Wetherspoons investors will be happy with a welcome increase in revenue in the 9 weeks to 2 October 2022 despite disappointing preliminary full year results.
Revenue in the 9 week period rose 10.1% compared to the same period a year prior. However, rising costs and supply chain issues saw the pub chain lose £30m over the full year.
Tim Martin, the Chairman of J D Wetherspoon plc, said: “previously reported increases in labour and repair costs and the potentially adverse effects of rises in interest rates and energy costs on the economy, firm predictions are hard to make.”
COVID Lockdowns
Wetherspoons investors have become accustomed to Mr Martin’s political punditry in market updates, and the Chairman did not disappoint in today’s release.
He took the opportunity to attribute the poor performance to the UK Government’s COVID policy and the release included references to studies that showed lockdowns did not prevent excess deaths.
Nonetheless, while earnings for the past year were impacted by lockdown, markets choose to look to recent positivity and JD Wetherspoon shares were 12% higher at the time of writing.
“The results themselves yielded few surprises and it is encouraging to see a good uplift in sales so far in the first ten weeks of the current financial year. However, the question is how long this can go on for. Without doubt pubgoers have bigger hits to come to their wallet, be it from energy costs or increased mortgage payments,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.
“JD Wetherspoon has its own cost challenges to face particularly when it comes to staff and maintaining the quality of its estate. With that in mind it is hard to see how further lockdowns are really the most tangible threat, and don’t anticipate a return to dividends any time soon given that net debt is hovering at close to £0.9m.”