Wetherspoons is to pay a dividend again for the first time in five years after the no-frills pubs group reported a 74 per cent rise in annual profits.
Spoons, as it is affectionately known by its regulars, posted a 5.7 per cent rise in revenue to £2.04 billion in the 12 months to the end of July, up from £1.93 billion in its previous financial year. The increase came despite it having closed a number of pubs, as well as Euro 2024 and the Olympics this summer, which Wetherspoon pubs generally do not show.
Adjusted pre-tax profits rose 74 per cent from £42.6 million to £73.9 million, comfortably the group’s best outturn since before the pandemic, when it would regularly surpass £100 million.
Statutory pre-tax profits fell by a third to £60.6 million from £90.5 million as a number of one-off charges, including costs of selling some pubs, cost it £13.3 million, whereas in 2023 Wetherspoon benefited from gains of £48.3 million from various one-offs.
The company said that, “as a result of [its] improved trading and financial position”, it would bring back the dividend, which it had not paid since 2019. Shareholders will receive 12p a share, equivalent to the 2019 payout, on November 28.
The chain’s employees have also benefited from the pick-up in profits after it handed out £49 million of bonuses and free shares over the past year, almost all of which went to staff below board level.
Fintan Ryan, a consumer analyst at Goodbody, said the return of the dividend “is a clear signal from management of the strength of the JD Wetherspoon operating model and balance sheet [and] should be taken well” by the stock market.
The shares, however, after initially opening higher, were down 2p, or 0.3 per cent, to 722½p in late-morning trading on Friday.
Tim Martin, founder of the chain, believes that it will one day consist of a thousand pubs
VICKI COUCHMAN FOR THE SUNDAY TIMES
Tim Martin founded the business in 1979 on the site of a former betting shop in Muswell Hill, north London. The pub was originally named Martin’s Free House before he renamed it JD Wetherspoon after one of his teachers.
The chain, which had 44 pubs at its flotation in 1992, is famous for the low prices of its ales and meals. As well as serving beers including Ruddles Best and Ringwood Old Thumper, it is one of the UK’s top sellers of coffee.
Drinks sales were the biggest driver of growth, with like-for-like bar sales increasing 8.9 per cent compared with the previous year. Food sales rose by 5.6 per cent and income from its hotel rooms increased by 2.7 per cent. Fruit machine sales, a comparatively small part of the business, were up almost 11 per cent.
Martin, 68, said sales continued to improve, even if the pace of growth was slowing, with like-for-like sales, which strip out the impact of opening and closing pubs, up 4.9 per cent across August and September.
In typically vague fashion, the company told the stock market that it “currently anticipates a reasonable outcome for the current financial year”, even if Martin “continues to be concerned about the possibility of further lockdowns”, as he has said before.
There are 800 JD Wetherspoons pubs around the country, from Penzance to Inverness, but that is down from a peak of 951 in 2015, partly owing to rising taxes, soaring staff costs, the pandemic and a cost of living crisis. Martin still insists that his “best estimate” is that the company has potential to reach a thousand in the UK one day.