Interim Results
Wetherspoon (JD) PLC
06 March 2008
7 March, 2008
For immediate release
J D WETHERSPOON PLC
PRESS RELEASE
J D Wetherspoon plc announces interim results for the twenty-six weeks to 27
January 2008.
Highlights
Turnover up 0.4% to £440.2m
Operating profit down 4% to £44.4m
Operating Margin down 0.5% to 10.1%
Profit before tax down 13% to £28.5m
Earnings per share down 11% to 12.9p
Free cash flow per share 11.3p (2007: 17.0p)
Dividend per share 4.4p (2007: 4.0p)
Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc,
said:
'The half year to 27 January 2008 was a challenging period for the Company, and
for the pub trade generally, since it followed smoking bans in England, Wales
and Northern Ireland in the second half of the last financial year. As
anticipated, the introduction of the bans resulted in a strong growth in food
sales but a decline in bar sales, which put pressure on margins and profits.
In February, we continued to generate strong growth in food sales combined with
a decline in bar sales. We expect second half sales trends to be broadly similar
to those of the second quarter, to experience some cost pressures, and therefore
have a slightly more cautious outlook for the second half of this financial
year.
We continue to believe that the smoking bans are to the long term advantage of
the trade. Bar sales are likely to recover as customers adjust to the new
regime, although the exact timing of this is still uncertain. Significant
future cost pressures exist, for instance in respect of energy and raw material
costs, and we will seek to minimise these where possible. As a result of our
dedicated staff and our excellent pubs, I remain confident of our future
performance.'
Enquiries:
John Hutson Chief Executive Officer 01923 477777
Keith Down Finance Director 01923 477777
Eddie Gerson Company Spokesman 07956 392234
Photographs are available at: www.newscast.co.uk 7 March 2008
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 29
April 2008.
Chairman's Statement
The half year to 27 January 2008 was a challenging period for the Company, and
for the pub trade generally, since it followed smoking bans in England, Wales
and Northern Ireland in the second half of the last financial year. As
anticipated, the introduction of the bans resulted in a strong growth in food
sales but a decline in bar sales, which put pressure on margins and profits.
Total sales, including new pubs, increased marginally by 0.4% to £440.2 million
(2007: £438.4 million), although like for-like-sales declined by 2%. Operating
profit decreased by 4.1% to £44.4 million (2007: £46.3 million) and profit
before tax by 13.4% to £28.5 million (2007: £32.9 million). Earnings per share
decreased by 11% to 12.9p (2007: 14.5p).
The operating margin before interest and tax decreased to 10.1% (2007: 10.6%),
due primarily to higher costs including labour and depreciation. Net interest
was covered 2.8 times (2007: 3.5 times) by operating profit. Total capital
investment was £28.9 million in the period and the total for this financial year
is expected to be £55 million.
Free cash flow, after capital investment of £6.2 million in existing pubs, £0.7
million in respect of share purchases under the Company's Share Incentive Plan
and payments of tax and interest, declined to £16.0 million (2007: £25.6
million). This decline was due to lower pre-tax profits, timing differences in
working capital and increased interest payments. This resulted in free cash flow
per share of 11.3p (2007: 17.0p) before investment in new pubs, proceeds from
pub disposals, dividend payments and share buybacks.
Further progress
Food sales have continued to increase strongly, and now amount to an average of
£8,600 (incl. VAT) per pub per week (2007: £7,900). We estimate that about 60%
of our trade is from food and drinks associated with meals. Coffee and breakfast
sales, areas of strong focus in recent years, continue to improve. For example,
we are currently selling approximately 514,000 coffees and teas per week, an
increase of around 12% compared to last year.
We have recently reviewed our product range and have introduced a number of new
beers including Coors Light, a popular American draught lager, which has
demonstrated encouraging sales since its launch. In addition sales of real ale
continue to improve and our beer festival which took place in November 2007 sold
2.2m pints of ale, an increase of 24% on the same festival in 2006. Wine sales
also continue to increase and our Californian Coldwater Creek, exclusive to
Wetherspoon in the pub trade, is, we believe, the biggest pub brand, outselling
Blossom Hill, for example.
Dividends, return of capital
The Board has decided to declare an interim dividend per share of 4.4p (2007:
4.0p), an increase of 10%, payable on 30 May 2008, to shareholders on the
register at 2 May 2008. Dividend cover was 2.9 times (2007: 3.6 times)
During the period under review, we purchased 1.0 million of our own shares for
cancellation at a cost of £5.7 million.
Property
The first half saw the opening of 10 new pubs, bringing the number of pubs open
at the period end to 681. We anticipate opening a total of 23 pubs in this
financial year.
Taxation
We expect the tax rate for this financial year to be approximately 35.6%, up
from 33%, due to an increase in non-qualifying depreciation, legislative changes
in capital allowances and a reduced tax benefit from share employee benefits
(2007: 33.3%. comparable basis adjusted for change in deferred tax rate from 30%
to 28%).
Financing
As at 27 January 2008, the Company's total net borrowings were £462.5 million
(29 July 2007: £433.8 million) and total facilities were £522.2 million.
Longer-term interest rates declined in the period and the Company has entered
into £400 million of fixed-rate swap arrangements which expire in 2014 - 2016
and have an average interest cost of approximately 5.5%.; £150 million of these
replace an existing swap arrangement expiring in 2009. We intend to keep these
new arrangements in place for a considerable period of time, notwithstanding a
marked-to-market net loss taken to reserves during the period. As a result, the
majority of our debt is now fixed at competitive terms.
People
In the period under review, the company paid bonuses of £6.0 million to
employees, 94% of which was paid to people working in our pubs. In addition, we
purchased £0.6 million worth of Wetherspoon shares under the SIP Scheme; taking
into account previous purchases made, this results in a total pool of shares
held on behalf of employees worth £9.2 million.
Social Issues
There is rightly considerable concern about a minority of people who mis-behave
when drinking alcoholic products. The predominant response of the government
and authorities has been a crackdown on under 18 year olds drinking in pubs and
clubs. We think this is unlikely to solve the problem since most anti social
behaviour results from older age groups. Furthermore a large number of parents
themselves used pubs and clubs or drank at parties or other social occasions
when they were under 18 and now actively collaborate in enabling their 16 and 17
year old children to do so themselves. Very high levels of police and other
resources are concentrated on keeping 16 and 17 year olds out of pubs and clubs
but it does not address the underlying issues.
Our view is that the central problems concerning people who mis-behave when
drinking are cultural ones. This is demonstrated by examples of poor behaviour
by a number of celebrities during the recent televised Brit Awards and by
habitual drunken celebrations in the context of sporting events and other
occasions, which then receive huge press coverage. This sort of behaviour is not
a new phenomenon, and is frequently replicated by the general public during
birthday parties, stag and hen parties and so on. Although it is often perceived
that pubs benefit from these sorts of occasions, it is our experience that they
are often bad for the pub trade, since they are difficult for pub staff to deal
with and can be intimidating for the majority of customers.
The behaviour of customers at Wetherspoons pubs is generally extremely good. We
aim to attract a wide variety of age groups, which is itself a contributing
factor to good behaviour, and to make available food and coffee, for example,
during longer hours than any other major pub company.
The correct approach for the authorities, in our opinion, as in the case of the
generally successful campaigns over drink driving, is to concentrate on the
message that pubs and drinking are legitimate activities, but they bring an
obligation to behave responsibly. The current effort to prevent under 18 year
olds drinking is likely to fail, since it is difficult to enforce, especially
since almost all parents permit these age groups to drink.
Financial investors' activity in the UK pub market
There has been a fashion in the last few years for equity and venture
capitalists to acquire groups of pubs, usually involving very high levels of
debt and extensive sales and leasebacks of freehold property, with a view to
boosting short term profits ('ebitda') and then selling the pubs soon
thereafter. Efforts are focused on boosting short term profits by heavy
incentives for senior management combined with considerable capital expenditure
on the pubs. The boost to profits is typically not sustainable, producing
predictable results for future acquirers. In addition, excessive numbers of
pubs were recently built in some large town city centres, usually on a leasehold
basis. Many of these pubs are probably now unprofitable and will have to be
converted to other uses over time. The combination of equity and bank finance is
potentially keeping unviable pubs open and so creates instability in the general
UK pub market.
Board changes
On 30 October 2007, Jim Clarke, Finance Director and Company secretary resigned
from the company. We would like to thank Jim for his contribution in the last 10
years. Jim was succeeded by Keith Down, previously Commercial Finance Director
at Tesco, where he worked for 5 years, on 7 January 2008.
We are pleased to announce the appointments to the Board of Paul Harbottle,
Chief Operating Officer and Su Cacioppo, Personnel and Legal Director. Paul has
been with the business for 5 years, initially as Head of Distribution before his
appointment as COO in 2007. Su has been with the business for 17 years,
initially starting as a pub shift manager. She was appointed Personnel Director
in 1999, and assumed responsibility for Retail Services in 2005 and Legal in
2006. We are mindful of the overall composition of the Board.
Current trading and outlook
In view of the well documented impact of smoking bans on the pub trade
generally, we believe our performance in the first half has been resilient. In
February, we continued to generate strong growth in food sales combined with a
decline in bar sales. We expect second half sales trends to be broadly similar
to those of the second quarter, to experience some cost pressures, and therefore
have a slightly more cautious outlook for the second half of this financial
year.
We continue to believe that the smoking bans are to the long term advantage of
the trade. Bar sales are likely to recover as customers adjust to the new
regime, although the exact timing of this is still uncertain. Significant
future cost pressures exist, for instance in respect of energy and raw material
costs, and we will seek to minimise these where possible. As a result of our
dedicated staff and our excellent pubs, I remain confident of our future
performance.
Tim Martin
Chairman
6 March 2008
Income statement for the 26 weeks ended 27 January 2008
Notes Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Revenue 4 440,166 438,374 888,473
Operating costs (395,742) (392,103) (797,360)
Operating profit 5 44,424 46,271 91,113
Finance income 33 27 206
Finance costs (15,982) (13,425) (29,295)
Profit before tax 28,475 32,873 62,024
Tax expense 6 (10,135) (11,130) (15,190)
Profit for the period 18,340 21,743 46,834
Earnings per share (pence) 7
Earnings per ordinary share 12.9 14.5 31.8
Fully diluted earnings per share 12.9 14.4 31.6
All activities relate to continuing operations.
Statement of recognised income and expense for the 26 weeks ended 27 January
2008
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 January 2008 28 January 2007 29 July 2007
£000 £000 £000
Cash flow hedges: net (loss)/gain taken to equity (12,491) 3,657 5,833
Tax on items taken directly to equity 3,497 (1,096) (1,777)
Net (loss)/gain recognised directly in equity (8,994) 2,561 4,056
Profit for the period 18,340 21,743 46,834
Total recognised income for the period 9,346 24,304 50,890
Cash flow statement for the 26 weeks ended 27 January 2008
Notes Unaudited Unaudited Unaudited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
27 January 27 January 28 January 28 January 29 July 29 July
2008 2008 2007 2007 2007 2007
£000 £000 £000 £000 £000 £000
Cash flows from operating
activities
Cash generated from operations 8 55,617 55,617 60,273 60,273 124,933 124,933
Interest received 33 33 27 27 189 189
Interest paid (23,686) (23,686) (13,025) (13,025) (27,610) (27,610)
Corporation tax paid (8,974) (8,974) (10,103) (10,103) (19,598) (19,598)
Purchase of own shares
for share-based payments
(671) (671) (1,053) (1,053) (1,489) (1,489)
Net cash inflow from operating 22,319 22,319 36,119 36,119 76,425 76,425
activities
Cash flows from investing
activities
Purchase of property, plant and (6,229) (6,229) (10,548) (10,548) (24,046) (24,046)
equipment and intangible assets
for existing pubs
Proceeds of sale of property,
plant and equipment and assets
held for resale 646 3,773 4,768
Investment in new pubs and pub (28,681) (22,686) (51,951)
extensions
Net cash outflow from investing (34,264) (6,229) (29,461) (10,548) (71,229) (24,046)
activities
Cash flows from financing
activities
Equity dividends paid (11,240) (4,537) (10,295)
Proceeds from issue of ordinary 415 4,954 5,927
shares
Purchase of own shares (5,661) (37,288) (77,015)
Advances under bank loans 28,322 28,106 76,135
Finance lease principal payments (230) - (1,988)
Net cash inflow/(outflow) from
financing activities
11,606 (8,765) (7,236)
Net decrease in (339) (2,107) (2,040)
cash and cash equivalents
Opening cash and cash equivalents 19,052 21,092 21,092
Closing cash and cash equivalents 18,713 18,985 19,052
Free cash flow 16,090 25,571 52,379
Free cash flow per ordinary share 7 11.3p 17.0p 35.6p
Balance sheet as at 27 January 2008
Notes Unaudited Unaudited Audited
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Assets
Non-current assets
Property, plant and equipment 9 787,413 751,868 782,269
Intangible assets 10 3,862 2,831 3,566
Other non-current assets 11 6,974 6,967 6,685
Derivative financial instruments 10,312 - -
Deferred income tax assets 4,473 3,789 975
Total non-current assets 813,034 765,455 793,495
Current assets
Inventories 17,524 18,129 19,029
Other receivables 14,841 12,174 11,761
Assets held for sale 179 923 848
Cash and cash equivalents 12 18,713 18,985 19,052
Total current assets 51,257 50,211 50,690
Total assets 864,291 815,666 844,185
Liabilities
Current liabilities
Trade and other payables (93,478) (118,234) (119,183)
Financial liabilities (821) - (559)
Current income tax liabilities (10,620) (10,679) (9,679)
Total current liabilities (104,919) (128,913) (129,421)
Non-current liabilities
Financial liabilities (493,836) (392,720) (440,232)
Derivative financial instruments (13,809) (15,603) (16,335)
Deferred tax liabilities (79,619) (85,970) (79,400)
Provisions and other liabilities (6,017) (6,620) (6,190)
Total non-current liabilities (593,281) (500,913) (542,157)
Net assets 166,091 185,840 172,607
Shareholders' equity
Ordinary shares 14 2,831 2,951 2,849
Share premium account 141,835 140,455 141,422
Capital redemption reserve 1,589 1,461 1,569
Retained earnings 19,836 40,973 26,767
Total shareholders' equity 15 166,091 185,840 172,607
Notes
1. General information
The company is a public limited company, incorporated and domiciled in the UK.
The address of its registered office is: J D Wetherspoon plc, Central Park,
Reeds Crescent, Watford, WD24 4QL
The company is listed on the London Stock Exchange.
This condensed consolidation half-yearly financial information was approved for
issue on 6 March 2008.
These interim financial results do not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 29 July 2007 were approved by the Board of directors on 7 September
2007 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 Section 237 of the Companies Act 1985.
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. The half-yearly condensed consolidated
financial report should be read in conjunction with the annual financial
statements for the year ended 29 July 2007, which have been prepared in
accordance with IFRSs as adopted by the European Union.
The financial information for the year ended 29 July 2007 is extracted from the
statutory accounts of the Company for that year.
The interim accounts for the six months ended 27 January 2008 and the
comparatives to 28 January 2007 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
The accounting policies adopted are consistent with those of the annual
financial statements for the 52 week period ended 29 July 2007, as described in
those annual financial statements.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the period ending 27 July 2008:
• IFRIC 7: 'Applying the restatement approach under IAS 29', effective for
annual periods beginning on or after 1 March 2006. The interpretation is not
relevant for the Company.
• IFRIC 8: 'Scope of IFRS 2', effective for annual periods beginning on or
after 1 May 2006. This interpretation has not had any impact on recognition
of share-based payments in the Company.
• IFRIC 9: 'Reassessment of embedded derivatives', effective for annual
periods beginning on or after 1 June 2006. This interpretation has not had a
significant impact on the reassessment of embedded derivatives, as the
Company has already assessed whether embedded derivatives should be
separated, using principles consistent with IFRIC 9.
• IFRIC 10: 'Interims and impairment' effective for the annual periods
beginning on or after 1 November 2006. This interpretation has not had any
impact on the timing or recognition of impairment losses, as the Company has
already accounted for such amounts, using principles consistent with IFRIC
10.
• IFRIC 11: 'IFRS 2 - Group and treasury share transactions', effective for
annual periods beginning on or after 1 March 2007. Management does not
expect this interpretation to be relevant for the Company.
• IFRS 7: 'Financial instruments: Disclosures', effective for annual periods
beginning on or after 1 January 2007. IAS 1: 'Amendments to capital
disclosures', effective for annual periods beginning on or after 1 January
2007. IFRS 4: 'Insurance contracts', revised implementation guidance,
effective when an entity adopts IFRS 7. As this interim report contains only
condensed financial statements and there are no material financial
instrument-related transactions in the period, full IFRS 7 disclosures are
not required at this stage. The full IFRS 7 disclosures, including
sensitivity analysis to market risk and capital disclosures, required by the
amendment of IAS 1, will be given in the annual financial statements.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year ending 27 July 2008
and have not been adopted early:
• IFRIC 12: 'Service concession arrangements', effective for annual periods
beginning on or after 1 January 2008. Management does not expect this
interpretation to be relevant for the Company.
• IFRS 8: 'Operating segments', effective for annual periods beginning on or
after 1 January 2009. Management does not currently foresee any changes to
the Company's business segments.
• IFRIC 13, 'Customer loyalty programmes' effective for annual periods
beginning on or after 1 January 2008. Management does not expect this
interpretation to be relevant for the Company.
• IFRIC 14, 'IAS 19 - The limit on a defined benefit asset, minimum funding
requirements and their interaction' effective for annual periods beginning
on or after 1 January 2008. Management does not expect this interpretation
to be relevant for the Company.
• IAS 23 (Amendment) 'Borrowing costs' effective for annual periods
beginning on or after 1 January 2008. This may have an impact upon the
Company should borrowings be used to finance additions to property, plant
and equipment.
4. Revenue
Revenue disclosed in the income statement is analysed as follows: Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Sales of goods and services 440,166 438,374 888,473
The company trades in one business segment (that of operating managed public
houses) and one geographical segment (being the United Kingdom).
The business is subject to minor seasonal fluctuations dependant on public
holidays and the weather.
5. Operating profit
This is stated after charging/(crediting): Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Operating lease payments:
- land and building:
• minimum lease payments 21,443 21,187 41,796
• contingent rents 5,511 5,055 10,388
- equipment and vehicles 102 89 203
Repairs and maintenance 13,310 15,445 35,572
Rent receivable (199) (169) (327)
Depreciation of property, plant and equipment
- owned assets 21,838 21,127 41,997
- assets held under finance leases 459 - 557
Amortisation of intangible assets 590 543 1,044
Amortisation of non-current assets 107 250 348
Share-based payment charges 1,310 1,352 3,014
Loss/(profit) on disposal of properties 513 (829) (1,281)
Impairment of fixed assets - 618 876
6. Taxation
The taxation charge for the six months ended 27 January 2008 is calculated by
applying an estimate of the effective tax rate of 35.6% for the year ending 27
July 2008 (2007: 29.8%). The UK standard rate of corporation tax is 30% (2007:
30%), and the latest estimate of the current tax payable on profits for the
financial year ending 28 July 2008 is 35% (2007: 30%).
The increase in the estimated effective tax rate for this financial year to
35.6%, from 33.3% (adjusted for change in deferred tax rate from 30% to 28%) for
the year ended 29 July 2007, is due to an increase in non-qualifying
depreciation, legislative changes in capital allowances and a reduced tax
benefit from share employee benefits.
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Current tax 9,916 9,973 18,470
Deferred tax:
Origination and reversal of timing differences 219 1,157 2,192
Adjustment in respect of a change in tax rate - - (5,472)
Total deferred tax 219 1,157 (3,280)
Tax charge in the income statement 10,135 11,130 15,190
7. Earnings and free cash flow per share
Basic earnings per share has been calculated by dividing the profit attributable
to equity holders of £18,340,000 (January 2007: £21,743,000; July 2007:
£46,834,000) by the weighted average number of shares in issue during the year
of 141,804,184 (January 2007: 149,989,023; July 2007: 147,256,488).
Diluted earnings per share has been calculated on a similar basis, taking
account of 300,263 (January 2007: 915,222; July 2007: 910,449) dilutive
potential shares under option, giving a weighted average number of ordinary
shares adjusted for the effect of dilution of 142,104,447 (January 2007:
150,904,245; July 2007: 148,166,937).
Earnings per share
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Profit for the period (£000) 18,340 21,743 46,834
Basic earnings per share 12.9p 14.5p 31.8p
Diluted earnings per share 12.9p 14.4p 31.6p
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 existing 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 Incentive Plan ('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.
8. Cash generated from operations
Unaudited Unaudited Audited
26 weeks ended 26 weeks ended 52 weeks ended
27 January 2008 28 January 2007 29 July 2007
£000 £000 £000
Profit for the period 18,340 21,743 46,834
Adjusted for:
Tax 10,135 11,130 15,190
Amortisation of intangible assets 590 543 1,044
Depreciation of property, plant and equipment 22,297 21,127 42,554
Amortisation of non-current assets 107 250 348
Impairment of fixed assets - 618 876
Loss/(profit) on disposal of property, plant and equipment 513 (829) (1,281)
Share-based payment charges 1,310 1,352 3,014
Interest income (33) (27) (206)
Interest expense 15,828 13,283 28,821
Amortisation of bank loan issue costs 154 142 474
69,241 69,332 137,668
Change in inventories 1,505 (4,441) (5,341)
Change in receivables (3,112) (2,149) (1,717)
Change in payables (12,017) (2,469) (5,677)
Net cash inflow from operating activities 55,617 60,273 124,933
9. Property, plant and equipment
£000
Net book amount at 30 July 2007 782,269
Additions 27,954
Disposals (513)
Depreciation, impairment and other movements (22,297)
Net book amount at 27 January 2008 787,413
£000
Net book amount at 31 July 2006 743,826
Additions 31,655
Disposals (1,943)
Depreciation, impairment and other movements (21,670)
Net book amount at 28 January 2007 751,868
10. Intangible assets
£000
Net book amount at 30 July 2007 3,566
Additions 886
Amortisation, impairment and other movements (590)
Net book amount at 27 January 2008 3,862
£000
Net book amount at 31 July 2006 2,858
Additions 516
Amortisation, impairment and other movements (543)
Net book amount at 28 January 2007 2,831
Intangible assets all relate to computer software.
11. Other non-current assets
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Leasehold premiums 6,974 6,967 6,685
12. Analysis of changes in net debt
29 July 2007 Cash flows Non-cash 27 January 2008
movement
£000 £000 £000 £000
Cash in bank and in hand 19,052 (339) - 18,713
Debt due after one year (437,840) (28,322) (25,329) (491,491)
Derivative financial instrument - fair value hedge (15,017) - 25,329 10,312
Net borrowings (433,805) (28,661) - (462,466)
Derivative financial instrument - cash flow hedge (1,318) - (12,491) (13,809)
Net debt (435,123) (28,661) (12,491) (476,275)
13. Dividends paid and proposed
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
Paid in the period
Final dividend for 2006/07 - 8.0p (2005/06 - 3.1p) 11,255 4,537 4,537
Interim dividend for 2006/07 - 4.0p - - 5,758
Dividends paid 11,255 4,537 10,295
Dividends per share in respect of the period
Final dividend - - 8.0p
Interim dividend 4.4p 4.0p 4.0p
Dividends per share 4.4p 4.0p 12.0p
On 30 May 2008, the Company will pay an interim dividend of 4.4 pence per share
amounting to £6.3m, not accounted for as a liability in the balance sheet, for
the half year ended 27 January 2008 to shareholders on the register at the close
of business on 2 May 2008.
14. Share Capital
Number of Shares Share
000s Capital
£000
Opening balance at 30 July 2007 142,447 2,849
Allotments 134 2
Purchase of shares (1,010) (20)
Closing balance at 27 January 2008 141,571 2,831
Number of Share Capital
Shares £000
000s
Opening balance at 31 July 2006 153,776 3,076
Allotments 1,564 31
Purchase of shares (7,794) (156)
Closing balance at 28 January 2007 147,545 2,951
The total authorised number of 2p ordinary shares is 500 million (2007: 500
million). All issued shares are fully paid.
During the year, 1,010,000 shares were purchased by the Company for
cancellation, at a cost of £5.7 million, representing an average cost per share
of 564p.
15. Statement of changes in shareholders' equity
Unaudited Unaudited Audited
27 January 28 January 29 July
2008 2007 2007
£000 £000 £000
At beginning of period 172,607 201,575 201,575
Exercise of options 415 4,954 5,927
Repurchase of shares (5,661) (40,755) (77,015)
Share-based payment charges 1,310 1,352 3,014
Purchase of shares held in trust (671) (1,053) (1,489)
Profit for the period 18,340 21,743 46,834
Cash flow hedges: net (loss)/gain taken to equity (12,491) 3,657 5,833
Tax on items taken directly to equity 3,497 (1,096) (1,777)
Dividends (11,255) (4,537) (10,295)
Closing shareholders' equity 166,091 185,840 172,607
16. Related party disclosure
There have been 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 entity's financial position or
performance in the first half of the current financial year.
17. Capital commitments
The Company has capital commitments for which no provision has been made in
respect of property, plant and equipment of £4.4m (2007: £0.5m).
Statement of directors' responsibilities
The directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34, as adopted by the European Union, and that
the interim management report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The directors of J D Wetherspoon plc are listed in the J D Wetherspoon plc
annual report 29 July 2007, with the exception of the following changes in the
period: Mr J Clarke retired on 31 October 2007; Mr K Down was appointed on 7
January 2008. A list of current directors is maintained on the J D Wetherspoon
plc Web site: www.jdwetherspoon.co.uk
By order of the board
John Hutson
Chief Executive
6 March 2008
Keith Down
Finance Director
6 March 2008
Independent review report to J D Wetherspoon plc
Introduction
We been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the twenty-six weeks ended 27
January 2008, which comprises the income statement, balance sheet, statement of
recognised income and expense, cash flow statement and related notes. We have
read the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report, in accordance with the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs, as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report, based on our
review. This report, including the conclusion, has been prepared for, and only
for, the company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come, save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity', issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information comprises making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters which might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention which causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the twenty-six weeks ended 27 January 2008 is not prepared,
in all material respects, in accordance with International Accounting Standard
34, as adopted by the European Union, and the Disclosure and Transparency Rules
of the United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
6 March 2008
Notes:
(a) The maintenance and integrity of the J D Wetherspoon plc Web site is the
responsibility of the directors; the work carried out by the auditors does
not involve consideration of these matters; accordingly, the auditors accept
no responsibility for any changes which may have occurred to the financial
statements since they were initially presented on the Web site.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
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