost of around £100,000 per venue.
Martin also highlighted the group's growing product range, with the arrival of Jaipur traditional ale, Kronenbourg 1664 Biere and Poretti all proving popular additions to the bar.
As a result of this investment, Wetherspoon's expects to end its financial year with debt of £720million to £740million, with headroom of approximately £200million.
Martin added: 'Bearing in mind that recent trading has been helped by favourable weather, the company anticipates a reasonable outcome for the financial year, notwithstanding previously reported wage and tax increases of approximately £1.2million per week.'
JD Wetherspoon shares were down 0.5 per cent at 684.5p in early trading. They have added 12 per cent since the beginning of the year.
Robinhood UK lead analyst Dan Lane said: 'Sales are in a good place and there is a clear focus on getting the pub count up but also making sure these are quality sites that the UK public wants to go to.
'Slowly does it though, as the property footprint still sits slightly below the 800 mark, against the 1,000 the group has previously targeted.'
Lane added that the market has so far largely 'shrugged off' Wetherspoon's debt pile, while the group's near immunity from US tariff pressures 'has kept its interest despite inflationary pressures'.
He said: 'No news of price hikes today and Martin will be hoping to weather any further uptick in inflation before he's forced to erode the chain's main selling point with a lift to the price of a pint.
'If the Bank of England drops interest rates tomorrow, we might see even more attention paid to businesses like this, naturally shielded from tariff headlines and already reinvesting in themselves for the long term.'
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