Half Yearly Report

RNS Number : 0188Z
Wetherspoon (JD) PLC
08 March 2012
 



 

 

J D WETHERSPOON PLC

 

PRESS RELEASE                                                            

 

FINANCIAL HIGHLIGHTS




Ÿ  Revenue £569.4m (2011: £525.4m)                                  

+8.4%

Ÿ  Like-for-like sales                                                     

+2.1%

Ÿ  Free cash flow per share 27.5p (2011: 16.9p)     

+62.7%

Ÿ  Free cash flow £34.9m (2011: £22.7m)                

+53.7%

Before Before exceptional items:    


Ÿ  Operating profit £53.1m (2011: £49.6m)              

+7.2%

Ÿ  Profit before tax £35.8m (2011: £32.2m)              

+11.1%

Ÿ  Earnings per share 20.2p (2011: 16.5p)                           

+22.4%

Interim Interim dividend 4p (2011: 4p)                                             

maintained

 

Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said:

 

"The outcome for the first half of the financial year was reasonable, given the pressures on the UK consumer. 

 

As previously stated, the main challenges for the company, in this financial year of 53 trading weeks, will be the continuing cost pressures resulting from government legislation, including further increases to excise duty, business rates and carbon tax.

 

Sales since our 18 January 2012 pre-close statement have been disappointing, with like-for-like sales in the six weeks to 4 March declining by 0.7% and total sales increasing by 6.1%. As previously stated, we expect the operating profit margin before exceptionals to decline in the second half of this financial year due to continuing cost increases, with the current quarter particularly affected. We are, therefore, slightly more cautious about the potential outcome for the current financial year."

 

Enquiries:

 

            John Hutson                            Chief Executive Officer           01923 477777

            Kirk Davis                                Finance Director                     01923 477777

            Eddie Gershon                        Company spokesman             07956 392234

 

Photographs are available at: www.newscast.co.uk                                                            


 

Notes to editors

 

1.         JD Wetherspoon owns and operates pubs throughout the UK.  The Company aims to provide customers with good-quality food and drink, served by well-trained and friendly staff, at reasonable prices.  The pubs are individually designed and the Company aims to maintain them in excellent condition.

2.         Visit our website www.jdwetherspoon.co.uk

3.         This announcement has been prepared solely to provide additional information to the shareholders of JD Wetherspoon, in order to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.  It should not be relied on by any other party, for other purposes.  Forward-looking statements have been made by the directors in good faith using information available up until the date that they approved this statement.  Forward-looking statements should be regarded with caution because of inherent uncertainties in economic trends and business risks.

4.         The next Interim Management Statement will be issued on 2 May 2012.

 



CHAIRMAN'S STATEMENT AND OPERATING REVIEW

 

In the 26 weeks ended 22 January 2012, like-for-like sales increased by 2.1%, with total sales, including new pubs, increasing by 8.4% to £569.4 million (2011: £525.4 million). Like-for-like bar sales increased by 3.4% (2011: increased by 0.6%), like-for-like food sales were up 0.1% (2011: increased by 7.4%) and machine sales decreased by 3.8% (2011: decreased by 3.8%).

 

Operating profit before exceptional items increased by 7.2% to £53.1 million (2011: £49.6 million) and after exceptional items increased by 1.9% to £50.5 million (2011: £49.6 million). The operating margin before exceptional items was slightly lower at 9.3% (2011: 9.4%). Costs increased in several areas, especially in taxation, but also in labour, utilities and bar and food supplies. The operating margin after exceptional items was 8.9% (2011: 9.4%).

 

Profit before tax and exceptional items increased by 11.1% to £35.8 million (2011: £32.2 million) and after exceptional items increased by 3.1% to £33.2 million (2011: £32.2.million). Earnings per share before exceptional items increased by 22.4% to 20.2p (2011: 16.5p), as a result of fewer shares in issue and a reduced corporation tax charge, while basic earnings after exceptional items increased by 10.9% to 18.3p (2011: 16.5p). 

 

As explained below, in "Taxes and Regulation", the company paid taxes of £250.1 million in the period under review, 43.9% of sales, compared to £225.7 million in the same period last year, which was 43.0% of sales. Taxes therefore amounted to a multiple of 10.7 times this years profit after tax, compared to 10.2 times last year, mainly as a result of higher VAT, excise duty and carbon tax.

 

Net interest was covered 3.1 times by operating profit before exceptional items (2011: 2.9 times) and 2.9 times by operating profit after exceptional items (2011: 2.9 times). Total capital investment was £60.5 million in the period (2011: £54.9 million), with £41.7 million on new pub openings (2011: £38.3 million) and £18.8 million on existing pubs (2011: £16.6 million).

 

Exceptional items before tax totalled £2.6 million (2011: nil). The exceptional items relate to an IT related asset write off of £1.9 million, an insurance excess payment of £0.3 million (in respect of a pub which suffered a fire) and a provision for the loss on disposal of two trading pubs of £0.4 million.

 

Free cash flow, after capital investment of £18.8 million in existing pubs and payments of tax and interest, increased to £34.9 million (2011: £22.7 million), due mainly to a higher working capital inflow. Free cash flow per share was 27.5p (2011: 16.9p).

 

Property

 

In the period, we opened 20 new pubs and closed two (an airport lease expired and one pub was sold), bringing the number of open pubs at the period end to 841. We now intend to reduce the number of openings to around 40 in this financial year. Over the next few months we will review our plans for pub openings in future financial years, taking account of our concerns for the tax régime, referred to below, on pubs.

 

Dividends

 

The board declared an interim dividend of 4.0p per share for the current interim financial period ending 22 January 2012 (2011: 4.0p). The interim dividend will be paid on 23 May 2012 to shareholders on the register at 27 April 2012. The dividend was covered 4.6 times by profit.

 

Corporation tax

 

We expect the overall corporation tax charge for the financial year, including current and deferred taxation, to be approximately 28.5% before exceptional items (July 2011: 30.2% before exceptional items and after excluding the effect of the tax-rate change), due to the UK standard weighted average tax rate for the period falling by 1.6% to 25.7%. As in previous years, the company's tax rate is higher than the standard UK tax rate mainly due to depreciation not eligible for tax relief.

 

We expect the company's current tax rate (excluding deferred tax) to be approximately 28.7% (July 2011: 28.7%), partly due to the planned capital allowances rates reduction of 2% on 1 April 2012 and also lower estimated tax relief, in respect of free share awards to be granted later in the financial year.

 

 

 

Financing

 

As at 22 January 2012, the company's net bank borrowings (including finance leases) were £456.6 million, an increase of £18.9 million, compared with the previous year end (24 July 2011: £437.7 million). Our debt-to-EBITDA ratio was 2.99 times at the period end, compared with 2.98 times at the previous financial year end.

 

Taxes and regulation

 

The table below breaks down the taxes paid in the period, in comparison with both last year and our profit after tax:

 


11/12

10/11


First half

First half


£m

£m




VAT

115.6

95.1

Alcohol duty

65.6

61.6

PAYE and NIC

32.8

32.9

Business rates

21.0

20.2

Corporation tax

9.0

11.1

Machine duty

1.6

1.5

Fuel duty

1.3

1.3

Carbon tax

1.2

0.0

Climate change levy

0.6

0.8

Stamp duty

0.6

0.5

Landfill tax

0.6

0.5

Premise license and TV licenses

0.2

0.2

TOTAL TAX

250.1

225.7




TAX AS % OF SALES

43.9%

43.0%




NET PROFIT AFTER TAX (£m)

23.3

22.1




NET PAT AS % OF SALES

4.1%

4.2%

 

The company is concerned by the absolute level of taxes and by their continuing increases, especially since supermarkets pay virtually no VAT, in respect of food purchases, while pubs pay 20%, in effect creating an enormous tax boost for supermarkets, enabling them to cross-subsidise drinks prices. Since VAT was increased from 8% to 15% over 30 years ago, and following further more recent increases to 20%, the pub industry has increasingly struggled to compete. Over that period, pubs have lost approximately half of their beer sales to supermarkets.

 

This tax, and hence price, disparity has been felt more acutely in less-well-off areas of Britain, where price disparities matter more - and the number of closed pubs in these locations is clearly evident. This, undoubtedly, has a knock-on effect for other businesses in small towns and secondary shopping centres, contributing to closed shops and reduced economic activity.

 

As well as generating large amounts of tax, pubs create large numbers of jobs, far more per pint or meal than supermarkets do, so the current tax subsidy makes no economic sense.

The situation is exacerbated for pubs by the recent huge increases in excise duty (the tax paid on alcoholic drinks) in recent years, meaning that excise duty in this country is far higher than that in France, for example, with adverse consequences for tourism and the economy generally.

 

Punitive excise duty increases are often justified by the erroneous argument that they discourage binge drinking by raising consumer prices. In fact, the opposite has occurred: as pub prices go up, following duty increases, customers turn to supermarkets, decreasing the AVERAGE price which consumers pay for drinks.

 

It is now widely perceived that the previous and current governments' attempts to control binge drinking by a 'crackdown' on pubs have been misconceived and counter-productive. Pubs are not perfect, but generally try to create a supervised and civilised environment for drinking, usually preferable to streets, parks, parties and homes. The government needs to end the supermarket tax subsidy and to aim for excise duties to match the European average.

 

Further progress

 

The company continues to try to upgrade every area of the business. We have invested £18.8 million in refurbishments of existing pubs, new IT systems and equipment. For example, we have recently introduced plate-warmers and upgraded our pubs' glass-washers, cutlery and crockery.

 

Other areas of progress include the national launch of an apprenticeship scheme which has provided employment opportunities for 500 young people. In total, we have created 3,040 new jobs in the last 12 months. Our support for CLIC Sargent continues -- and we have now raised over £5.2 million for this worthwhile cause. 

 

We now have 238 pubs listed in CAMRA's Good Beer Guide, the greatest number in our history and more than any other pub company. In this connection, 98% of our pubs are now also accredited by Cask Marque - an excellent quality-assurance system to monitor and report on the condition of ale in pubs.

 

We are running what we believe to be the world's biggest beer festival, starting on 14 March 2012, featuring 50 beers, including those from America, Belgium, Norway, Russia and South Africa. In general, we continue, at all of our pubs, to be a major supporter of microbreweries and their excellent products.

 

We continue to upgrade our catering business and are introducing a new menu in late March, featuring 30 dishes at under 700 calories each. Our marketing efforts will also emphasise positive aspects, including free-range eggs, sustainable cod, haddock and salmon, Rainforest-Alliance-certified coffee, dolphin-friendly tuna and 100% British and Irish steaks and beef burgers.

 

Current trading and outlook

 

The outcome for the first half of the financial year was reasonable, given the pressures on the UK consumer. 

 

As previously stated, the main challenges for the company, in this financial year of 53 trading weeks, will be the continuing cost pressures resulting from government legislation, including further increases to excise duty, business rates and carbon tax.

 

Sales since our 18 January 2012 pre-close statement have been disappointing, with like-for-like sales in the six weeks to 4 March declining by 0.7% and total sales increasing by 6.1%. As previously stated, we expect the operating profit margin before exceptionals to decline in the second half of this financial year due to continuing cost increases, with the current quarter particularly affected. We are, therefore, slightly more cautious about the potential outcome for the current financial year.

 

 

Tim Martin

Chairman

9 March 2012

 

 

 



Income statement for the 26 weeks ended 22 January 2012

 


Notes

Unaudited

26 weeks ended

22 January

2012


Unaudited

26 weeks ended

 23 January

2011


Audited

52 weeks ended

 24 July

2011



£000


£000


£000

Revenue

4

569,375


525,364


1,072,014

Operating costs


(516,259)


(475,795)


(969,705)








Operating profit before exceptional items

6

53,116


49,569


102,309

Exceptional items

5

(2,599)


-


(5,389)








Operating profit


50,517


49,569


96,920

Finance income


27


14


36

Finance costs


(17,334)


(17,362)


(35,564)








Profit before tax


33,210


32,221


61,392

Income tax expense

7

(9,926)


(10,079)


(14,600)








Profit for the period


23,284


22,142


46,792








Earnings per share (pence)

8






Basic earnings per share


18.3


16.5


35.4

Diluted earnings per share


18.3


16.5


35.4

 

All activities relate to continuing operations.

 

Statement of comprehensive income for the 26 weeks ended 22 January 2012

 


Notes

Unaudited

26 weeks ended

22 January 2012

£000


Unaudited

26 weeks ended

23 January 2011

£000


Audited

52 weeks ended

24 July

2011

£000








Interest-rate swaps: (loss)/gain taken to equity

13

(6,638)


11,045


3,511

Tax on items taken directly to equity


1,660


(2,983)


(2,466)

Net (loss)/gain recognised directly in equity


(4,978)


8,062


1,045

Profit for the period


23,284


22,142


46,792








Total comprehensive income for the period


18,306


30,204


47,837


 

Cash flow statement for the 26 weeks ended 22 January 2012

 


Notes

Unaudited

26 weeks ended

22 January 2012

£000

 

 

 

Unaudited

26 weeks ended

 22 January 2012

£000


Unaudited

26 weeks ended

 23 January 2011

£000

 

 

 

Unaudited

26 weeks ended

 23 January 2011

£000


Audited

52 weeks ended

24 July

2011

£000


Audited

52 weeks ended

24 July

2011

£000














Cash flows from operating activities













Cash generated from operations

9

79,173


79,173


70,133


70,133


178,197


178,197

Interest received


17


17


14


14


39


39

Interest paid


(16,478)


(16,478)


(16,805)


(16,805)


(34,020)


(34,020)

Corporation tax paid


(8,968)


(8,968)


(11,115)


(11,115)


(21,215)


(21,215)

Purchase of own shares for share-based payments

 

 

-


-


 

(2,913)

 

 

 

(2,913)


 

(5,783)


 

(5,783)

Net cash inflow from operating activities


53,744


53,744


39,314


39,314


117,218


117,218

 

Cash flows from investing activities













Purchase of property, plant and equipment


(14,986)


(14,986)


(14,773)


(14,773)


(31,787)


(31,787)

Purchase of intangible assets


(3,838)


(3,838)


(1,801)


(1,801)


(6,613)


(6,613)

Purchase of lease premiums


-




(750)




(825)



Proceeds of sale of property, plant and equipment


250




-




1,100



Investment in new pubs and pub extensions


(41,666)




(37,569)




(86,793)



Net cash outflow from investing activities


(60,240)


(18,824)


(54,893)


(16,574)


(124,918)


(38,400)

 

Cash flows from financing activities













Equity dividends paid

14

(10,475)




-




(5,211)



Proceeds from issue of ordinary shares


46




77




225



Purchase of shares for cancellation


-




(1,217)




(32,759)



Advances under bank loans

13

18,199




16,363




49,962



Finance costs on new loan

13

(2,711)




-




-



Finance lease payments

13

(2,038)




(1,391)




(2,908)



Net cash inflow  from financing activities


 

3,021




 

13,832




 

9,309



Net change in cash and cash equivalents

13

(3,475)




(1,747)




1,609



Opening cash and cash equivalents


27,690




26,081




26,081



Closing cash and cash equivalents


24,215




24,334




27,690



Free cash flow




34,920




22,740




78,818














Free cash flow per ordinary share

8



27.5p




16.9p




59.7p














 

 



Balance sheet as at 22 January 2012

 


Notes

Unaudited

22 January 2012

£000


Unaudited

23 January

2011

£000


Audited

24 July

2011

£000

 

Assets







Non-current assets







Property, plant and equipment

10

907,800


830,396


881,271

Intangible assets

11

12,908


7,932


11,525

Deferred tax assets


17,229


14,782


15,569

Other non-current assets

12

10,350


10,601


10,520



948,287


863,711


918,885








Current assets







Inventories


20,282


19,488


21,488

Other receivables


25,597


26,359


21,623

Assets held for sale


145


-


70

Cash and cash equivalents

13

24,215


24,334


27,690



70,239


70,181


70,871








Total assets


1,018,526


933,892


989,756








Liabilities







Current liabilities







Trade and other payables


(185,143)


(152,832)


(189,777)

Financial liabilities due in one year


(3,545)


(2,863)


(3,129)

Current income tax liabilities


(10,505)


(10,151)


(9,457)



(199,193)


(165,846)


(202,363)








Non-current liabilities







Financial liabilities


(477,300)


(427,572)


(462,254)

Derivative financial instruments

13

(64,518)


(50,346)


(57,880)

Deferred tax liabilities


(71,358)


(76,060)


(71,448)

Provisions and other liabilities


(25,067)


(23,447)


(24,766)



(638,243)


(577,425)


(616,348)








Net assets


181,090


190,621


171,045








Shareholders' equity







Ordinary shares

15

2,632


2,777


2,632

Share premium account


143,245


143,053


143,199

Capital redemption reserve


1,798


1,652


1,798

Hedging reserve


(48,388)


(36,759)


(43,410)

Retained earnings


81,803


79,898


66,826








Total shareholders' equity


181,090


190,621


171,045

 

 

 

 



Statement of changes in shareholders' equity

 


Called-up share capital

£000

 

Share premium

account

£000

 

Capital redemption

reserve

£000

 

Retained earnings

£000

 

Total

£000

 

At 25 July 2010

2,783

142,975

1,646

(44,821)

59,558

162,141








Profit for the period





22,142

22,142








Interest-rate swaps
- profit taken to equity




 

11,045


11,045

Tax on items taken directly to equity




(2,983)


(2,983)

Comprehensive income




8,062

22,142

30,204








Exercise of options


78




78

Cancellation of shares

(6)


6


(1,217)

(1,217)

Share-based payment charges





2,328

2,328

Purchase of shares held in trust





(2,913)

(2,913)








At 23 January 2011

2,777

143,053

1,652

(36,759)

79,898

190,621








Profit for the period





24,650

24,650








Interest-rate swaps
- loss taken to equity




 

(7,534)

 

 

(7,534)

Tax on items taken directly to equity




883

(366)

517

Comprehensive (loss)/income




(6,651)

24,284

17,633








Exercise of options

1

146




147

Cancellation of shares

(146)


146


(31,542)

(31,542)

Share-based payment charges





2,267

2,267

Purchase of shares held in trust





(2,870)

(2,870)

Dividends





(5,211)

(5,211)








At 24 July 2011

2,632

143,199

1,798

(43,410)

66,826

171,045








Profit for the period





23,284

23,284








Interest-rate swaps
- loss taken to equity




 

(6,638)

 

 

(6,638)

Tax on items taken directly to equity




1,660


1,660

Comprehensive (loss)/income




(4,978)

23,284

18,306








Exercise of options


46




46

Share-based payment charges





2,168

2,168

Dividends





(10,475)

(10,475)








At 22 January 2012

2,632

143,245

1,798

81,803

181,090

 

 

 

 



Notes

 

1.         General information

 

J D Wetherspoon plc is a public limited company, incorporated and domiciled in England and Wales. Its registered office address is: Wetherspoon House, Central Park, Reeds Crescent, Watford, WD24 4QL.

 

The company is listed on the London Stock Exchange.

 

This condensed half-yearly financial information was approved for issue on 9 March 2012.

 

These interim financial results do not comprise statutory accounts within the meaning of Sections 434 and 435 of the Companies Act 2006. Statutory accounts for the year ended 24 July 2011 were approved by the board of directors on 9 September 2011 and delivered to the Registrar of Companies. The report of the auditors, on those accounts, was unqualified, did not contain an emphasis-of-matter paragraph and did not contain any statement under Sections 498 to 502 of the Companies Act 2006.

 

The business is subject to minor seasonal fluctuations, depending on public holidays and the weather.

 

There are no changes to the principal risks and uncertainties as set out in the financial statements for the 52 weeks ended 24 July 2011, which may affect the company's performance in the next six months. The most significant risks and uncertainties relate to the taxation on, and regulation of, the sale of alcohol, cost increases and UK disposable consumer incomes. For a detailed discussion of the risks and uncertainties facing the company, refer to the annual report for 2011, pages 42 and 43.

 

2.         Basis of preparation

 

This condensed half-yearly financial information of J D Wetherspoon plc (the 'Company'), which is abridged and unaudited, has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with International Accounting Standards (IAS) 34, Interim Financial Reporting, as adopted by the European Union. This half-yearly condensed financial report should be read in conjunction with the annual financial statements for the 52 weeks ended 24 July 2011 which have been prepared in accordance with IFRSs, as adopted by the European Union.

 

The directors have made enquiries into the adequacy of the Company's financial resources, through a review of the Company's budget and medium-term financial plan,including capital expenditure plans and cash flow
forecasts; they have satisfied themselves that the
 Company will continue in operational existence for the
foreseeable future. For this reason, they continue to
 adopt the going-concern basis in preparing theCompany's financial statements.

 

The financial information for the 52 weeks ended 24 July 2011 is extracted from the statutory accounts of the Company for that year.

 

The interim accounts for the 26 weeks ended 22 January 2012 and the comparatives for 23 January 2011 are unaudited, but have been reviewed by the auditors. A copy of the review report is included at the end of this report.

 

3.         Accounting policies

 

Taxes on income in the interim periods are accrued using the tax rate which would be applicable to expected total annual earnings.

 

The accounting policies adopted in the preparation of the interim report are consistent with those applied in the preparation of the Company's annual report for the year ended 24 July 2011.

 

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 25 July 2011, but are not relevant for the Company:

 

·      Amendments to IFRS 7 'Financial instruments: Disclosures on derecognition'

 

·      Amendments to IAS 24 (revised) 'Related-party disclosures'

 

·      Prepayments of a minimum funding requirement (amendments to IFRIC 14) 

 

4.         Revenue

 

Revenue disclosed in the income statement is analysed as follows:

Unaudited

26 weeks ended

22 January 2012

£000

Unaudited

26 weeks ended

23 January 2011

£000

Audited

52 weeks ended

24 July 2011

£000





Sales of food, beverages and machine income

569,375

525,364

1,072,014

 

The Company trades in one business segment (that of operating managed public houses) and one geographical segment (being the United Kingdom).

 

5.         Exceptional Items

 


Unaudited

26 weeks ended

22 January 2012

£000

Unaudited

26 weeks ended

23 January 2011

£000

Audited

52 weeks ended

24 July

2011

£000

Operating items




Impairment of property and fixed assets

-

-

4,410

Loss on disposal of property, plant and equipment

666

-

979

Write-off of IT-related assets and other software costs

1,933

-

-


2,599

-

5,389

 

The intangible assets written off in the period relate primarily to the development cost of software which is no longer being implemented.

 

6.         Operating profit before exceptional items

 

This is stated after charging/(crediting):

Unaudited

26 weeks ended

22 January 2012

£000

Unaudited

26 weeks ended

23 January 2011

£000

Audited

52 weeks ended

24 July 2011

£000

Operating lease payments




- land and building




 • minimum lease payments

25,735

25,607

50,502

 • contingent rents

6,940

6,899

13,586

- equipment and vehicles

230

183

375

Repairs and maintenance

20,073

17,726

36,241

Rent receivable

(251)

(272)

(565)

Depreciation of property, plant and equipment




- owned assets

21,928

19,351

40,460

- assets held under finance leases

1,082

1,485

2,406

Amortisation of intangible assets

620

569

1,223

Amortisation of non-current assets

159

150

306

Share-based payment charges

2,467

2,328

4,595

 

7.         Income tax expense

 

The taxation charge for the period ended 22 January 2012 is calculated by applying an estimate of the effective tax rate before exceptional items of 28.5% for the year ending 23 July 2012 (2011: 31.3%). The UK standard weighted average tax rate for the period is 25.7% (2011: 27.3%), with the latest estimate of the current tax payable on profits for the financial year ending 29 July 2012 being 28.7% (2011: 30.3%).

 

 


Unaudited

26 weeks ended

22 January

2012

£000


Unaudited

26 weeks ended

23 January

2011

£000


Audited

52 weeks ended

24 July

2011

£000







Current tax

10,288


9,766


19,169

Current tax on exceptional items - intangible asset write off

(272)


-


-







Deferred tax






Origination and reversal of timing differences

(90)


313


980

Impact of change in UK tax rate

-


-


(5,549)







Tax charge in the income statement

9,926


10,079


14,600

 

8.         Earnings and free cash flow per share

 

Basic earnings per share has been calculated by dividing the profit attributable to equity holders of

£23,284,000 (January 2011: £22,142,000; July 2011: £46,792,000) by the weighted average number of shares in issue during the period of 127,004,632 (January 2011: 134,456,866; July 2011: 132,019,936).

 

The weighted average number of shares has been adjusted to exclude treasury shares held in respect of the employee Share Incentive Plan.

 

Earnings before exceptional items per share has been calculated before exceptional items detailed in note 5 and takes account of 3,708 (January 2011: 27,936; July 2011: 23,250) potential dilutive shares under option, giving a weighted average number of ordinary shares, adjusted for the effect of dilution, of 127,008,340 (January 2011: 134,484,802; July 2011: 132,043,186).

 

Adjusted earnings for the 52 weeks ended 24 July 2011 excludes an adjustment of £5,549,000, in respect of the corporation tax-rate change and exceptional items.

 

Earnings per share

 


January 2012 Earnings

£000

January 2011 Earnings

£000

July

 2011 Earnings

£000


January 2012 EPS

pence

January 2011 EPS

pence

July 2011

EPS

pence

Basic earnings/diluted earnings

23,284

22,142

46,792


18.3

16.5

35.4

Adjusted earnings before exceptional items

25,611

22,142

46,632


20.2

16.5

35.3

Adjusted earnings after exceptional items

23,284

22,142

41,243


18.3

16.5

31.2

 

Free cash flow per share

 

The calculation of free cash flow per share is based on the net cash generated by business activities and available for investment in new pub developments and extensions to current pubs, after funding interest, tax, all other reinvestment in pubs open at the start of the period and the purchase of own shares under the employee share-based schemes ('free cash flow'). It is calculated before taking account of proceeds from property disposals, inflows and outflows of financing from outside sources and dividend payments and is based on the same number of shares in issue as that for the calculation of basic earnings per share.

 

9.         Cash generated from operations

 


Unaudited

26 weeks ended

22 January 2012

£000

Unaudited

26 weeks ended

23 January 2011

£000

Audited

52 weeks ended

24 July 2011

£000





Operating profit

50,517

49,569

96,920

Operating exceptional Items

2,599

-

5,389

Operating profit before exceptional items

53,116

49,569

102,309

Depreciation and amortisation

23,789

21,555

44,395

Share-based payment charges

2,168

2,328

4,595


79,073

73,452

151,299

Change in inventories

1,207

423

(1,577)

Change in receivables

(3,677)

(3,640)

(1,896)

Change in payables

2,570

(102)

30,371





Net cash inflow from operating activities

79,173

70,133

178,197

 

10.        Property, plant and equipment

 


£000



Net book amount at 25 July 2010

810,714

Additions

44,094

Disposals

(3,576)

Depreciation

(20,836)

 

Net book amount at 23 January 2011

 

830,396

Additions

78,614

Disposals and transfer to assets held for sale

(4,951)

Depreciation, impairment and other movements

(22,788)

 

Net book amount at 24 July 2011

 

881,271

Additions

50,653

Disposals and transfer to assets held for sale

(1,114)

Depreciation

(23,010)

 

Net book amount at 22 January 2012

 

907,800

 

11.        Intangible assets

 


£000



Net book amount at 25 July 2010

6,700

Additions

1,801

Amortisation, impairment and other movements

(569)

 

Net book amount at 23 January 2011

 

7,932

Additions

4,255

Amortisation, impairment and other movements

(662)

 

Net book amount at 24 July 2011

 

11,525

Additions

3,745

Write-off of IT-related assets

(1,742)

Amortisation, impairment and other movements

(620)

 

Net book amount at 22 January 2012

 

12,908

 

Intangible assets all relate to computer software and development.

 

12.        Other non-current assets         

 

 

 


Unaudited

26 weeks

ended

22 January

2012

Unaudited

26 weeks

ended

23 January

2011

Audited

52 weeks ended

24 July

2011


£000

£000

£000





Leasehold premiums

10,350

10,601

10,520

 

13.        Analysis of changes in net debt

 


 

24 July 2011

£000

 

Cash flows

£000

Non-cash

movement

£000

22 January 2012

£000

Cash at bank

27,690

(3,475)

-

24,215

Debt due after one year

(457,522)

(15,488)

(850)

(473,860)


(429,832)

(18,963)

(850)

(449,645)

Finance lease creditor

(7,861)

2,038

(1,162)

(6,985)

Net borrowings

(437,693)

(16,925)

(2,012)

(456,630)

Derivative - cash flow hedge

(57,880)

-

(6,638)

(64,518)

Net debt

(495,573)

(16,925)

(8,650)

(521,148)

 

The £6.6m non-cash movement on the interest-rate swap arises from the movement in fair value of the swaps.

During the period under review, the Company entered into additional forward-starting interest-rate swap agreements, totalling £250 million, in addition to the existing swaps which expire in 2014 and 2016, respectively. The weighted average interest rate of the new swaps is 2.4%, from November 2014 to July 2018.

 

14.        Dividends paid and proposed

 


Unaudited

26 weeks ended

22 January

2012

£000

Unaudited

26 weeks ended

23 January

2011

£000

Audited

52 weeks ended

24 July

2011

£000

 

Paid in the period

 

 

 

 

 

 

2011 Interim dividend



5,211

2011 Final dividend

10,475

-







10,475

-

5,211





Dividends in respect of the period




Interim dividend

5,080

5,211


Final dividend



10,475


5,080

5,211

10,475





Dividends per share

4p

4p

8p

 

15.        Share capital

 


Number of

shares

000s

Share capital

£000

 

Opening balance at 25 July 2010

 

139,125

 

2,783

Allotments

23

-

Repurchase of shares

(290)

(6)

Closing balance at 23 January 2011

138,858

2,777

Allotments

45

1

Repurchase of shares

(7,295)

(146)

 

Closing balance at 24 July 2011

 

131,608

 

2,632

Allotments

14

-

 

Closing balance at 22 January 2012

 

131,622

 

2,632

 

All issued shares are fully paid.

 

16.        Related-party disclosure

 

There were no material changes to related parties' transactions described in the last annual financial statements. There have been no related-party transactions having a material effect on the Company's financial position or performance in the first half of the current financial year.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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